Guaranty of Master Lease and Security Agreement (Cumberland) and Letter of Credit Agreement (Cumberland) - Balanced Card Corp. and Nationwide Health Properties Inc.
GUARANTY OF MASTER LEASE AND SECURITY AGREEMENT (CUMBERLAND)
AND LETTER OF CREDIT AGREEMENT (CUMBERLAND)
THIS GUARANTY OF MASTER LEASE AND SECURITY AGREEMENT (CUMBERLAND) AND
LETTER OF CREDIT AGREEMENT (CUMBERLAND) (this "Guaranty") is executed as of July
1, 2000 by BALANCED CARE CORPORATION, a Delaware corporation, and those entities
listed as Guarantors on Schedule 1 hereto, which by this reference is incorporated
herein (collectively, "Guarantor"), in favor of NATIONWIDE HEALTH PROPERTIES, INC.,
a Maryland corporation ("Landlord").
R E C I T A L S
A. Landlord and those entities listed as Tenants on Schedule 1 (collectively,
"Tenant"), have entered into that certain Master Lease and Security Agreement (Cumberland)
of even date herewith (the "Lease") whereby Landlord has agreed to lease to Tenant
the Premises, as more specifically set forth in the Lease. All capitalized terms
used herein and not otherwise defined herein shall have the meaning ascribed to
such terms in the Lease.
B. Landlord and Tenant have entered into, or shortly after the date hereof
will enter into, that certain Letter of Credit Agreement (Cumberland) (the "Letter
of Credit Agreement"), whereby Tenant shall post and maintain with Landlord a letter
of credit as partial security for Tenant's obligations under the Lease, as more
particularly set forth therein.
C. It is a condition to Landlord's obligations under the Lease that the
Guarantor execute and deliver to Landlord this Guaranty.
A G R E E M E N T S
NOW, THEREFORE, in consideration of Landlord entering into the Lease with
Tenant, and other good and valuable consideration the receipt and sufficiency of
which are hereby acknowledged, Guarantor agrees as follows:
1. Guaranty. 2
Guarantor hereby absolutely and unconditionally guarantees to Landlord
the following (collectively, the "Guaranteed Obligations"):
(a) payment in full by Tenant of all rent (including, without
limitation, Minimum Rent and Additional Rent) and other amounts due
under the Lease in the manner and at the time prescribed in the Lease;
(b) the full, complete and timely performance by Tenant of all
covenants, indemnities and other obligations under the Lease including,
without limitation, any indemnity or other obligations of Tenant which
survives the expiration or earlier termination of the Lease;
(c) the full, complete and timely performance by Tenant of all
covenants, agreements and other obligations under the Letter of Credit
Agreement;
(d) the accuracy and truthfulness in all material respects of
all of the representations and warranties made by Tenant under the
Lease and under the Letter of Credit Agreement; and
(e) all costs of collection or enforcement incurred by
Landlord in exercising any remedies provided for in the Lease or the
Letter of Credit Agreement at law or in equity with respect to the
matters set forth in clauses (a) through (d) inclusive, above,
including, without limitation, legal fees.
2. Performance by Guarantor.
If any Minimum Rent, Additional Rent or other amount due under the Lease
shall not be paid, or any obligation not performed as required by the Lease or the
Letter of Credit Agreement, then upon demand by Landlord, Guarantor shall pay within
ten (10) days of demand by Landlord such sums and perform such obligations as required
by the Lease or the Letter of Credit Agreement, as applicable, without regard to:
(a) any defense, set-off, or counterclaim which Guarantor or
Tenant (whether under the Lease or Letter of Credit Agreement) may have
or assert;
(b) whether or not Landlord shall have instituted any suit,
action or proceeding or exhausted its remedies or taken any steps to
enforce any rights against
2 3
Tenant (whether under the Lease or Letter of Credit Agreement) or any
other person to collect all or any part of such sums, either pursuant
to the provisions of the Lease, the Letter of Credit Agreement or at
law or in equity (it being understood that this is a guaranty of
payment and not collection, and Guarantor's liability for such payment
shall be primary); or
(c) any other condition or contingency.
