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Exhibit 10.134
LETTER OF CREDIT AGREEMENT (CUMBERLAND)
This LETTER OF CREDIT AGREEMENT (CUMBERLAND) (this
"Agreement") is dated as of , 2000, by and between NATIONWIDE HEALTH
PROPERTIES, INC., a Maryland corporation ("Beneficiary"), and those entities
listed as LC Party on Schedule 1 hereto which is incorporated herein by this
reference (collectively, "LC Party").
R E C I T A L S
A. The Beneficiary, as landlord, and LC Party, as tenant, have
entered into that certain Master Lease and Security Agreement (Cumberland) dated
as of July 1, 2000 (the "Lease") whereby Beneficiary has leased to LC Party
certain property as more particularly described therein. All initially
capitalized terms used herein and not otherwise defined herein shall have the
same meanings given such terms in the Lease.
B. To secure LC Party's performance under the Lease, Balanced
Care Corporation, a Delaware corporation, and those entities listed as Guarantor
on Schedule 1 (collectively "Guarantor"), have executed that certain Guaranty of
Master Lease and Security Agreement (Cumberland) and Letter of Credit Agreement
(Cumberland) (the "Guaranty") of even date herewith guarantying the full
performance by LC Party under the Lease and this Agreement.
C. LC Party acknowledges and agrees that this Agreement is
given as an inducement to Beneficiary to enter into the Lease and that
Beneficiary would not enter into the Lease without the execution and delivery by
LC Party of this Agreement.
A G R E E M E N T
NOW, THEREFORE, for valuable consideration, the receipt and
sufficiency of which are acknowledged, the parties agree as follows:
1. Letter of Credit.
(a) Form of Letter of Credit. On or before the date
required under Section 11 of the Lease, LC Party, at LC Party's
expense, shall cause a bank or financial institution approved by
Beneficiary in its reasonable
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discretion subject to the criteria set forth in Section 3(a) (the
"Issuer") to issue an irrevocable letter of credit in the form of
Exhibit A attached hereto, with such modifications as the Issuer may
request that are acceptable to Beneficiary in its reasonable
discretion (the "Letter of Credit") naming Beneficiary, as
beneficiary. The Letter of Credit shall partially secure the
performance by LC Party as tenant under the Lease and the
performance by Guarantor under the Guaranty. As used herein,
"Letters of Credit" and "Letter of Credit" shall include the Letter
of Credit and all Supplemental Letters of Credit (as hereinafter
defined) and Replacement Letters of Credit (as hereinafter defined).
(b) Letter of Credit Amount. The aggregate amount of all
issued and outstanding Letters of Credit shall, at all times during
the term hereof as provided in Section 5, be Eight Hundred Three
Thousand Dollars ($803,000), as adjusted from time to time pursuant
to Section 11 of the Lease (as so adjusted, the "Letter of Credit
Amount"). Each Letter of Credit shall be for a term of not less than
twelve (12) months and a Letter of Credit shall be in effect for at
least thirty (30) days after the date upon which the Term expires.
(c) Replacement Letter of Credit. The term "Reissuance
Date" shall mean a date thirty (30) days prior to the expiration
date of the then issued and outstanding Letter of Credit. On or
before each Reissuance Date, LC Party, at LC Party's expense, shall
cause the Issuer to issue a replacement of the then issued and
outstanding Letter of Credit, which replacement shall be in the form
of Exhibit A hereto, with such modifications as the Issuer may
request that are acceptable to Beneficiary in its reasonable
discretion (the "Replacement Letter of Credit"). The Replacement
Letter of Credit shall be effective immediately as of the expiration
of the then issued and outstanding Letter of Credit.
(d) Supplemental Letter of Credit. If all or any portion
of any Letter of Credit is drawn against by Beneficiary as a result
of Beneficiary's proper exercise of its rights under the Lease, LC
Party shall, within two (2) business days after demand by
Beneficiary, order Issuer to issue to Beneficiary, at LC Party's
expense, a replacement or supplementary Letter of Credit in the form
of Exhibit A hereto, with such modifications as the Issuer may
request that are acceptable to Beneficiary in its reasonable
discretion (a "Supplemental Letter of Credit") such that
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at all times during the term of this Agreement, Beneficiary shall
have the ability to draw on one or more Letters of Credit totaling,
in the aggregate, the Letter of Credit Amount. If Issuer does not
issue to Beneficiary such Supplemental Letter of Credit within ten
(10) business days after Beneficiary's demand to LC Party, it shall
be a default by LC Party under this Agreement and an Event of
Default under the Lease.
