1
EXHIBIT 10.23
FORM OF
ASSIGNMENT AND SECURITY AGREEMENT
THIS ASSIGNMENT AND SECURITY AGREEMENT, made as of _________________
________________ by and between _______________________ ("Lessee") and its
successors and assigns ("Lessor").
R E C I T A L S:
A. Lessee desires to enter into a lease agreement (the "Lease" and
together with any other documents executed in connection therewith, the "Lease
Documents") with respect to a facility known as ______________________________
_________________ (the "Facility"), located at certain real property more
particularly described in Exhibit A hereto (the real property and improvements
now or hereafter existing thereat are referred to herein as the "Property").
B. As a condition precedent to Lessor entering into the Lease, Lessor
requires a security interest in all of Lessee's right, title, and interest in
and to the Collateral hereinafter defined.
NOW, THEREFORE, in consideration of the recitals, Ten Dollars ($10.00)
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Lessee and Lessor hereby covenant and agree as herein
provided.
1. DEFINITIONS. For the purposes of this Assignment and Security
Agreement (referred to herein as the "Assignment" or the "Agreement"), the
following defined terms shall have the following meanings:
"ACCOUNTS" means any rights of Lessee arising from the operation of
the Facility to payment for goods sold or leased or for services rendered, not
evidenced by an Instrument, including, without limitation, (i) all accounts
arising from the operation of the Facility and (ii) all rights to payment (if
any) from Medicare or Medicaid programs or similar state or federal programs,
boards, bureaus or agencies and rights to payments from patients or private
insurers, arising from the operation of the Facility. Accounts shall include
the proceeds thereof (whether cash or noncash, moveable or immoveable, tangible
or intangible) received from the sale, exchange, transfer, collection or other
disposition or substitution thereof.
"ACCRUED RENTS" means all rights of Lessee, as lessor or sublessor,
to payment arising when rent is earned under leases for retail space or other
space in the Facility (including, without limitation, rights to payment earned
under written leases for space in the Facility for the operation of ongoing
retail businesses such as barbershops, beauty shops, medical offices,
pharmacies and specialty shops).
2
"COLLATERAL" means Accounts, Accrued Rents, General Intangibles,
Instruments, Money, and, to the extent assignable, Permits and Reimbursement
Contracts, whether now owned or hereafter at any time acquired by Lessee and
wherever located, and includes all replacements, additions, accessions,
substitutions, proceeds (including without limitation, proceeds of insurance)
and products relating thereto; provided, however, that with respect to any
items which are leased and not owned by Lessee, the term "Collateral" includes
the leasehold interest only of Lessee together with any options to purchase any
of said items and any additional or greater rights with respect to such items
which Lessee may hereafter acquire.
"EVENT OF DEFAULT" means any Event of Default as defined in the
Lease.
"GENERAL INTANGIBLES" means all intangible personal property of
Lessee arising out of or connected with the Facility (other than Accounts,
Accrued Rents, Instruments, Money and Permits).
"INSTRUMENTS" means all instruments, chattel paper, documents or
other writings obtained by Lessee from or in connection with the operation of
the Facility (including, without limitation, all ledger sheets, computer
records and printouts, data bases, programs, books of account and files of
Lessee relating thereto).
"LEASE DEFAULT" means a default under the Lease which is not timely
cured within applicable cure periods, if any.
"LEASE OBLIGATIONS" means the aggregate of all amounts owing from
time to time under the Lease and all expenses, charges and other amounts from
time to time owing under this Agreement or the Lease, and all covenants,
agreements and other obligations from time to time owing to, or for the benefit
of, Lessor pursuant to the Lease.
"MONEY" means all monies, cash, rights to deposit or savings
accounts or other items of legal tender obtained from or for use in connection
with the operation of the Facility.
