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EXHIBIT 10.59
ESCROW AGREEMENT
THIS AGREEMENT is made as of the 31st day of December, 1997, by and
among BALANCED CARE CORPORATION, a Delaware corporation, having its principal
place of business at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
("BCC") (hereinafter referred to as "BCC"), MEDITRUST ACQUISITION CORPORATION
II, a Delaware corporation, having its place of business at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter referred to as "Meditrust")
and ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ & FISH, LLP, a Massachusetts limited liability
partnership, having its place of business at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Escrow Agent").
W I T N E S S E T H:
WHEREAS, Meditrust has entered those certain Facility Lease Agreements,
more particularly described on EXHIBIT A attached hereto and incorporated herein
by reference, with various Subsidiaries (as hereinafter described) of BCC
(collectively, the "Leases") and the Lease Obligations (as defined under each
Lease) are guarantied by BCC;
WHEREAS, the holders of the lessees' interests under the Leases
(collectively, the "Lessees") have requested that (a) Meditrust consent to the
assignment by the Lessees of their respective interests under the Leases to the
seven (7) newly-formed single purpose entities described on EXHIBIT B attached
hereto and incorporated herein by reference (collectively, the "TC Realty
Subsidiaries"), which are Subsidiaries of TC Realty Holding Company, a Delaware
corporation (the "Parent") and (b) in connection with such assignment
transaction (the "Assignment Transaction"), Meditrust (i) enter into development
arrangements with BCC Development and Management Co., a Delaware corporation
(the "Developer") and the TC Realty Subsidiaries, pursuant to which, the
Developer will supervise the completion of the construction of each Facility (as
defined under each Lease), (ii) consent to the TC Realty Subsidiaries entering
into management agreements with Subsidiaries of BCC, (iii) make certain working
capital loans to the Parent (the "Working Capital Loans"), so that the Parent
can use the proceeds of such Working Capital Loans as equity contributions to
the TC Realty Subsidiaries and (iv) consent to the grant to BCC by the Parent of
options to acquire all of the issued and outstanding equity interests in the TC
Realty Subsidiaries;
WHEREAS, Meditrust is willing to consent to the Assignment Transaction
subject to certain conditions (the "Closing Conditions");
WHEREAS, notwithstanding the fact that the Closing Conditions have not
been satisfied, BCC has requested and Meditrust has agreed to place a portion of
the requested Working Capital Loan proceeds in escrow, subject to the terms
hereof;
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, Meditrust,
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BCC and the Escrow Agent agree with each other as follows:
1. DELIVERY INTO ESCROW: Concurrently with the execution and delivery of
this Agreement, Meditrust shall deliver TWO MILLION ONE HUNDRED FIFTY-NINE
THOUSAND EIGHT HUNDRED NINETEEN DOLLARS ($2,159,819) (the "Escrowed Funds") to
the Escrow Agent to hold such Escrowed Funds in an interest-bearing account,
with the interest accruing thereon to accrue to the benefit of Meditrust.
Meditrust hereby agrees that the Escrowed Funds shall be held in escrow by the
Escrow Agent until the earlier to occur of (i) the date of the consummation of
the Assignment Transaction (the "Closing Date"), which shall not occur unless
and until Meditrust has determined, in its sole and absolute discretion, that
all of the Closing Conditions have been satisfied and (ii) the Termination Date
(as hereinafter defined). The Termination Date shall be defined as February 27,
1998, unless the same is extended by Meditrust (in writing) in its sole and
absolute discretion.
2. OBLIGATION OF BCC: In consideration of Meditrust's agreement to place
the Escrowed Funds in escrow pursuant to the terms hereof, BCC hereby agrees to
pay to Meditrust, upon the earlier to occur of the Closing Date or the
Termination Date (as the same may be extended in accordance with the terms
hereof), an amount (the "Make-Whole Payment") equal to all costs and expenses
incurred by Meditrust in connection with all arrangements made by Meditrust to
place the Escrowed Funds in escrow pursuant to the terms hereof including,
without limitation, "Meditrust's Cost of Funds" (as hereinafter defined) minus
the interest, if any, earned on the Escrowed Funds. Calculation of the
Make-Whole Payment shall be determined on and as of the Closing Date or the
Termination Date (as the same may be extended in accordance with the terms
hereof), as applicable. The Make-Whole Payment shall be due and payable by BCC
whether or not the Assignment Transaction is consummated (regardless of the
reason); although, notwithstanding the foregoing, Meditrust agrees that, in the
event that the Assignment Transaction is consummated, the Make-Whole Payment may
be paid by the TC Realty Subsidiaries on the Closing Date in connection with the
consummation of the Assignment Transaction. The provisions of this Section 2
shall survive the expiration or earlier termination of this Agreement.