(e) Replacement of Cash Security Deposit. Beneficiary
shall return to LC Party any cash security deposit held with respect
to the Lease immediately upon receipt of a photocopy of the initial
Letter of Credit required to be delivered under Section 11 of the
Lease, as signed by the Issuer, together with a signed letter
agreement from the Issuer stating that the original of such Letter
of Credit will be delivered to Beneficiary by overnight courier upon
receipt by LC Party of the cash security deposit.
2. Beneficiary's Right to Draw.
(a) General. Beneficiary shall be entitled to draw on
each Letter of Credit one or more times for the purpose of
compensating Beneficiary for any amounts due to Beneficiary under
the Lease by reason of an Event of Default occurring under the
Lease. Any amount drawn by Beneficiary shall not be deemed: (i) to
fix or determine the amounts to which Beneficiary is entitled to
recover under the Lease, the Guaranty or otherwise; (ii) to waive or
cure any default under the Lease or the Guaranty; or (iii) to limit
or waive Beneficiary's right to pursue any remedies provided for in
the Lease or the Guaranty.
(b) Replacement Letters of Credit. Upon the issuance and
delivery to Beneficiary of a Replacement Letter of Credit,
Beneficiary shall have the right to draw solely on such Replacement
Letter of Credit and Beneficiary shall have no right to draw against
the Letter of Credit which is replaced by such Replacement Letter of
Credit. If LC Party fails to cause the issuance of a Replacement
Letter of Credit by the Reissuance Date, then Beneficiary shall, in
addition to all other rights and remedies available at law or
equity, have the right to draw the full amount of the then issued
and outstanding Letters of Credit.
(c) Supplemental Letters of Credit. If LC Party fails to
cause the issuance of any Supplemental Letter of
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Credit as required pursuant to Section 1(d) hereof, then Beneficiary
shall, in addition to all other rights and remedies available at law
or equity, have the right to draw the full amount of the then issued
and outstanding Letters of Credit.
3. Replacement of Issuer.
(a) Supplemental and Replacement Letters of Credit. All
Letters of Credit, including Supplemental Letters of Credit and
Replacement Letters of Credit, shall be issued by a financial
institution acceptable to Beneficiary in the exercise of its
reasonable discretion, provided, however, Beneficiary shall have no
obligation to approve any financial institution which does not
either (i) have capital and surplus, as determined in accordance
with rules promulgated by the appropriate government agency
regulating such Issuer, in excess of One Billion Dollars
($1,000,000,000) or (ii) have a rating by Standard & Poors of A-1,
or by Xxxxx'x of P-1 (the standards set forth in the foregoing
clauses (i) and (ii) referred to individually as a "Credit Standard"
and collectively as the "Credit Standards"). Any such replacement
financial institution shall be deemed to be the "Issuer" hereunder.
(b) Creditworthiness of Issuer. In the event the Issuer
at any time does not meet at least one of the Credit Standards or if
Issuer shall admit in writing its inability to pay its debts
generally as they become due, shall file a petition in bankruptcy or
a petition to take advantage of any insolvency statute, shall
consent to the appointment of a receiver or conservator of itself or
the whole or any substantial part of its property, shall file a
petition or answer seeking reorganization or arrangement under the
Federal Bankruptcy Laws, shall have a receiver or conservator
appointed for it, or if, in Beneficiary's reasonable determination,
Issuer is not sufficiently creditworthy or shall become subject to
operational supervision by any federal or state regulatory
authority, then within thirty (30) days after a written demand by
Beneficiary, LC Party shall obtain a Replacement Letter of Credit
from another financial institution meeting the criteria set forth in
Section 3(a) hereof, whereupon such replacement financial
institution shall be deemed to be the "Issuer" under this Agreement.
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4. Successors and Assigns.
(a) The rights of Beneficiary under this Agreement and
any outstanding Letter of Credit shall be transferrable and
assignable to any assignee of, or successor in interest to,
Beneficiary's rights under the Lease (including any assignment for
security purposes of Beneficiary's rights under the Lease, this
Agreement or any Letter of Credit) and the term "Beneficiary" as
used herein shall refer to each entity comprising Landlord and to
each successor and assign of all or any portion of its interest
under the Lease. LC Party and Issuer shall accept and agree to
tender performance of their obligations hereunder and under any
Letter of Credit to any such successor or assign of which LC Party
and Issuer have been given written notice of by Beneficiary.
(b) LC Party shall not have the right to assign its
rights or duties under this Agreement without the prior written
consent of Beneficiary, which consent may be granted or withheld in
Beneficiary's sole discretion.
