EXHIBIT 10.45
JOINT AND SEVERAL PROMISSORY NOTE
$16,849,000 November 19, 2004
Boston, Massachusetts
FOR VALUE RECEIVED, FSQ/LTA HOLDINGS INC., a Delaware corporation and FIVE
STAR QUALITY CARE, INC., a Maryland corporation (each a "MAKER" and
collectively, "MAKERS"), by this promissory note (this "NOTE"), hereby jointly
and severally promise unconditionally to pay to SENIOR HOUSING PROPERTIES TRUST,
a Maryland real estate investment trust ("LENDER"), or order, on May 2, 2005
(the "MATURITY DATE"), unless sooner paid or payable as herein provided, the
principal sum of Sixteen Million, Eight Hundred Forty-Nine Thousand Dollars
($16,849,000), or so much thereof as shall be advanced and remain unpaid
hereunder, and to pay interest on the principal sum remaining unpaid hereunder
from time to time from the date hereof until the principal shall have been paid
in full.
1. BASE INTEREST; TERMS OF PAYMENT.
(a) The unpaid principal balance hereof shall bear interest
("BASE INTEREST") from the date of this Note until paid at the Base Interest
Rate (this and other capitalized terms used and not otherwise defined herein
having the meanings ascribed to such terms in SECTION 10). All such interest
shall be calculated on the basis of a 360-day year consisting of twelve (12)
equal 30-day months, with partial months calculated on the basis of the actual
number of days elapsed.
(b) Base Interest shall be due and payable on the Maturity Date
or if sooner, on the date of prepayment pursuant to SECTION 4 or on
acceleration.
2. LATE FEE. If any payment required to be made to Lender hereunder shall
not be paid within ten (10) days after the date the same becomes due, Makers
shall, at the election of ▇▇▇▇▇▇, pay to Lender, in addition to all other
amounts payable hereunder and not as a penalty but as the agreed cost to Lender
resulting from such delay, a "late fee" equal to five percent (5%) of such
overdue amount.
3. DEFAULT RATE. From and after the occurrence and during the continuance
of an Event of Default, all amounts due and unpaid hereunder shall, to the
extent permitted by law, bear interest until paid, at the Default Rate; such
interest shall be calculated on the basis of a 360-day year consisting of twelve
equal 30-day months, with partial months calculated on the basis of the actual
number of days elapsed.
4. PREPAYMENT. The unpaid principal of this Note, together with interest
accrued thereon, may be prepaid in whole or part, at any time or from time to
time, without payment of any prepayment fee, penalty or cost.
5. IMPOSTS. Makers shall pay principal, interest and other amounts under,
and in accordance with the terms of, this Note, free and clear of, and without
deduction for, any and all present and future taxes, levies, imposts,
deductions, charges, withholdings, and all liabilities with respect thereto,
excluding income and franchise taxes payable by Lender to the United States of
America or any political subdivision thereof. In addition, Makers shall pay any
federal, state or local taxes on the acquisition of this Note by Lender and any
stamp or other taxes levied by any jurisdiction on the execution, delivery,
registration, performance and enforcement of this Note.
6. PLACE AND MANNER OF PAYMENT. All payments of principal, interest and
other amounts payable on or in respect of this Note or the indebtedness
evidenced hereby shall be made to such account of Lender within the continental
United States of America as Lender shall from time to time designate by notice
to Makers not less than one (1) business day in advance, in lawful money of the
United States of America, in immediately available Federal funds.
7. COLLECTION OF COSTS. Should the indebtedness evidenced by this Note or
any part thereof be collected by action at law, or in bankruptcy, receivership
or other court proceedings, or should this Note be placed in the hands of
attorneys for collection after default, Makers agree to pay, upon demand by
▇▇▇▇▇▇, in addition to principal and interest and other sums, if any, due and
payable hereon, court costs and reasonable attorneys' fees and other reasonable
collection charges, unless prohibited by law.
8. EVENTS OF DEFAULT. If any of the following events (each, an "EVENT OF
DEFAULT") shall have occurred:
(a) Makers fail to pay any principal of or interest on this Note when and
as the same shall become due and payable, whether at the Maturity Date, upon
prepayment pursuant to SECTION 4, by acceleration or otherwise; or
(b) either Maker is generally not paying its debts as such debts become
due or admits in writing that it is not able to pay its debts as such debts
become due or otherwise becomes insolvent; or files, or consents by answer or
otherwise to the filing against it of, a petition for relief or reorganization
or arrangement or any other petition in bankruptcy, for liquidation or to take
advantage of any bankruptcy or insolvency law of any jurisdiction; or makes an
assignment for the benefit of its creditors; or consents to the appointment of a
custodian, receiver, trustee or other officer with similar powers with respect
to it or with respect to any substantial part of its property;
(c) there is a default under the Second Amended and Restated Lease
Agreement dated as of November 19, 2004 among the parties identified as landlord
therein and Five Star Quality Care Trust; or
(d) a petition for relief or reorganization or arrangement or any other
petition in bankruptcy, for liquidation, dissolution or winding up of either
Maker or for the appointment of a custodian, receiver, trustee or other officer
with similar powers with respect to it or with respect to any substantial part
of its property to take advantage of any bankruptcy or insolvency law of any
jurisdiction is filed against either Maker without its consent or other
acquiescence and such petition is not dismissed within 60 days;
then the entire unpaid principal of this Note, together with interest and other
amounts, if any, due hereon, shall in the case of clause (c) or (d) above, or
may at Lender's option in the case of clause (a) above, become immediately due
and payable (if not previously due and payable), without presentation, protest
or notice of any kind.