Guarantor waives any right of exoneration and any right to require Landlord
to make an election of remedies. Guarantor covenants and agrees that it shall not
cause any default under the Lease or the Letter of Credit Agreement.
3. Guarantor's Representations and Warranties.
Guarantor hereby represents and warrants unto Landlord that:
(a) This Guaranty constitutes a legal, valid, and binding
obligation of Guarantor and is fully enforceable against Guarantor in
accordance with its terms;
(b) One hundred percent (100%) of the equity interests of
Tenant are owned beneficially and of record by Manager, and all of the
issued and outstanding capital stock of Manager is owned beneficially
and of record by BCC;
(c) Each entity comprising Guarantor 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 Guaranty; and
(d) This Guaranty is duly authorized, executed and delivered
by and binding upon each entity comprising Guarantor.
Any material breach by Guarantor of the representations and warranties
set forth herein shall be a default under this Guaranty.
4. Waiver.
Guarantor hereby knowingly, voluntarily and unequivocally waives:
3 4
(a) all notice of acceptance hereof, protest, demand and
dishonor, presentment and demands of any kind now or hereafter provided
for by any statute or rule of law;
(b) any and all requirements that Landlord institute any
action or proceeding, or exhaust any or all of Landlord's rights,
remedies or recourses, against Tenant (whether under the Lease or
Letter of Credit Agreement) or anyone else or any collateral as a
condition precedent to bringing an action against Guarantor under this
Guaranty, it being expressly agreed that the liability of Guarantor
hereunder shall be primary and not secondary;
(c) any defense arising by reason of any disability,
insolvency, bankruptcy, lack of authority or power, death, insanity,
minority, dissolution or any other defense of Tenant, its successors
and assigns, Guarantor or, if applicable, any other guarantor of the
Guaranteed Obligations (even though rendering same void, unenforceable
or otherwise uncollectible), it being agreed that Guarantor shall
remain liable hereon regardless of whether Tenant or any other such
person be found not liable thereon for any reason;
(d) the benefits of:
(1) all statutes of limitations as a defense to any
action or proceeding brought against Guarantor by Landlord, to
the fullest extent permitted by law;
(2) any defense based on any claim that Guarantor's
obligations exceed or are more burdensome than those of Tenant
(whether under the Lease or Letter of Credit Agreement);
(3) any defense based on or arising out of any
defense that Tenant may have (whether under the Lease or
Letter of Credit Agreement) to the payment or performance of
the Guaranteed Obligations or any part of them; and
(4) the benefits of any and all express or implied
waivers that may otherwise be available to or claimed by
Guarantor under the laws of the State of California or any
Situs State;
4 5
(e) any claim Guarantor might otherwise have against Landlord
by virtue of Landlord's invocation of any right, remedy or recourse
permitted it hereunder, under the Letter of Credit Agreement or under
the Lease or otherwise available at law or equity;
(f) any failure, omission, delay or lack on the part of
Landlord or Tenant (whether under the Lease or Letter of Credit
Agreement) to enforce, assert or exercise any right, power or remedy
conferred on Landlord or Tenant in the Lease, the Letter of Credit
Agreement or this Guaranty or any action on the part of Landlord
granting a waiver, indulgence or extension to Tenant or any Guarantor;
(g) the voluntary or involuntary liquidation, dissolution,
sale or other disposition of all or substantially all the assets of
Tenant or any Affiliate, marshalling of assets or liabilities,
receiverships, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of,
or other similar proceeding affecting Tenant or any Affiliate or any of
their respective assets, or the disaffirmance of all or any part of the
Lease or the Letter of Credit Agreement in any such proceeding;
(h) any release or other reduction of the Guaranteed
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;
(i) any release or other reduction of the Guaranteed
Obligations arising as a result of the release, substitution or
replacement (whether or not in accordance with the terms of the Letter
of Credit Agreement) of any letter of credit issued and outstanding
pursuant to the Letter of Credit Agreement.
This Guaranty 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.