5. Termination of Obligation to Provide Letters of Credit.
The obligation of LC Party to cause the issuance of any
Letters of Credit shall terminate on the date which is thirty (30) days after
the date upon which the Lease Term expires, other than an expiration or
termination of the Lease Term pursuant to an Event of Default.
6. Attorneys' Fees.
If any party 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 attorneys' fees and costs as
awarded by the court in addition to all other recovery, damages and costs.
7. Miscellaneous.
All terms and provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. The headings in this Agreement are for the convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
This Agreement and all rights and duties of LC Party and Beneficiary, arising
from or relating in any way to the subject matter of this Agreement shall be
governed by, construed and enforced in accordance with the laws of the State of
California, without
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regard to the conflict of law rules of such State, except to the extent provided
expressly to the contrary in the Lease. This Agreement may be executed in
separate counterparts, each of which shall be considered as original when such
party has executed and delivered to the other one or more copies of this
Agreement. The Recitals set forth above are hereby incorporated by reference and
made a part hereof. LC Party represents and warrants that the Recitals are true
and correct in all material respects.
8. Notices.
All notices, requests and demands to be made hereunder to the
parties hereto shall be made in writing to the addresses set forth below and
shall be given by any of the following means: (a) personal service; (b)
electronic communication, whether by telex, telegram or telecopying; (c)
certified or registered mail, postage prepaid, return receipt requested; or (d)
nationally recognized courier or delivery service. Such addresses may be changed
by notice to the other parties given in the same manner as provided above. Any
notice, demand or request sent pursuant to either subsection (a), (b) or (d)
hereof shall be deemed received upon the actual delivery thereof, and, if sent
pursuant to subsection (c) shall be deemed received five (5) days following
deposit in the mail. Refusal to accept delivery of any notice, request or demand
shall be deemed to be delivery thereof. If LC Party is not an individual, notice
may be made on any officer, general partner or principal thereof. Notice to any
one co-LC Party shall be deemed notice to all co-LC Parties. In the event
Beneficiary notifies LC Party of the name and address of Beneficiary's lender,
LC Party shall cause a copy of all notices delivered to Beneficiary by LC Party
to be concurrently therewith delivered to such lender.
If to Beneficiary: c/o Nationwide Health Properties, Inc.
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxx, General Counsel
Facsimile No.: (000) 000-0000
with a copy to: O'Melveny & Xxxxx LLP
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
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If to LC Party: c/o Balanced Care Corporation
0000 Xxxxx Xxxxx
Xxxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxx Xxxxxx, General Counsel
Facsimile No.: (000) 000-0000
with a copy to: Xxxxxxxxxxx & Xxxxxxxx, LLP
Xxxxx X. Xxxxxx Building
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxx, Esq.
Facsimile No.: (000) 000-0000
9. Joint and Several Obligations. The liability and
obligations of each entity comprising LC Party hereunder shall be joint and
several.
[Signatures begin on next page.]
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EXECUTED as of the date first set forth above.
"LC PARTY"
C&G HEALTHCARE AT HAGERSTOWN,
L.L.C., a Delaware limited
liability company
By:/s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President and Secretary
C&G HEALTHCARE AT XXXXXXX CITY,
L.L.C., a Delaware limited
liability company
By:/s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President and Secretary
ELDER CARE OPERATORS OF BRISTOL,
LLC, a Delaware limited liability
company
By:/s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President and Secretary
ELDER CARE OPERATORS OF
MURFREESBORO, LLC, a Delaware
limited liability company
By:/s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President and Secretary
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C & G HEALTHCARE AT TEAY'S VALLEY,
L.L.C., a Delaware
limited liability company
By:/s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President and Secretary
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ACCEPTED AND AGREED TO: "GUARANTOR"
BALANCED CARE CORPORATION,
a Delaware corporation
By:/s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Senior Vice
President, Legal Counsel
and Assistant Secretary
BALANCED CARE AT HAGERSTOWN, INC.,
a Delaware corporation
By:/s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President and
Secretary
BALANCED CARE AT XXXXXXX CITY,
INC., a Delaware corporation
By:/s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President and
Secretary
BALANCED CARE AT BRISTOL, INC.,
a Delaware corporation
By:/s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President and
Secretary
BALANCED CARE AT MURFREESBORO,
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 TEAY'S VALLEY, INC.,
a Delaware corporation
By:/s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President and
Secretary
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SCHEDULE 1 TO LC AGREEMENT
LC Party and Guarantor Entities
LC Party:
1. C&G Healthcare at Hagerstown, L.L.C., a Delaware limited liability
company
2. Elder Care Operators of Bristol, LLC, a Delaware limited liability
company
3. C&G Healthcare at Xxxxxxx City, L.L.C., a Delaware limited liability
company
4. Elder Care Operators of Murfreesboro, LLC, a Delaware limited liability
company
5. C&G Healthcare at Teay's Valley, L.L.C., a Delaware limited liability
company
Guarantor:
1. Balanced Care Corporation, a Delaware corporation
2. Balanced Care at Hagerstown, Inc., a Delaware corporation
3. Balanced Care at Bristol, Inc., a Delaware corporation
4. Balanced Care at Xxxxxxx City, Inc., a Delaware corporation
5. Balanced Care at Murfreesboro, Inc., a Delaware corporation
6. Balanced Care at Teay's Valley, Inc., a Delaware corporation
Schedule 1-1
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EXHIBIT A TO LC AGREEMENT
[NAME] BANK
IRREVOCABLE LETTER OF CREDIT NO.