As used herein, "Meditrust's Cost of Funds" shall mean the interest
expense incurred by Meditrust in borrowing the Escrowed Funds at the "Prime
Rate" (as hereinafter defined). As used herein, the Prime Rate shall mean the
variable rate of interest per annum from time to time announced by Fleet Bank of
Connecticut, N.A. ("Fleet") as its prime rate of interest, and in the event that
Fleet no longer announces a prime rate of interest, then the Prime Rate shall be
deemed to be the variable rate of interest per annum which is the prime rate of
interest or base rate of interest from time to time announced by any other major
bank or other financial institution reasonably selected by Meditrust.
3. TERMS OF THE ESCROW ARRANGEMENT: In the event that the Assignment
Transaction is consummated on or prior to the Termination Date (as the same may
be extended in accordance with the terms hereof), on the Closing Date, Meditrust
shall instruct
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the Escrow Agent to disburse the Escrowed Funds in accordance with the
Disbursement Authorization Statement approved by Meditrust in connection with
the consummation of the Assignment Transaction. In the event that the Assignment
Transaction is not consummated on or prior to the Termination Date (as the same
may be extended in accordance with the terms hereof), Meditrust shall instruct
the Escrow Agent to return the Escrowed Funds to Meditrust. Meditrust shall
endeavor to provide to BCC copies of all written instructions furnished by
Meditrust to the Escrow Agent concurrently with the delivery of the same to the
Escrow Agent, but Meditrust shall have no liability as a result of any failure
to provide such copies to BCC.
4. THE ESCROW AGENT'S DUTIES: The Escrow Agent may rely upon and shall be
protected in acting or refraining from acting upon any written notice,
instruction, request, affidavit, or other instrument, document or agreement
furnished to it by Meditrust pursuant to this Agreement or in connection with
the Escrowed Funds and believed by it to be genuine and to have been signed or
presented by the proper Person and shall have no duty to examine or pass upon
the validity, effectiveness or genuineness of any such notice, instruction,
request, affidavit, certificate or other instrument, document or agreement.
The Escrow Agent's duties hereunder shall be limited to the safekeeping
and disbursement of the Escrowed Funds pursuant to the terms and provisions
hereof. The Escrow Agent undertakes to perform only such duties or obligations
as are expressly set forth herein and no duties or obligations shall be implied
against the Escrow Agent. Except as expressly set forth herein, the Escrow Agent
shall be under no obligation to refer to any other document or agreement between
or among the parties hereto or related in any way to the proposed Assignment
Transaction. Without limiting any other provision hereof, the Escrow Agent shall
not be liable to Meditrust or BCC or any other Person for any action taken or
omitted to be taken by the Escrow Agent or for any claims, actions, causes of
action, judgments, damages, liabilities, losses, costs or expenses, unless
caused by the Escrow Agent's gross negligence or willful misconduct.
The Escrow Agent shall bear no responsibility for the financial
condition of the issuer of any check, certified check or money order or of any
depository into which the Escrowed Funds are deposited. Without limiting the
foregoing, the Escrow Agent shall deposit the Escrowed Funds in an interest
bearing account with the financial institution where the Escrow Agent
customarily maintains its client trust fund accounts.