"PERMITS" means all licenses, permits and certificates obtained by
or in the name of Lessee in connection with the operation, use or occupancy of
the Facility, including, without limitation, business licenses, state health
department licenses, food service licenses, licenses to conduct business,
certificates of need and all such other permits, licenses and rights, obtained
by or in the name of Lessee from any governmental, quasi-governmental or
private Person whatsoever concerning operation, use or occupancy.
"PERSON" means any person, firm, corporation, partnership trust or
other entity.
"REIMBURSEMENT CONTRACTS" means all third party reimbursement
contracts for the Facility which are now or hereafter in effect with respect to
patients qualifying for
2
3
coverage under the same, including Medicare, Medicaid, and any successor
program or other similar reimbursement program and private insurance
agreements.
Singular terms shall include the plural forms and vice versa, as
applicable, of the terms defined.
Terms contained in this Agreement shall, unless otherwise defined
herein or unless the context otherwise indicates, have the meanings, if any,
assigned to them by the Uniform Commercial Code in effect in the State of
Alabama.
All references to other documents or instruments shall be deemed to
refer to such documents or instruments as they may hereafter be extended,
renewed, modified, or amended and all replacements and substitutions therefor,
except that any amendments to the Lease without Lessor's prior written consent
will be void.
2. SECURITY INTEREST. Lessee hereby grants to Lessor a security
interest in the Collateral in order to secure payment and performance of the
Lease Obligations. Until the occurrence of an Event of Default, however, Lessee
shall have the right to collect all proceeds of the Collateral and to take
other action with respect to the Collateral, subject to the provisions of this
Assignment.
3. COLLATERAL SECURITY. Upon the payment of the Lease Obligations and
such payment becoming final and no longer subject to refund or rescission under
bankruptcy or other applicable law, the security interest in the Collateral
created by Section 1, and all rights herein granted to Lessor, shall be
released and all the estate, right, title, interest, claim and demand of Lessor
in and to the Collateral shall revert to Lessee, and Lessor shall at the
request of Lessee deliver to Lessee an instrument cancelling this Assignment
and terminating the security interest in the Collateral created by this
Assignment, but until such time the same shall remain in full force and effect.
4. TITLE. Lessee will defend the Collateral against all claims and
demands of all entities at any time claiming the Collateral, or any portion
thereof or interest therein.
5. FURTHER ACTIONS. Lessee will, at the request of Lessor (i) join
with Lessor in executing one or more financing statements or other documents
necessary or appropriate to evidence or secure the Lease Obligations, or
perfect the security interest in the Collateral created by this Assignment, in
form and content satisfactory to Lessor; (ii) ▇▇▇▇ any chattel paper to reflect
Lessor's interest therein; and (iii) take any other action or execute any other
instrument deemed necessary or appropriate in the judgment of Lessor to perfect
or continue the perfection of the security interest of Lessor in the Collateral
and to protect the Collateral against the rights, claims or interests of all
other entities.
6. NO ENCUMBRANCES. Except for any lease or grant of purchase money
security interests in new items of tangible personal property having an
aggregate cost during the Lease term of an amount not to exceed $25,000, Lessee
will not, without the express
3
4
prior written approval of Lessor, in any way encumber, or hypothecate, or
create or permit to exist any lien, security interest or encumbrance or other
interest in the Collateral except the security interest in favor of Lessor.
7. COLLECTION. Lessee will diligently, in accordance with good
business practices, pursue collection of all portions of the Collateral which
consist of obligations or indebtedness owed to Lessee by other Persons, and
Lessee will, in a timely manner, in accordance with good business practices,
file (and assign to Lessor) any liens available to protect the rights of Lessee
to payment of such obligations or indebtedness and will give all prior notices
thereof required by law.
8. RECORDS. Lessee will, upon request by Lessor at any time and from
time to time, deliver or make available to Lessor records and schedules
reflecting the accurate and complete status, condition and location of the
Collateral.