5. Financial Statements and Legal Proceedings.
The financial statements heretofore given to Landlord by or on behalf
of Guarantor (pursuant to this Guaranty, the Lease or otherwise):
5 6
(a) have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods
covered thereby;
(b) are true and correct in all material respects;
(c) present fairly the results of operations of the parties
described therein for the respective periods covered thereby; and
(d) reflect accurately, in all material respects, the books
and records of account of the parties described therein as of such
dates and for such periods.
Subject to the foregoing, Guarantor hereby warrants and represents unto
Landlord that any and all balance sheets and other financial statements and data
which have heretofore been given to Landlord with respect to Guarantor fairly and
accurately present the financial condition of Guarantor.
6. Subsequent Acts.
Without notice to, consideration to, or the consent of, Guarantor:
(a) the Lease, and Tenant's rights thereunder, may be
modified, amended, renewed, assigned or sublet;
(b) the Letter of Credit Agreement, and Tenant's rights and
obligations thereunder, may be modified, amended, renewed or assigned;
(c) any additional parties who are or may become liable for
the Guaranteed Obligations may hereafter be released from their
liability hereunder and thereon; and/or
(d) Landlord may take, or delay in taking or refuse to take,
any and all action with reference to the Lease or the Letter of Credit
Agreement (regardless of whether same might vary the risk or alter the
rights, remedies or recourses of any Guarantor), including specifically
the settlement or compromise of any amount allegedly due thereunder.
No such acts shall in any way release, diminish, or affect the absolute
nature of Guarantor's obligations and liabilities hereunder. Guarantor's obligations
and liabilities
6 7 under this Agreement are primary,
absolute and unconditional under any and all circumstances and until the Guaranteed
Obligations are fully and finally satisfied, such obligations and liabilities shall
not be discharged or released, in whole or in part, by any act or occurrence which
might, but for this Section 6, be deemed a legal or equitable discharge or release
of a Guarantor.
7. Successors and Assigns.
This Guaranty may be enforced as to any one or more breaches either separately
or cumulatively, shall inure to the benefit of Landlord (and its successors and
assigns) and shall be binding upon Guarantor (and its successors and assigns). All
references herein to "Landlord" shall mean the above-named Landlord and any subsequent
owner of Landlord's interest in the Lease or assignee of Landlord's rights under
the Letter of Credit Agreement. No transfer by any Guarantor of its obligations
hereunder shall operate to release any Guarantor from such obligations.
8. Remedies Cumulative.
All rights, remedies and recourses afforded to Landlord by reason of this
Guaranty, or otherwise, are separate and cumulative and may be pursued separately,
successively or concurrently, as occasion therefor shall arise and are non-exclusive
and shall in no way limit or prejudice any other legal or equitable right, remedy
or recourse which Landlord may have.
9. Subordination; Limitation on Rights of Subrogation.
If for any reason whatsoever Tenant now or hereafter becomes indebted
to Guarantor or any Affiliate of Guarantor (including, without limitation, under
the Management Agreement), such indebtedness and all interest thereon shall at all
times be subordinate in all respects to the Guaranteed Obligations. Until the Guaranteed
Obligations shall have been paid in full, each Guarantor shall withhold exercise
of (a) any claim, right or remedy, direct or indirect, that such Guarantor now has
or may hereafter have against Tenant or any of its assets in connection with this
Guaranty or the performance by such Guarantor of its obligations hereunder, in each
case whether such claim, right or remedy arises in equity, under contract, by statute,
under common law or otherwise and including without limitation any right of subrogation,
reimbursement or indemnification that such Guarantor now has or may hereafter
7 8 have against Tenant, and (b) any
right of contribution such Guarantor may have against any other guarantor (including
any other Guarantor) of any of the Guaranteed Obligations (including without limitation
any such right of contribution under Section 15(b)). Each Guarantor further agrees
that, to the extent the agreement to withhold the exercise of its rights of subrogation,
reimbursement, indemnification and contribution as set forth in this Section 9 is
found by a court of competent jurisdiction to be void or voidable for any reason,
any rights of subrogation, reimbursement or indemnification such Guarantor may have
against Tenant, and any rights of contribution such Guarantor may have against any
such other guarantor, shall be junior and subordinate to any rights Landlord may
have against Tenant and to any right Landlord may have against such other guarantor.