BCC acknowledges that (i) the Escrow Agent is entitled to rely on any
instructions received by the Escrow Agent from Meditrust as to whether it may
release any of the Escrowed Funds held under and pursuant to this Agreement and
(ii) the Escrow Agent is obligated to release the Escrowed Funds in accordance
with any instructions received by the Escrow Agent from Meditrust. Upon release
of the Escrowed Funds in accordance with any instructions received by the Escrow
Agent from Meditrust, the Escrow Agent shall have no further liability
hereunder. If threatened with litigation, the Escrow Agent is authorized by
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Meditrust and BCC to interplead all interested parties in any court of competent
jurisdiction and to deposit the Escrowed Funds with such court and thereupon the
Escrow Agent shall be fully relieved and discharged of any further
responsibility under the Escrow Agreement. While the Escrow Agent may act as its
own counsel hereunder, the Escrow Agent may also consult with counsel of its own
choice and shall have full and complete authorization and protection for any
action taken or omitted to be taken or suffered by it hereunder in accordance
with the advice of said counsel.
BCC further acknowledges that the Escrow Agent acts as counsel to
Meditrust, Meditrust Corporation, a Delaware corporation, that is the sole
shareholder of Meditrust (the "REIT") and various Subsidiaries and affiliates of
the REIT (and that, without limiting the foregoing, the Escrow Agent is acting
as counsel to Meditrust in connection with the Assignment Transaction) and BCC
agrees the Escrow Agent may continue to act to act as such counsel,
notwithstanding any dispute or litigation arising with respect to the Escrowed
Funds or the duties of the Escrow Agent hereunder.
Meditrust and BCC jointly and severally agree to defend, indemnify and
hold the Escrow Agent harmless from any losses, damages, claims or liabilities
arising out of or in connection with the Escrow Agent's acts or failure to act
hereunder and the Escrow Agent shall be entitled to reimbursement by Meditrust
and BCC, jointly and severally, for all reasonable costs and expenses incurred
in the performance of its duties hereunder, including, without limitation, all
out-of-pocket expenses and reasonable attorneys' fees and expenses of counsel
retained by the Escrow Agent, but excluding (for the purposes of this paragraph
only) those costs and expenses chargeable to Meditrust insofar as the Escrow
Agent acts as counsel to Meditrust.
5. SUCCESSORS AND ASSIGNS: This Agreement shall inure to and be binding
on BCC, Meditrust and the Escrow Agent and their respective heirs, executors,
administrators, legal representatives and successors and assigns.
Notwithstanding the foregoing, none of the parties hereto may assign any of its
respective rights or obligations hereunder without the prior consent of the
others.
6. NO THIRD PARTY BENEFICIARIES: This Agreement is solely for the benefit
of Meditrust, the Escrow Agent and BCC and nothing contained herein shall confer
upon any Person, other than BCC, Meditrust and the Escrow Agent and their
respective successors and assigns, any right to insist upon or to enforce the
performance or observance of any of the obligations contained herein.
7. GOVERNING LAW: This Agreement shall be construed, and the rights and
obligations of the parties hereto shall be determined, in accordance with the
laws of the Commonwealth of Massachusetts.
To the maximum extent permitted by applicable law, BCC hereby submits
to the
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jurisdiction of the courts of the Commonwealth of Massachusetts and the United
States District Court for the District of Massachusetts, as well as to the
jurisdiction of all courts from which an appeal may be taken from the aforesaid
courts, for the purpose of any suit, action or other proceeding arising out of,
or with respect to this Agreement and expressly waives any and all objections
BCC may have as to venue in any of such courts.
8. NOTICES: 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 (i) if
personally delivered, upon delivery; (ii) if sent by certified mail, three (3)
Business Days after the date of the postmark; or (iii) if by overnight delivery,
the next Business Day after being placed in the possession of the delivery
service, and addressed as follows:
IF TO BCC: Balanced Care Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: President
WITH COPIES TO: Balanced Care Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
and
▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
IF TO MEDITRUST: Meditrust Acquisition Corporation II
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chief Operating Officer
WITH COPIES TO: Meditrust Acquisition Corporation II
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
and
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ & Fish, LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
IF TO THE ESCROW AGENT: ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ & Fish, LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
or at such other place as any party hereto may from time to time hereafter
designate to the others in writing.
