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Exhibit 10.13
FORM OF
FIRST AMENDED AND RESTATED
WORKING CAPITAL ASSURANCE AGREEMENT
[Project]
THIS FIRST AMENDED AND RESTATED WORKING CAPITAL ASSURANCE AGREEMENT
(this "Agreement") is made as of the 30th day of June, 1999, by and between
Balanced Care Corporation, a Delaware corporation with a principal place of
business at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("BCC"), and [ ], [ ] with
a principal place of business at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (the "Lessor").
W I T N E S S E T H:
WHEREAS, the Lessor and [ ], a Delaware limited liability company (the
"Lessee"), entered into that certain Lease and Security Agreement dated as of
the Documentation Date (the "Lease"), relating to certain premises located in
[ ] on property more fully described in the Lease (the "Property"); all
capitalized terms used herein and not otherwise defined herein shall have the
same meanings as ascribed to such terms in the Lease; and
WHEREAS, pursuant to a First Amended and Restated Shortfall Funding
Agreement of even date herewith (the "Shortfall Agreement") by and among the
Member (as defined in the Shortfall Agreement), the Lessee, and BCC, and a First
Amended and Restated Deposit Pledge Agreement of even date herewith (the
"Deposit Pledge") by and among the Lessor, the Member, the Lessee and BCC, the
Lessee will deposit funds into the Working Capital Reserve (as defined in the
Shortfall Agreement) as provided in the Shortfall Agreement to fund certain
operational losses anticipated in connection with the Project; and
WHEREAS, the Member has issued a Senior Note to the Senior Lender under
the Senior Credit Documents (all as defined in Appendix 1 to the Shortfall
Agreement), whereby the Member will receive the proceeds of a loan in the amount
of [ ] from Senior Lender to make equity contributions to the Lessee, so that
the Lessee can deposit such proceeds in the Collateral Account (as defined in
the Deposit Pledge) for the benefit of the Lessor, BCC and the Manager (as
hereinafter defined) pursuant to the terms of the Deposit Pledge and the
Shortfall Agreement; and
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WHEREAS, the Lessor and BCC Development and Management Co., a Delaware
corporation ("Developer"), have entered into a Development Agreement dated as of
the Documentation Date (the "Development Agreement") for the purpose of
developing a [ ]-unit personal care home/assisted living facility on the
Property (the "Facility"); and
WHEREAS, the Lessee and [ ], a Delaware corporation (the "Manager"),
have entered into a First Amended and Restated Management Agreement of even date
herewith (the "Management Agreement") for the operation and management of the
Facility; and
WHEREAS, the Developer and the Manager are wholly-owned subsidiaries of
BCC; and
WHEREAS, as additional security for all of the obligations of the
Lessee under the Lease, including without limitation all Minimum Rent and
Additional Rent, as defined in the Lease (the "Lease Obligations"), the Lessor
has requested the execution and delivery of this Agreement; and
WHEREAS, because of the significant interest of BCC in the success and
economic viability of the Facility, BCC entered into a Working Capital Assurance
Agreement dated as of the Documentation Date (the "Original Working Capital
Agreement"), whereby, among other matters, BCC agreed to provide to the Lessor
adequate assurances regarding the funding of Shortfalls (as hereinafter defined)
upon depletion of the Working Capital Reserve; and
WHEREAS, BCC and the Lessor now desire to enter into this Agreement to
amend and restate the Original Working Capital Agreement in its entirety as
herein provided.
NOW THEREFORE, for good and valuable consideration paid by each of the
parties hereto to the other, the receipt and sufficiency of which is hereby
acknowledged and in consideration of the covenants and agreements set forth
herein, the parties hereto intending to be legally bound hereby agree as
follows:
1. (a) Subject to the terms of Section 4 hereof, from the date hereof
until the complete payment and performance of the Lease Obligations, BCC
unconditionally agrees to loan to the Lessee, by means of working capital loans
(collectively, the "Working Capital Loans"), sufficient funds to pay and satisfy
the amount by which the Lessee's cash requirements to meet all of its
obligations (including, without limitation, operating expenses,
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debt service and the Lease Obligations) due and payable during any month exceed
the gross revenues received by the Lessee during such month (the "Shortfall").