If any amount shall be paid to any Guarantor on account of any such subrogation,
reimbursement or indemnification rights at any time when all Guaranteed Obligations
shall not have been paid in full, such amount shall be held in trust for Landlord
and shall forthwith be paid over to Landlord to be credited and applied against
the Guaranteed Obligations.
10. Governing Law.
This Guaranty and all rights and duties of Guarantor and Landlord arising
from this Guaranty shall be governed by, construed and enforced in accordance with
the laws of the State of California, without regard to the conflict of law rules
of such State, except to the extent as may be provided expressly to the contrary
in the Lease.
11. Severability.
If any provision of this Guaranty or the application thereof to any person
or circumstance shall, for any reason and to any extent, be invalid or unenforceable,
neither the remainder of this Guaranty nor the application of such provision to
any other persons or circumstances shall be affected thereby, but rather the same
shall be enforced to the greatest extent permitted by law.
12. Attorneys' Fees.
If Landlord or Guarantor brings any action to interpret or enforce this
Guaranty, 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.
8 9
13. Confirmation.
At any time, and at the request of Landlord, Guarantor shall execute and
deliver to Landlord a certificate ratifying and confirming all of Guarantor's obligations
and liabilities under this Guaranty.
14. Benefit to Guarantor.
Guarantor acknowledges that it will derive substantial benefit and value
from the execution and continued existence of the Lease, and Guarantor further acknowledges
that Landlord will be relying upon Guarantor's guarantee, representations, warranties
and covenants contained herein.
15. Limitation on Amount Guaranteed; Contribution by Guarantors.
(a) Anything contained in this Guaranty to the contrary notwithstanding,
if any Fraudulent Transfer Law (as hereinafter defined) is determined by a court
of competent jurisdiction to be applicable to the obligations of any Guarantor under
this Guaranty, such obligations of such Guarantor hereunder shall be limited to
a maximum aggregate amount equal to the largest amount that would not render its
obligations hereunder subject to avoidance as a fraudulent transfer or conveyance
under Section 548 of Title 11 of the United States Code or any applicable provisions
of comparable state law (collectively, the "Fraudulent Transfer Laws"), in each
case after giving effect to all other liabilities of such Guarantor, contingent
or otherwise, that are relevant under the Fraudulent Transfer Laws (specifically
excluding, however, any liabilities of such Guarantor (x) in respect of intercompany
indebtedness to Tenant or any Affiliates to the extent that such indebtedness would
be discharged in an amount equal to the amount paid by such Guarantor hereunder
and (y) under any guaranty of other indebtedness or obligations which guaranty contains
a limitation as to maximum amount similar to that set forth in this Section 15(a),
pursuant to which the liability of such Guarantor hereunder is included in the liabilities
taken into account in determining such maximum amount) and after giving effect as
assets to the value (as determined under the applicable provisions of the Fraudulent
Transfer Laws) of any rights to subrogation, reimbursement, indemnification or contribution
of such Guarantor pursuant to applicable law or pursuant to the terms of any agreement
(including any such right of contribution under Section 15(b)).