9. INFORMATION. Lessee will promptly advise Lessor by notice if Lessee
should change its principal place of business or chief executive office from
the address set forth in Section 15 hereof, which Lessee represents to be its
present principal place of business and chief executive office. Lessee will
advise Lessor of any information which may adversely affect the value of the
Collateral or the rights or remedies of Lessor with respect to the Collateral.
10. BOOKS AND RECORDS. Lessee will maintain complete and accurate
account books and records with respect to the operation of the Facility, which
books and records shall reflect the consistent application of generally
accepted accounting principles, and Lessee will make such books and records
available at reasonable times for inspection and copying by Lessor or its
agents.
11. REMEDIES. In addition to all other remedies available under the
Lease and as otherwise may be available at law or in equity, Lessor may, upon
the occurrence of an Event of Default, pursue any, all or any combination of
the remedies described in subsections 11(a) through 11(g):
(a) Exercise any and all of the rights and remedies for which
provision is made by the applicable Uniform Commercial Code, together
with the right to recover the reasonable attorneys' fees and legal
expenses incurred by Lessor in the enforcement of this Assignment or
in connection with any redemption of the Collateral, including fees
and expenses on appeal and in any bankruptcy proceedings.
(b) Require Lessee to assemble the Collateral, or any portion
thereof, and make such available at one or more places as Lessor may
designate, and to deliver possession of the Collateral to Lessor,
which shall have full right to enter upon any or all of the premises
and property of Lessee to exercise Lessor's rights hereunder.
4
5
(c) Use, operate and control the Collateral to preserve the
Collateral or the value thereof.
(d) Enforce one or more remedies hereunder, successively or
concurrently, and such action shall not operate to estop or prevent
Lessor from pursuing any other or further remedy which Lessor may
have.
(e) In connection with any public or private sale under the
applicable Uniform Commercial Code, Lessor shall give Lessee ten (10)
business days' notice of the time and place of any public sale of the
Collateral or of the time after which any private sale or other
intended disposition thereof is to be made, which notice shall be
deemed to be reasonable notice of such sale or other disposition. Such
notice may be mailed to Lessee at the address and in the manner set
forth in Section 14.
(f) In the event Lessor recovers possession of all or any part of
the Collateral pursuant to a writ of possession or other judicial
process, whether prejudgment or otherwise, Lessor may thereafter
retain, sell or otherwise dispose of such Collateral in accordance
with this Assignment or the applicable Uniform Commercial Code, and
following such retention, sale or other disposition, Lessor may
voluntarily dismiss without prejudice the judicial action in which
such writ of possession or other judicial process was issued. Subject
to the provisions of applicable law, Lessee hereby consents to the
voluntary dismissal by Lessor of such judicial action, and Lessee
further consents to the exoneration of any bond which Lessor may have
filed in such action.
(g) Lessor may notify Lessee's account debtors with respect to
any Accounts to make payment directly to Lessor or to one or more
accounts as designated by Lessor (which in Lessor's judgment will in
the case of Medicare or Medicaid Accounts comply with any legal
requirements of Medicare or Medicaid), and Lessor is hereby authorized
by Lessee (and is appointed attorney-in-fact of Lessee) to sign and
endorse Lessee's name upon any such notice to account debtors and upon
any check, draft, money order or other form of payment of any Account,
and, after applying the same first to expenses of collection and
enforcement of the Accounts, including attorneys' fees, the Lessor may
apply the same to reduce the Lease Obligations in such order as Lessor
shall elect. Lessor shall not be liable for failure to collect or to
enforce any Accounts or for any action or omission on the part Lessor,
its officers, agents and employees in enforcing such Accounts.
12. WAIVER OF CERTAIN LAWS. Lessee agrees that in case of any Event of
Default, neither Lessee nor anyone claiming through or under Lessee will set
up, claim or seek to take advantage of any appraisement, valuation, stay,
extension, homestead, exemption or redemption laws now or hereafter in force,
or otherwise seek to prevent or hinder the enforcement of this Agreement, or
the final and absolute realization of Lessor upon the security interests
created by this Agreement, and Lessee, for Lessee and all who may at any time
claim through or under any Lessee, hereby waives to the full extent that Lessee
may
5
6
lawfully do, the benefit of all such laws, and any and all right to have the
assets comprising the security intended to be created hereby (that is, the
Collateral) marshalled upon any exercise of the remedies provided herein.