9. WAIVER BY MAKER. To the fullest extent permitted by applicable law,
Makers hereby absolutely and irrevocably waive presentment, demand, notice,
protest, and all other demands, notices and suretyship defenses generally, in
connection with the delivery, acceptance, performance, default or enforcement of
or under this Note.
10. DEFINITIONS. For all purposes of this Note, except as otherwise
expressly provided or unless the context otherwise requires, (a) the terms
defined in this section shall have the meanings assigned to them in this section
and include the plural as well as the singular, (b) all references in this Note
to designated "Sections" and other subdivisions are to the designated Sections
and other
2
subdivisions of this Note, and (d) the words "herein," "hereof," "hereunder" and
other words of similar import refer to this Note as a whole and not to any
particular Section or other subdivision.
(a) "BASE INTEREST RATE" shall mean nine percent (9%) per annum.
(b) "DEFAULT RATE" shall mean the lesser of eighteen percent (18%) per
annum and the maximum rate permitted under applicable law.
(d) "EVENT OF DEFAULT" shall have the meaning given such term in SECTION 8
of this Note.
(e) "MATURITY DATE" shall have the meaning given such term in the first
paragraph of this Note.
11. RIGHTS OF LENDER. The rights and remedies of Lender shall be
cumulative and concurrent, and may be pursued singly, successively, or together
in any order against Makers, all at the sole discretion of Lender. None of the
provisions hereof, and none of the rights or remedies of Lender hereunder on
account of any past or future defaults, shall be deemed to have been waived by
▇▇▇▇▇▇'s acceptance of any past due amount or by any indulgence granted by
▇▇▇▇▇▇.
12. NOTICES. All notices and other communications which by any provision
of this Note are required or permitted to be given shall be given in writing and
shall be sent by express mail, postage prepaid, by recognized courier service or
personally delivered to the receiving party. All such notices and communications
shall be mailed, sent or delivered as follows:
(a) If to either Maker:
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(b) If to Lender:
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
or to such other person(s) or address(es) as the party to receive any such
communication or notice may have designated by written notice to the other
party.
13. RELATIONSHIP. Notwithstanding any provision of this Note regarding the
determination and payment of amounts due and payable hereunder, it is expressly
understood and agreed by Makers and ▇▇▇▇▇▇ that the relationship between Makers
on the one hand and Lender on the other hand shall be solely that of debtor to
creditor and not that of joint venturers, partners, tenants in common or joint
tenants.
14. LIMITATION ON INTEREST. All agreements between Makers and Lender
contained herein are hereby expressly limited so that in no contingency or event
whatsoever, whether by reason of acceleration of maturity of this Note, or
otherwise, shall the amount paid or agreed to be paid to Lender for the use,
forbearance or detention of the principal of this Note exceed the maximum
permissible under applicable law, the benefit of which may be asserted by Makers
as a defense, and if, from any circumstance whatsoever, fulfillment of any
provision of this Note, at the time performance of such provision shall be due,
shall involve transcending the limit of validity prescribed by law, or if from
any circumstances Lender should ever receive as interest under this Note, such
an excessive amount, then, IPSO FACTO, the amount which would be excessive
interest shall be first prorated, spread and allocated, to the fullest extent
permitted by law, to such period and principal as will cause such amount to
conform to and comply with applicable law, and the balance, if any, shall be
applied to the reduction of the principal
3
of this Note and not to the payment of interest. This provision shall control
every other provision of this Note and all other agreements and instruments
between Makers and Lender relative hereto.
15. HOLDER. As used herein, the term "Lender" shall mean, in addition to
the initial payee hereof, each person from time to time who is an endorsee of
this Note or the bearer, if this Note is at the time payable to bearer.