Without limiting the generality of the definition of "Shortfall," Shortfalls
shall also include, without limitation (i) costs, expenses and damages related
to the Lessee's failure to pay Taxes (as defined in the Lease), to maintain
adequate insurance, to maintain any license necessary or desirable to operate
the Facility and indemnification and defense costs and expenses in connection
with litigation arising from or related to the Facility, (ii) all costs of
collection and enforcement incurred by the Lessor in exercising any remedies
provided in the Lease, and (iii) payment in full of all rent, additional rent
and other amounts due to the Lessor or third parties under the Lease in the
manner and at the time prescribed in the Lease.
(b) Working Capital Loans shall be made pursuant to the Shortfall
Agreement. BCC hereby agrees that the Lessor may make distributions of proceeds
of Working Capital Loans directly to the Lessor or third party creditors of the
Lessee.
2. (a) Subject to the terms of Section 4 hereof, whether or not there
has occurred or is continuing any default, breach of condition or failure to
satisfy any condition under the Shortfall Agreement, BCC shall, without further
direction, advance to the Lessee the amount equal to the Shortfall in a timely
fashion so that the Lessee is able to meet all of its working capital
obligations (including, without limitation, all Lease Obligations) when due.
Without limiting the generality of foregoing, BCC shall make Working Capital
Loans to the Lessee to fund Shortfalls even if the Lessee fails to make
contributions on a timely basis to the Working Capital Reserve as provided in
Section 1.01 of the Shortfall Agreement or otherwise.
(b) Without limiting BCC's obligation to fund Shortfalls as herein
provided, BCC shall promptly notify the Lessor should any proceedings under
Title 11 of the United States Code (each, a "Bankruptcy Proceeding," and the
laws applied during such Bankruptcy Proceedings being referred to herein as
"Bankruptcy Laws") be instituted by or against BCC, the Lessee or the Member,
and, upon request from the Lessor, shall immediately fund or otherwise cause to
be paid to all creditors (exclusive of the Lessor) of the party subject to the
Bankruptcy Proceeding all amounts due such creditors. Further, BCC shall use all
reasonable efforts (within the bounds of applicable law) to cause such
Bankruptcy Proceedings to be dismissed as soon as possible.
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3. BCC acknowledges that the covenants and agreements made hereunder by
BCC are being made to enable the Lessee, upon the complete disbursement of the
Working Capital Reserve, to fulfill its obligations, including, without
limitation, the Lease Obligations. Accordingly, it is expressly intended by BCC
that the covenants and agreements by BCC hereunder may be relied upon and
enforced by the Lessor. BCC acknowledges that (i) the Original Working Capital
Agreement was made by BCC to induce Lessor to enter into and accept the Lease
and (ii) this Agreement is being made by BCC to induce Lessor to accept the
change in ownership of the Member and of the Lessee and to enter into and accept
the Senior Credit Documents.
4. Notwithstanding anything to the contrary set forth herein, BCC's
obligation to provide the Working Capital Loans, and advance Shortfalls, to the
Lessee shall not commence until such time as (i) the Senior Lender has advanced
the full principal amount of the Senior Note to or for the benefit of the Lessee
into the Working Capital Reserve and (ii) the full amount actually deposited by
the Lessee in the Working Capital Reserve has been depleted. BCC shall make or
permit disbursements to the Lessor from the Working Capital Reserve to meet any
and all Lease Obligations when and as such Lease Obligations become due and
payable, pursuant to the terms and provisions of the Deposit Pledge.
5. The obligations of BCC hereunder shall not be affected by the
termination, discontinuance, release or modification of any agreement from any
endorser, surety or guarantor of the Lease Obligations. Notwithstanding anything
to the contrary contained herein or in the Lease, the Lessor hereby covenants
and agrees with BCC that the Lessor shall not amend, modify or otherwise alter
the Lease or any other document executed in connection therewith (collectively,
the "Lease Documents") without BCC's prior written consent, in each instance,
which consent, shall not be unreasonably withheld, conditioned or delayed.