9 10
(b) Guarantors under this Guaranty together desire to allocate among themselves
(collectively, the "Contributing Guarantors"), in a fair and equitable manner, their
obligations arising under this Guaranty. Accordingly, in the event any payment or
distribution is made on any date by any Guarantor under this Guaranty (a "Funding
Guarantor") that exceeds its Fair Share (as defined below) as of such date, that
Funding Guarantor shall be entitled to a contribution from each of the other Contributing
Guarantors in the amount of such other Contributing Guarantor's Fair Share Shortfall
(as defined below) as of such date, with the result that all such contributions
will cause each Contributing Guarantor's Aggregate Payments (as defined below) to
equal its Fair Share as of such date. "Fair Share" means, with respect to a Contributing
Guarantor as of any date of determination, an amount equal to (i) the ratio of (x)
the Adjusted Maximum Amount (as defined below) with respect to such Contributing
Guarantor to (y) the aggregate of the Adjusted Maximum Amounts with respect to all
Contributing Guarantors multiplied by (ii) the aggregate amount paid or distributed
on or before such date by all Funding Guarantors under this Guaranty in respect
of the obligations guaranteed. "Fair Share Shortfall" means, with respect to a Contributing
Guarantor as of any date of determination, the excess, if any, of the Fair Share
of such Contributing Guarantor over the Aggregate Payments of such Contributing
Guarantor. "Adjusted Maximum Amount" means, with respect to a Contributing Guarantor
as of any date of determination, the maximum aggregate amount of the obligations
of such Contributing Guarantor under this Guaranty determined as of such date, in
the case of any Guarantor, in accordance with Section 15(a); provided that, solely
for purposes of calculating the Adjusted Maximum Amount with respect to any Contributing
Guarantor for purposes of this Section 15(b), any assets or liabilities of such
Contributing Guarantor arising by virtue of any rights to subrogation, reimbursement
or indemnification or any rights to or obligations of contribution hereunder shall
not be considered as assets or liabilities of such Contributing Guarantor. "Aggregate
Payments" means, with respect to a Contributing Guarantor as of any date of determination,
an amount equal to (i) the aggregate amount of all payments and distributions made
on or before such date by such Contributing Guarantor in respect of this Guaranty
(including in respect of this Section 15(b)) minus (ii) the aggregate amount of
all payments received on or before such date by such Contributing Guarantor from
the other Contributing Guarantors as contributions under this Section 15(b). The
amounts payable as contributions hereunder shall be determined as of the date on
which the related payment or distribution is made by the
10 11 applicable Funding Guarantor. The
allocation among Contributing Guarantors of their obligations as set forth in this
Section 15(b) shall not be construed in any way to limit the liability of any Contributing
Guarantor hereunder.
16. Counterparts.
This Guaranty may be executed in multiple counterparts, each of which
shall be an original, but all of which shall constitute but one instrument. The
signature page of any counterpart may be detached therefrom and reattached to any
other counterpart to physically form a single document.
17. 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 Guarantor is not an individual,
notice may be made on any officer, general partner or principal thereof. Notice
to any one co-Guarantor shall be deemed notice to all co-Guarantors. In the event
Landlord notifies Guarantor of the name and address of Landlord's lender, Guarantor
shall cause a copy of all notices delivered to Landlord by Guarantor to be concurrently
therewith delivered to such lender.
If to Guarantor: c/o Balanced Care Corporation
1215 Manor Drive
Mechanicsburg, Pennsylvania 17055
Attention: Robin Barber, General Counsel
Facsimile No.: (717) 796-6294
with a copy to: Kirkpatrick & Lockhart, LLP
Henry W. Oliver Building
535 Smithfield Street
11 12
Pittsburgh, Pennsylvania 15222
Attention: Steven Adelkoff
Facsimile: (412) 355-6501
If to Landlord: Nationwide Health Properties, Inc.
610 Newport Center Drive, Suite 1150
Newport Beach, California 92660
Attention: Gary E. Stark, General Counsel
Facsimile No.: (949) 759-6876
with a copy to: O'Melveny & Myers LLP
610 Newport Center Drive, Suite 1700
Newport Beach, California 92660
Attention: Steven L. Edwards
Facsimile No.: (949) 823-6994
18. Incorporation of Recitals. The Recitals set forth above are hereby
incorporated by this reference and made a part of this Guaranty. Guarantor hereby
represents and warrants that the Recitals are true and correct.
19. Preservation of Gross Revenues.
(a) Guarantor acknowledges that a fair return to Landlord on
its investment in the Premises is dependent, in part, on the
concentration on the Premises during the Term of the ALF business of
Tenant and its Affiliates in the geographical areas in which the
Facilities located. Guarantor further acknowledges that the diversion
of patient care activities from the Facilities to other facilities
owned or operated by Guarantor or Tenant or their respective Affiliates
at or near the end of the Term will have a material adverse impact on
the value and utility of the Premises. Therefore, Guarantor agrees that
during the Term, and for a period of one (1) year thereafter, neither
Tenant nor Guarantor nor any Affiliate of Tenant or Guarantor shall,
without the prior written consent of Landlord, operate, own,
participate in or otherwise receive revenues from any other facility or
institution providing services or similar goods to those provided on or
in connection with the Premises and the permitted use thereof as
contemplated under the Lease, within a five (5) mile radius of each of
the Facilities; provided, however, that the provisions of this Section
19(a) shall not apply to the operation or ownership of any licensed
skilled nursing facility or licensed acute care hospital facility.