16. GOVERNING LAW. Except as to matters regarding the internal affairs of
Lender and issues of or limitations on any personal liability of the
shareholders and trustees of Lender for obligations of Lender, as to which the
laws of the State of Maryland shall govern, this Note shall be interpreted,
construed, applied and enforced in accordance with the laws of The Commonwealth
of Massachusetts applicable to contracts between residents of Massachusetts
which are to be performed entirely within Massachusetts, regardless of (a) where
this Note is executed or delivered; or (b) where any payment or other
performance required by this Note is made or required to be made; or (c) where
any breach of any provision of this Note occurs, or any cause of action
otherwise accrues; or (d) where any action or other proceeding is instituted or
pending; or (e) the nationality, citizenship, domicile, principal place of
business, or jurisdiction of organization or domestication of any party; or (f)
whether the laws of the forum jurisdiction otherwise would apply the laws of a
jurisdiction other than The Commonwealth of Massachusetts; or (g) any
combination of the foregoing.
To the maximum extent permitted by applicable law, any action to enforce,
arising out of, or relating in any way to the provisions of this Note may be
brought and prosecuted in such court or courts located in The Commonwealth of
Massachusetts as is provided by law; and the parties consent to the jurisdiction
of said court or courts located in The Commonwealth of Massachusetts and to
service of process by registered mail, return receipt requested, or by any other
manner provided by law.
17. ARBITRATION. Lender or Maker(s) (each Maker, for purposes of this
Section 17, being referred to individually and collectively as "Maker") may
elect to submit any dispute hereunder that has an amount in controversy in
excess of $250,000 to arbitration. Any such arbitration shall be conducted in
Boston, Massachusetts in accordance with the Commercial Arbitration Rules of the
American Association then pertaining and the decision of the arbitrators with
respect to such dispute shall be binding, final and conclusive on the parties.
In the event Lender or Maker shall elect to submit any such dispute to
arbitration hereunder, ▇▇▇▇▇▇ and Maker shall each appoint and pay all fees of a
fit and impartial person as arbitrator with at least ten (10) years' recent
professional experience in the general subject matter of the dispute. Notice of
such appointment shall be sent in writing by each party to the other, and the
arbitrators so appointed, in the event of their failure to agree within thirty
(30) days after the appointment of the second arbitrator upon the matter so
submitted, shall appoint a third arbitrator. If either Lender or Maker shall
fail to appoint an arbitrator, as aforesaid, for a period of twenty (20) days
after written notice from the other party to make such appointment, then the
arbitrator appointed by the party having made such appointment shall appoint a
second arbitrator and the two (2) so appointed shall, in the event of their
failure to agree upon any decision within thirty (30) days thereafter, appoint a
third arbitrator. If such arbitrators fail to agree upon a third arbitrator
within forty five (45) days after the appointment of the second arbitrator, then
such third arbitrator shall be appointed by the American Arbitration Association
from its qualified panel of arbitrators, and shall be a person having at least
ten (10) years' recent professional experience as to the subject matter in
question. The fees of the third arbitrator and the expenses incident to the
proceedings shall be borne equally between Lender and Maker, unless the
arbitrators decide otherwise. The fees of respective counsel engaged by the
parties, and the fees of expert witnesses and other witnesses called for the
parties, shall be paid by the respective party engaging such counsel or calling
or engaging such witnesses.
4
The decision of the arbitrators shall be rendered within thirty (30) days
after appointment of the third arbitrator. Such decision shall be in writing and
in duplicate, one counterpart thereof to be delivered to Lender and one to
Maker. A judgment of a court of competent jurisdiction may be entered upon the
award of the arbitrators in accordance with the rules and statutes applicable
thereto then obtaining.
18. NON-LIABILITY OF TRUSTEES. THE DECLARATION OF TRUST ESTABLISHING
LENDER, A COPY OF WHICH, TOGETHER WITH ALL AMENDMENTS THERETO (THE
"DECLARATION"), IS DULY FILED WITH THE DEPARTMENT OF ASSESSMENTS AND TAXATION OF
THE STATE OF MARYLAND, PROVIDES THAT THE NAME "SENIOR HOUSING PROPERTIES TRUST "
REFERS TO THE TRUSTEES UNDER THE DECLARATION COLLECTIVELY AS TRUSTEES, BUT NOT
INDIVIDUALLY OR PERSONALLY, AND THAT NO TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE
OR AGENT OF LENDER SHALL BE HELD TO ANY PERSONAL LIABILITY, JOINTLY OR
SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, LENDER. ALL PERSONS DEALING
WITH ▇▇▇▇▇▇, IN ANY WAY, SHALL LOOK ONLY TO THE ASSETS OF LENDER FOR THE PAYMENT
OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.
SIGNATURES FOLLOW ON THE NEXT PAGE
5
WITNESS the execution hereof under seal as of the date above first written.
FSQ/LTA HOLDINGS INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
-----------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Treasurer and Chief Financial Officer
FIVE STAR QUALITY CARE, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
-----------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Treasurer and Chief Financial Officer
6