In addition, the Lessor hereby covenants and agrees with BCC that,
except in connection with the exercise of any of its rights and/or remedies
under the Lease Documents, the Lessor shall not terminate the Lease without the
prior written consent of BCC, which consent shall not be unreasonably withheld,
conditioned or delayed.
6. The obligations of BCC hereunder shall not be affected by any change
in the beneficial ownership of the Lessee or by
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reason of any disability of the Lessee. This Agreement shall not be construed as
a guaranty or surety agreement, but shall constitute the separate and
independent primary obligation of BCC to the Lessor. This Agreement shall be in
addition to any guaranty or other security for the Lease Obligations, and it
shall not be prejudiced or rendered unenforceable by the invalidity of any such
guaranty or security. This Agreement shall continue to be effective or be
reinstated, as the case may be, if, at any time, any payment of the Lease
Obligations is rescinded or must otherwise be returned by the Lessor upon the
insolvency, bankruptcy or reorganization of the Lessee or otherwise, all as
though such payment had not been made.
7. (a) Without limiting BCC's obligation to provide the Working Capital
Loans, upon the occurrence of any default under any of the Lease Documents, BCC
shall have the right, but not the obligation, to cure such default within any
applicable notice and grace periods (or in the event of no grace period, within
3 days after receipt by BCC of notice of such default) and, to the extent
permitted by law, enter upon the Property, if necessary, for such purpose and
take all such actions as BCC may deem necessary or appropriate to remedy such
default. The Lessor agrees to give written notice to BCC of any notices of
default by the Lessee under the Lease or any other Lease Document which the
Lessor sends to the Lessee. The Lessor agrees to accept any remedy performed by
BCC as if the same had been performed by the Lessee.
(b) The Lessor acknowledges that BCC has the right to acquire all of
the Equity Interests (as defined in Appendix 1 to the Shortfall Agreement)
should the Lessee fail to timely make all required deposits into the Working
Capital Reserve pursuant to Section 1.01 of the Shortfall Agreement. In the
event that the Lessee fails to make such deposits into the Working Capital
Reserve and BCC exercises its rights under Section 1.01 of the Shortfall
Agreement by having BCC, an Affiliate of BCC or a designee of BCC purchase all
of the Equity Interests, the Lessor shall recognize as the Lessee under the
Lease and other Lease Documents such designee as BCC may designate so long as
such designee fully funds the Working Capital Reserve as provided in the
Shortfall Agreement and otherwise executes and delivers to the Lessor such
documents, instruments, affidavits and opinions as the Lessor may reasonably
request. In such event (but subject to Section 10 of this Agreement), this
Agreement and the obligations of the parties hereunder (including without
limitation BCC's obligation to fund Shortfalls) shall remain in full force and
effect.
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8. Any notice, request, demand, statement or consent made hereunder
shall be in writing and shall be deemed duly given if personally delivered, sent
by certified mail, return receipt requested, or sent by a nationally recognized
commercial overnight delivery service with provisions for a receipt, postage or
delivery charges prepaid, and shall be deemed given when postmarked or placed in
the possession of such mail or delivery service and addressed as follows:
If to BCC:
c/o BCC Development and Management Co.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
With copies to:
c/o BCC Development and Management Co.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
and
▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
If to the Lessor:
[ ]
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President and General Counsel
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
or at such other place as any of the parties hereto may from time to time
hereafter designate to the others in writing. Any notice given to BCC or the
Lessee by the Lessor at any time shall not imply that such notice or any further
or similar notice was or is required.
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9. This Agreement shall be construed, and the rights and obligations of
the Lessor and BCC shall be determined, in accordance with the laws of the State
in which the Facility is located, exclusive of such State's conflicts of laws
rules.