12 13
(b) In addition, Guarantor hereby covenants and agrees that
for a period of one (1) year following the expiration or earlier
termination of the Lease, neither Tenant nor Guarantor nor any
Affiliate of Tenant or Guarantor shall, without prior written consent
of Landlord, hire, engage or otherwise employ any management or
supervisory personnel working on or in connection with any of the
Facilities and not also working at any other facility owned or operated
by Tenant or Guarantor or any Affiliate of Tenant or Guarantor.
(c) Except as required for medically appropriate reasons,
prior to and for a period of one (1) year after Lease termination,
neither Tenant nor Guarantor will recommend or solicit the removal or
transfer of any patient from any Facility to any other nursing or
healthcare facility, or to any senior housing or retirement housing
facility; provided, however, that the provisions of this Section 19(c)
shall not apply to the operation or ownership of any licensed skilled
nursing facility or licensed acute care hospital facility.
(d) The terms of this Section 19 shall survive the termination
or expiration of the Lease.
(e) Guarantor hereby specifically acknowledges and agrees that
the temporal, geographical and other restrictions contained in this
Section 19 are reasonable and necessary to protect the business and
prospects of Landlord, and that the enforcement of the provisions of
this Section 19 will not work an undue hardship on Guarantor or Tenant.
Guarantor further agrees that in the event either the length of time,
geographical or any other restrictions, or portion thereof, set forth
in this Section 19 is overly restrictive and unenforceable in any court
proceeding, the court may reduce or modify such restrictions, but only
to the extent necessary, to those which it deems reasonable and
enforceable under the circumstances, and the parties agree that the
restrictions of this Section 19 will remain in full force and effect as
reduced or modified. Guarantor further agrees and acknowledges that
Landlord does not have an adequate remedy at law for the breach or
threatened breach by Guarantor or Tenant of the covenants contained in
this Section 19, and Guarantor therefore specifically agrees that
Landlord may, in addition to other remedies which may be available to
Landlord hereunder, file a suit in equity to enjoin Guarantor or Tenant
from such breach or threatened breach,
13 14
without the necessity of posting any bond. Guarantor further agrees, in
the event that any provisions of this Section 19 is held to be invalid
or against public policy, the remaining provisions of this Section 19
and the remainder of this Guaranty and the Lease shall not be affected
thereby.
20. License. Guarantor acknowledges and agrees that:
(a) the ALF licenses and all other licenses and certifications
on or affecting the Facilities must be in the name of Tenant or
Guarantor, one of their respective Affiliates, or another operator (the
"Operator") approved in writing by Landlord whose consent may not be
unreasonably withheld;
(b) neither Tenant, or Guarantor nor any other Operator may
sell, transfer, assign, encumber, sublet, permit to lapse, expire,
become suspended, or terminate any such licenses or certifications,
operating rights associated with the Facilities and certification
without the prior written consent of Landlord which may be not
unreasonably withheld, except for transfers between Tenant, or
Guarantor or their respective Affiliates (of which Landlord must
receive written notice prior to such transfer);
(c) all such licenses are an integral part of each Facility
and must remain at the applicable Facility unless approved in writing
by Landlord, which approval may be unreasonably withheld (and agrees to
so direct any other Operator);
(d) Tenant, Guarantor, or such Operator must provide
photocopies of all such certifications and licenses, and any and all
notices and reports requested by Landlord, within five days of receipt
of such request.