DATE:
EXPIRATION DATE:
c/o Nationwide Health Properties, Inc.
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx Xxxxx, XX 00000
Ladies and Gentlemen:
We hereby establish our Irrevocable Letter of Credit in your
favor for the account of ("Customer") available by your draft(s) on
us payable at sight in an amount not to exceed a total of Dollars ($ )
when accompanied by the following documents:
1. A certificate which on its face appears to have been
executed by an officer of Nationwide Health Properties, Inc., a Maryland
corporation ("Beneficiary"), stating the amount which Beneficiary is drawing and
that one or more of the following events has occurred: (i) an Event of Default
has occurred under the Master Lease and Security Agreement (Cumberland) dated as
of July 1, 2000 (the "Lease") between Beneficiary as landlord, and certain
Affiliates (as defined in the Lease) of BCC (as defined below), collectively as
tenant; (ii) a default under that certain Guaranty of Master Lease and Security
Agreement (Cumberland) and Letter of Credit Agreement (Cumberland) dated July 1,
2000, executed by Balanced Care Corporation, a Delaware corporation ("BCC") and
certain Affiliates thereof as identified therein, as guarantors for the benefit
of Beneficiary; or (iii) a default has occurred under that certain Letter of
Credit Agreement (Cumberland) dated July 1, 2000 by and between Customer and
Beneficiary.
2. The original Letter of Credit must accompany all drafts
unless a partial draw is presented, in which case the original must accompany
final draft.
EXHIBIT A-1
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This Letter of Credit will be duly honored by us at sight upon
delivery of the statement set forth above without inquiry as to the accuracy of
such statement and regardless of whether Customer disputes the content of such
statement.
This Letter of Credit may be transferred or assigned by
Beneficiary to any successor or assign of Beneficiary's interests under the
Lease or to any lender obtaining a lien or security interest in the property
covered by the Lease. Each draft hereunder by any assignee or successor shall be
accompanied by a copy of the fully executed documents or judicial orders
evidencing such encumbrance, assignment or transfer.
Any draft drawn hereunder shall be in the form attached hereto
as Schedule 1. Partial drawings are permitted with the amount of the Letter of
Credit being reduced, without amendment, by the amount(s) drawn hereunder.
This Letter of Credit shall expire at 2:00 p.m., on the
expiration date set forth above.
Except so far as otherwise expressly stated, this Letter of
Credit is subject to the "Uniform Customs and Practice for Documentary
Credits (1/1/94 Revision), International Chamber of Commerce
Publication No. 500." We hereby agree with you and all persons
negotiating such drafts that all drafts drawn and negotiated in
compliance with the terms of this Letter of Credit will be duly honored
upon presentment and delivery of the documents specified above by
certified or registered mail to , if negotiated on or before the
expiration date shown above.
Very truly yours,
Authorized Signature
EXHIBIT A-2
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SCHEDULE 1 TO LETTER OF CREDIT
SIGHT DRAFT
TO:
Attention:
PAY TO THE ORDER OF:
Nationwide Health Properties, Inc.,
a Maryland corporation,
c/o Wells Fargo Bank
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx
ABA No. 000000000
for the benefit of Nationwide Health Properties, Inc.
Account No. 4692089329
THE SUM OF:
Dollars ($ )
DRAWN ON:
Irrevocable Letter of Credit No.
dated , 20 issued by
Bank
NATIONWIDE HEALTH PROPERTIES, INC.,
a Maryland corporation
By:
Name:
Title:
SCHEDULE 1-1