10. This Agreement and BCC's obligations hereunder shall automatically
terminate upon the purchase by BCC or a wholly-owned subsidiary of BCC (a "BCC
Affiliate") of all of the issued and outstanding equity of the Lessee or
substantially all of the assets of the Lessee (and the Lessor hereby consents to
such purchase of equity or assets); provided, however, if a BCC Affiliate
purchases all of the assets or the outstanding equity of the Lessee, BCC shall
provide to the Lessor an unconditional guaranty of all Lease Obligations, in
form and substance reasonably satisfactory to the Lessor. The Lessor shall have
the right, but not the obligation, to terminate this Agreement if (i) an Event
of Default under the Lease remains uncured beyond any applicable cure period or
(ii) BCC fails to perform any of BCC's obligations or duties under this
Agreement.
11. (a) The Lessor covenants and agrees with BCC that (subject to
Bankruptcy Laws) the Lessor shall not consent to any assignment of the Lessee's
interest under the Lease (except to BCC or a BCC Affiliate) or any transfer of
substantially all of the Lessee's assets or any transfer of the issued and
outstanding equity of the Lessee without the prior written consent of BCC, which
consent BCC may withhold in its sole and absolute discretion. In addition, in
the event that, in violation of the terms of this Agreement or the Lease, (a)
the Lessee or any Guarantor (as defined in the Lease) attempts to assign its
interest in the Lease (or transfer substantially all of its assets), (b) the
current holders of the issued and outstanding equity of the Lessee attempt to
transfer any such equity or (c) if any of the events described in Section 10.1.8
and Section 10.1.10 of the Lease occurs with respect to the Lessee or a
Guarantor, each of the Lessor and BCC covenant and agree that, subject to
applicable law, the Lessor shall terminate the Lease (in accordance with the
terms thereof) and the Lessor shall enter into a new lease of the Property with
BCC (or any of its wholly-owned subsidiaries, provided, that, BCC executes and
delivers a guaranty of any such lease, in form and substance acceptable to the
Lessor), in form and substance acceptable to the Lessor; provided, however, that
any such lease shall be substantially similar to the Lease. In connection with
the execution and delivery of any such lease, (y) BCC and its subsidiary shall
execute and deliver any additional documents that the Lessor may request, in
form and substance similar to the Lease Documents and
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(z) BCC shall deliver to the Lessor such evidence as the Lessor shall request,
in form and substance acceptable to the Lessor, that the new lease and all other
documents executed and delivered in connection therewith have been duly
authorized, executed and delivered and are enforceable. BCC agrees to pay all of
the costs and expenses reasonably incurred by the Lessor (including, without
limitation, attorneys' fees and expenses) in connection with the performance of
the Lessor's obligations under this Section 11.
(b) BCC agrees to indemnify, defend and hold the Lessor, its
Affiliates, and their respective trustees, officers, directors, shareholders and
other representatives (the "Indemnified Parties") harmless from and against any
and all claims, demands, actions, causes of action, damages, losses,
liabilities, fees (including without limitation attorneys fees), costs
(including without limitation court costs) and expenses (collectively "Claims")
in any way or manner whatsoever related or attributed to or arising out of
suits, litigation or threatened suits or litigation by the Lessee or the Member
in connection with (i) the rights, interests, obligations and duties of the
Lessor or BCC under this Agreement, the Shortfall Agreement, the Deposit Pledge
Agreement and any related leasehold mortgages, option agreements, equity pledge
agreements, financing statements or other security interests (the "Applicable
Documents") and/or (ii) any acts or failures to act, or the performance or
assertion of any rights, duties or obligations, by BCC or the Indemnified
Parties with respect to the Applicable Documents; provided, however, no
Indemnified Party shall be held harmless or entitled to indemnifications or
defenses to the extent that the Claim was caused in whole or in part by a breach
of any obligation, covenant or agreement of the Indemnified Party under Sections
5, 7 or 11 of this Agreement.
12. (a) Entire Agreement. This Agreement contains the entire
understanding among the parties hereto with respect to its subject matter and
supersedes any prior understandings or agreements between the parties with
respect to such subject matter. The parties agree that this Agreement amends and
restates the Original Working Capital Agreement in its entirety. However,
nothing contained herein shall be deemed to amend or modify in any way the terms
of the Original Working Capital Agreement applicable to the period of time prior
to the date hereof.