9. LIMITATION OF MEDITRUST LIABILITY: BCC acknowledges that Meditrust has
agreed to enter into this Agreement and to place the Escrowed Funds into escrow
in accordance with the terms hereof at the request of and as an accommodation to
BCC. BCC further acknowledges and agrees that notwithstanding Meditrust's
agreement to place the Escrowed Funds into escrow in accordance with the terms
hereof, Meditrust shall be under no obligation whatsoever to (i) consent to the
Assignment Transaction (and Meditrust shall not be deemed to have committed to
consenting to Assignment Transaction), (ii) make any Working Capital Loans or
(iii) extend the Termination Date beyond February 27, 1998, if the Assignment
Transaction is not consummated (for any reason whatsoever) on or before such
date. BCC also acknowledges and agrees that all of the Closing Conditions have
not yet been identified. Without limiting the foregoing, BCC acknowledges and
agrees that, in the event that the Assignment Transaction is consummated and
Meditrust has agreed to make the Working Capital Loans, the maximum principal
amount of the Working Capital Loans shall not exceed the amounts set forth on
EXHIBIT C attached hereto and incorporated herein by reference.
10. AMENDMENTS, WAIVERS AND MODIFICATIONS: This Agreement sets forth the
entire agreement of the parties with respect to the subject matter hereof and
none of the terms, covenants, conditions, warranties or representations
contained in this Agreement may be renewed, replaced, amended, modified,
extended, substituted, revised, waived, consolidated or terminated, except by an
agreement, in writing, signed by the Person against whom enforcement is sought
or except as otherwise expressly provided herein.
11. CAPTIONS AND HEADINGS: The captions and headings set forth in this
Agreement are included for convenience and reference only and the words
contained therein shall in no way be held or deemed to define, limit, describe,
explain, modify, amplify or add to the interpretation, construction or meaning
of, or the scope or intent of, this Agreement or any part hereof.
12. TIME OF THE ESSENCE: Time is of the essence of each and every term,
condition, covenant and warranty set forth herein.
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13. COUNTERPARTS: This Agreement may be executed in one or more
counterparts, each of which taken together shall constitute an original and all
of which shall constitute one and the same instrument.
14. RULES OF CONSTRUCTION: References in this Agreement to "herein",
"hereof" and "hereunder" shall be deemed to refer to this Agreement and shall
not be limited to the particular text or Section in which such words appear. The
use of any gender shall include all genders and the singular number shall
include the plural and vice versa as the context may require.
As used herein, the term "Business Day" shall mean: any day which is
not a Saturday or Sunday or a public holiday under the laws of the United States
of America or the Commonwealth of Massachusetts.
As used herein, the term "including", when following any general
statement, will not be construed to limit such statement to the specific items
or matters as provided immediately following the term "including" (whether or
not non-limiting language such as "without limitation" or "but not limited to"
or words of similar import are also used), but rather will be deemed to refer to
all items or matters that could reasonably fall within the broader scope of the
general statement.
As used herein, the term "Governmental Authority" shall mean: All
agencies, authorities, bodies, boards, commissions, courts, instrumentalities,
legislatures and offices of any nature whatsoever for any government unit or
political subdivision, whether federal, state, county, district, municipal, city
or otherwise, and whether now or hereafter in existence.
As used herein, the term "Person" shall mean: All individuals,
corporations, general and limited partnerships, stock companies or associations,
joint ventures, unincorporated associations, companies, trusts, banks, trust
companies, land trusts, business trusts, Governmental Authorities and other
entities of every kind and nature.
As used herein, the term "Subsidiary" shall mean: With respect to any
Person, any corporation or other entity, fifty percent (50%) or more of the
outstanding capital stock or other ownership interest having general voting
power (under ordinary circumstances) of which, is owned or controlled, directly
or indirectly (through one or more Subsidiaries) by any such Person.
EXECUTED as a sealed instrument as of the day and year first above
mentioned.
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WITNESS: MEDITRUST ACQUISITION CORPORATION II,
a Delaware corporation
/s/ Signature Illegible By: /s/ Signature Illegible
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Name: Name:
Title:
WITNESS: BALANCED CARE CORPORATION,
a Delaware corporation
/s/ Signature Illegible By: /s/ Signature Illegible
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Name: Name:
Title:
WITNESS: ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ & FISH, LLP,
a Massachusetts limited
liability partnership
/s/ Signature Illegible By: /s/ Signature Illegible
---------------------------------- ----------------------------------
Name: Name:
Title:
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