21. Attempted Assignment of License. If (i) Tenant commits a default under
the Lease which remains uncured, (ii) Tenant, Guarantor or other Operator attempt
to transfer the Facility license or certification during the term of the Lease without
the prior written consent of Landlord (except for transfers between Tenant or Guarantor,
or their respective Affiliates, of which Landlord has received written notice) (iii)
at the end of the term of the Lease or any lease termination, Tenant does not renew
this Lease and the Premises are not acquired by Guarantor or an Affiliate of Guarantor
14 15 pursuant to the option to purchase
the Premises set forth in Section 44 of the Lease, or (iv) any governmental agency
or department terminates or fails to renew any ALF or other license and certification,
then, in any such event, Guarantor irrevocably appoints Landlord as its true and
lawful ATTORNEY-IN-FACT for the sole purpose of transferring such licenses and certifications
to Landlord. Guarantor hereby authorizes Landlord to execute on its behalf all documents
necessary for the outright transfer of such licenses and certifications hereunder
to Landlord and such documents may be process by Landlord with the appropriate department
of the applicable State government without hindrance or delay on the part of Tenant,
Manager, or Guarantor. This power of attorney shall be irrevocable and uncontestable
by Guarantor and implement the intention of the Parties, protect against transfers
of Tenant Personal Property, licenses, certifications, and Intangible Property by
and between Guarantor and Tenant, and for the purpose of securing and guaranteeing
the payment and performance of Tenant's obligations under the Lease, Guarantor,
as debtor, hereby grants to Landlord, as secured party, a secured interest in and
an express contractual lien upon, all of Guarantor's right, title and interest in
and to the Tenant Personal Property and in and to the Intangible Property and any
and all products and proceeds thereof (including all licenses, certifications, and
permits, to the extent legally transferable), in which Guarantor now owns or hereafter
acquires an interest or right, including any leased Tenant Personal Property, all
as otherwise provided under the Lease with respect to the Tenant and to the same
extent as if Guarantor had signed the Lease as Tenant. This Guaranty constitutes
a security agreement covering all such Tenant Personal Property, certifications,
licenses, permits, and Intangible Property.
22. Management Agreement. BCC acknowledges that BCC is the sole shareholder
of Manager. As the sole shareholder of Manager, BCC agrees and shall cause the Manager
to agree, that in the case of an Event of Default under the Lease (after applicable
cure periods): (i) Landlord shall have the right to terminate the Management Agreement
and the Manager's rights to manage the Facility, (ii) Landlord shall have the right
to require 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, Landlord shall have the right to approve or veto all operational budgets
and (iv) during such period, Manager shall otherwise take such actions or refrain
from taking such actions as Landlord may reasonably request.
15 16
23. Joint and Several Obligations. Except to the extent expressly provided
to the contrary herein, the liability and obligations of each entity comprising
Guarantor under this Guaranty shall be joint and several including, without limitation,
the provisions of Section 19.
[Signatures Begin on Next Page]
16 17
EXECUTED as of the date first set forth above.
"GUARANTOR"
BALANCED CARE CORPORATION,
a Delaware corporation
By:
Name: Robin L. Barber
Title: Senior Vice President, Legal Counsel
and Assistant Secretary
BALANCED CARE AT HAGERSTOWN, INC.,
a Delaware corporation
By:/s/Robin L. Barber
Name: Robin L. Barber
Title: Vice President and Secretary
BALANCED CARE AT JOHNSON CITY, INC.,
a Delaware corporation
By:/s/Robin L. Barber
Name: Robin L. Barber
Title: Vice President and Secretary
BALANCED CARE AT BRISTOL, INC.,
a Delaware corporation
By:/s/Robin L. Barber
Name: Robin L. Barber
Title: Vice President and Secretary
S-1 18
BALANCED CARE AT MURFREESBORO,
INC., a Delaware corporation
By:/s/Robin L. Barber
Name: Robin L. Barber
Title: Vice President and Secretary
BALANCED CARE AT TEAY'S VALLEY, INC.,
a Delaware corporation
By:/s/Robin L. Barber
Name: Robin L. Barber
Title: Vice President and Secretary
S-2 19
SCHEDULE 1
Guarantors and Tenants (Cumberland)
Guarantors:
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 Johnson 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
Tenants:
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 Johnson 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
Schedule 1