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(b) Amendments. This Agreement may be modified or
amended only by a written instrument executed by the Lessor, the Lessee and BCC.
(c) Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule of
law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the substance of
the transactions contemplated hereby is not affected in any manner adverse to
any party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that
transactions contemplated hereby are fulfilled to the extent possible.
(d) Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall constitute an original, but all of
which together shall constitute but a single instrument.
(e) Future Cooperation. Each party covenants and
agrees to take such further action and execute such further documents as may be
necessary or appropriate to carry out the intention of this Agreement.
(f) Successors and Assigns. This Agreement shall be
binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns.
(g) Representations and Warranties of BCC. BCC
represents and warrants that (i) this Agreement constitutes a legal, valid and
binding obligation of BCC, was duly authorized, executed and delivered by BCC,
and is fully enforceable against BCC in accordance with its terms (except as may
be limited by bankruptcy and creditor's rights laws and general principles of
equity), (ii) BCC is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, and is duly authorized and
qualified to do all things required of it under this Agreement; (iii) neither
this Agreement nor any agreement, document or instrument executed or to be
executed in connection herewith, violates the terms of any other agreement to
which BCC is a party and (iv) the recitals set forth above are hereby
incorporated by this reference and made a part of this Agreement, and BCC
represents and warrants that such recitals
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are true and correct. Any material breach by BCC of the representations and
warranties set forth herein shall be a default under this Agreement.
(h) Subordination. If for any reason whatsoever the
Lessee, any Affiliates of the Lessee, Developer or Manager now or hereafter
becomes indebted to BCC or any Affiliate of BCC, such indebtedness and all
interest therein shall at all times be subordinated in all respects to the
obligations of BCC under this Agreement, the obligations of the Lessee under the
Lease, the obligations of the Lessee and the Member to the Senior Lender under
the Senior Credit Documents and the obligations of Developer under the
Development Agreement. For purposes of this Agreement, the terms "Affiliate" and
"Affiliates" shall have the meanings set forth in that certain Second Series
Master Investment Agreement (the "Master Agreement") dated as of the
Documentation Date and amended by a First Amendment of even date herewith, by
and among the Lessor, Developer, the Member and BCC.
(i) Counsel Fees. If the Lessor or BCC brings any
action to interpret or enforce this Agreement, or for damages for any alleged
breach thereof, the prevailing party in any such action shall be entitled to
reasonable attorney's fees and costs as awarded by the court in addition to all
other recovery, damages and costs.
(j) Reliance by the Lessor. BCC acknowledges that (i)
BCC will benefit from the execution and continued existence of the Lease, (ii)
the Lessor will be relying upon BCC's assurances, representations, warranties,
and covenants contained herein and (iii) the Lessor may take, or delay in taking
or refuse to take any and all action with reference to the Lease (regardless of
whether the same might vary the risk or alter the rights, remedies or recourses
of BCC), including without limitation the settlement or compromise of any amount
allegedly due thereunder, the granting of indulgences or extensions, and/or the
release of or refusal to execute on any and all collateral; provided, however,
nothing contained in this Section shall limit or modify the obligations of the
Lessor under this Agreement, including without limitation Section 5 above.
(k) Waiver Provisions. BCC hereby knowingly,
voluntarily and unequivocally waives: (i) all notice of acceptance, protest,
demand and dishonor, presentment and demands of any kind now or hereafter
provided for by any statute or rule of law; (ii) any and all requirements that
the Lessor institute any action or proceeding, or exhaust any or all of the
Lessor's
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rights, remedies or recourses, against the Lessee or anyone else as a
condition precedent to bringing an action against BCC under this Agreement;
(iii) any defense arising by reason of any disability, insolvency, bankruptcy,
lack of authority or power, dissolution or any other defense of the Lessee, BCC,
any guarantor of the Lease, or their respective successors and assigns (even
though rendering same void, unenforceable or otherwise uncollectible); (iv) the
benefits of any and all express or implied waivers which may otherwise be
available to or claimed by BCC under the laws of the State in which the Property
is located; (v) any claim BCC might otherwise have against the Lessor by virtue
of the Lessor's invocation of any right, remedy or recourse permitted it
hereunder or under the Lease, any letter of credit agreement, any guaranty, or
otherwise available at law or equity; (vi) any failure, omission, delay or lack
on the part of the Lessor or the Lessee to enforce, assert or exercise any
right, power or remedy conferred on the Lessor or the Lessee in the Lease, or
any action on the part of the Lessor granting a waiver, indulgence or extension
to the Lessee or any other party; (vii) the voluntary or involuntary
liquidation, dissolution, sale or other disposition of all or substantially all
the assets of the Lessee or BCC, marshaling of assets or liabilities,
receiverships, insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment of, or other similar
proceeding affecting the Lessee, BCC, or their respective assets, or the
disaffirmance of the Lease in any such proceeding; (viii) any release or other
reduction of the Lease Obligations arising as a result of the expansion,
release, substitution or replacement (whether or not in accordance with terms of
the Lease) of the Premises or any portion thereof; and (ix) any defense or claim
available to BCC as a result of BCC's exercise of its right to purchase the
Premises (or any portion thereof) pursuant to the Master Agreement or that
certain Right of First Refusal Agreement dated as of the Documentation Date by
and between the Lessor and BCC; provided, however, nothing contained in this
Section shall limit or modify the obligations of the Lessor under this
Agreement, including without limitation Section 5 and Section 11(a) above.
(l) Application of Agreement. This Agreement shall
apply notwithstanding any extension or renewal of the Lease, or any holdover
following the expiration or termination of the Term or any renewal or extension
of the Term (as defined in the Lease).
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(m) Financial Reporting. Within forty-five (45) days
of the end of each of the first three quarters of the fiscal year of BCC, BCC
shall deliver the quarterly consolidated or combined, as applicable, financial
statement of BCC to the Lessor. Within one hundred (100) days of the fiscal year
end of BCC, BCC shall deliver to the Lessor the annual consolidated or combined,
as applicable, financial statement of BCC audited by a reputable certified
public accounting firm. If BCC is or becomes subject to any reporting
requirements of the Securities and Exchange Commission (the "SEC") during the
Term, BCC shall, in lieu of providing the financial statements described in the
first two sentences of this Subsection, concurrently deliver to the Lessor such
reports as are delivered to the SEC pursuant to applicable securities laws. All
of the reports and statements required hereby shall be prepared in accordance
with GAAP and BCC's accounting principles consistently applied and shall be
accompanied by a statement signed by the President, Chief Financial Officer,
Principal Accounting Officer, Controller, Executive Vice President, Development,
or other officer of BCC as approved by the Lessor in writing, certifying that
said reports are true, correct, and complete in all material respects after due
inquiry.
(n) Leasehold Mortgage. To secure the obligations of
the Lessee under the Shortfall Agreement, the Lessee has granted to BCC an Open
End Leasehold Mortgage and Security Agreement (the "Leasehold Mortgage")
encumbering the Lessee's interest in the Lease. BCC shall, concurrently with the
execution and delivery of this Agreement, execute and deliver to the Lessor an
escrow letter and satisfaction instrument in the form attached hereto as Exhibit
A removing the Leasehold Mortgage of record, which satisfaction instrument may
only be recorded as provided in such escrow letter. BCC shall provide notice to
the Lessor if BCC shall desire to institute any foreclosure proceedings by BCC
under the Leasehold Mortgage, and BCC shall not institute such proceedings
without the prior written consent of the Lessor, which consent shall not be
unreasonably withheld, conditioned or delayed; provided, however, BCC agrees
that the Lessor may condition consent to such foreclosure on the agreement by
BCC that all personal property leased to the Lessee under the Lease will remain
in the Facility and that such foreclosure will not materially or unreasonably
disrupt or interrupt the operation of the Facility.
(o) Management Agreement. BCC acknowledges that BCC
is the sole shareholder of the Manager. As sole shareholder of the Manager, BCC
agrees and shall cause the Manager to agree, that
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in the case of an Event of Default under the Lease (after applicable cure
periods): (i) the Lessor shall have the right to terminate the Management
Agreement and Manager's rights to manage the Facility, (ii) the Lessor shall
have the right to require the Manager to cooperate and assist in all reasonable
ways during any transition of management of the Facility after such termination,
(iii) during any such interim management, the Lessor shall have the right to
approve or veto all operation budgets and (iv) Manager shall otherwise take such
actions or refrain from taken such actions as the Lessor may reasonably request.
(p) Confidentiality. The Lessor hereby covenants and
agrees, on behalf of the Lessor and all Affiliates of the Lessor, that all
Confidential Information (as hereinafter defined) will be held and treated by
the Lessor, the Lessor's Affiliates and the agents and employees of the Lessor
and its Affiliates in confidence and will not, except as explicitly consented to
by BCC in its sole discretion, be disclosed by the Lessor, its Affiliates or the
agents and employees of the Lessor or its Affiliates, in any manner whatsoever,
in whole or in part, and will not be used by the Lessor, its Affiliates or the
agents and employees of the Lessor or its Affiliates other than in connection
with the Other Facilities (as defined in Appendix 1 to the Shortfall Agreement).
The Lessor further agrees on behalf of itself and its Affiliates (i) to disclose
Confidential Information only to (A) the Lessor's employees who need to know the
Confidential Information in connection with the Facility and (B) potential or
actual participants or assignees of the Lessor's interest in the Lease, the
other Lease Documents, any other documents related thereto and the Facility, but
only after receiving from such potential or actual participants or assignees an
agreement whereby the recipient of such Confidential Information agrees to be
bound by the provisions hereof relating to confidentiality and non-disclosure,
(ii) to employ all reasonable procedures to ensure that neither the Lessor, nor
its Affiliates, agents, employees or potential or actual participants or
assignees of the Lessor or its Affiliates use the Confidential Information in
connection with trading in the securities of BCC or communicate such information
to others who so trade in such securities and (iii) that any Confidential
Information not returned to BCC, the Management Firm or the Lessee, as
applicable, will be held by the Lessor and kept subject to the terms of this
Section or destroyed. As used in this Section, (i) "Confidential Information"
means all information and data containing or otherwise reflecting information
concerning BCC or any Affiliate of BCC, or any Other Facility, which is not
available to the general public but is material to the business,
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financial condition, or prospects of BCC and its Affiliates or otherwise would
be material to making an investment decision with respect to the publicly traded
securities of BCC, together with analyses, compilations, studies or other
documents, whether prepared by BCC, the Lessor or any other Entity (as defined
in Appendix 1 to the Shortfall Agreement), which contain or otherwise reflect
such information and (ii) "Affiliate" of any Entity (the "Subject") shall mean
(x) any Entity which, directly or indirectly, controls or is controlled by or is
under common control with the Subject, (b) any Entity or person owning,
beneficially, directly or indirectly, five percent or more of the outstanding
capital stock, shares or equity interests of the Subject or (c) any officer,
director, employee, general partner, member, manager or trustee of either the
Subject or any Entity controlling, controlled by or under common control with
the Subject (excluding trustees and persons serving in similar capacities who
are not otherwise an Affiliate of the Subject).
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EXECUTED as a sealed instrument as of the date first written above.
WITNESS: BCC:
BALANCED CARE CORPORATION,
a Delaware corporation
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
its Senior Vice President and
Legal Counsel
WITNESS: LESSOR:
[ ], [ ]
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ By: [ ]
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Name: [ ]
Title: [ ]
S - 1
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Joinder of the Lessee
Pursuant to Section 12(b) of the Original Working Capital Agreement, by
signing below, the Lessee agrees with and consents to the provisions of this
First Amended and Restated Working Capital Assurance Agreement.
LESSEE:
[ ]
By: ELDER CARE OPERATORS, LLC,
its Sole Member
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇,
its Sole Member and
President
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