13. RECORDING AND FILING. A UCC-1 financing statement may be filed
and/or recorded, and from time to time thereafter be refiled and/or rerecorded
at the option of Lessor, in the local and state filing offices in Pennsylvania
and other states where Lessor deems advisable in order to perfect or continue
the perfection of Lessor's interest in the Collateral or any part thereof, and
Lessee agrees to pay (or reimburse the Lessor if Lessor pays) the fees and
taxes for such filing or recording.
14. NOTICES. Each notice to Lessee required herein, or by applicable
law, shall be in writing and shall be deemed received (a) on the date
delivered, if sent by hand delivery (to the person or department if one is
specified below), (b) three (3) days following the date deposited in U. S.
mail, certified or registered, with return receipt requested, or (c) one (1)
day following the date deposited with Federal Express or other national
overnight carrier, and in each case addressed as follows:
If to Lessee:
Balanced Care Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
If to Lessor:
Capstone Capital of Pennsylvania
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Any party may change its address to another single address by notice given as
herein provided, except any change of address notice must be actually received
in order to be effective.
15. [Intentionally Omitted]
16. WAIVER. No consent or waiver, express or implied, by any party to
this Agreement to or of any breach or default by any other party to this
Agreement in the performance by such other party of the obligations thereof
under this Agreement shall be deemed or construed to be a consent or waiver to
or of any other breach or default in the performance by such other party of the
same or any other obligations of such other party under this Agreement. Failure
on the part of any party to this Agreement to complain of any
6
7
act or failure to act of any other party to this Agreement or to declare such
other party in default, irrespective of how long such failure continues, shall
not constitute a waiver by such party of the rights thereof under this
Agreement.
17. SEVERABILITY, COMPLETE AGREEMENT. If any provision of this
Agreement or the application thereof to any Person or circumstance shall be
invalid or unenforceable to any extent, the remainder of this Agreement and the
application of such provisions to any other Person or circumstance shall not be
affected thereby, and such provisions shall be enforced to the greatest extent
permitted by law. This Agreement and the Lease Documents, and the instruments
executed in connection herewith, constitute the full and complete agreement of
the parties and supersede all prior negotiations, correspondence, and memoranda
relating to the subject matter thereof.
18. AMENDMENT. Neither this Agreement nor any provision hereof may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against whom enforcement of the change, waiver,
discharge or termination is sought.
19. HEADINGS; NUMBER AND GENDER. The headings of the sections,
paragraphs and subdivisions of this Agreement are for convenience of reference
only, are not to be considered a part hereof and shall not limit or otherwise
affect any of the terms hereof.
20. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall comprise but a single instrument.
21. BINDING AGREEMENT. The provisions of this Agreement shall apply
to, inure to the benefit of, and bind Lessee and Lessor and their respective
successors and assigns thereof.
22. INTERPRETATIONS. No provisions of this Agreement shall be
construed against or interpreted to the disadvantage of any party to this
Agreement by any court or other governmental or judicial authority by reason of
such party's having or being deemed to have structured or dictated such
provision.
23. RELATIONSHIP OF PARTIES. No express or implied term, provision or
condition of this Agreement, considered without reference to any other or
external agreement, shall or shall be deemed to constitute the parties of this
Agreement as partners or joint venturers.
24. COSTS AND EXPENSES. Lessee will bear all expenses (including legal
fees and expenses of Lessor's counsel and including fees and expenses on appeal
and in bankruptcy) in connection with any advice or other representation with
respect to this Agreement, or to collect the Lease Obligations, or any part
thereof, or to take any action with respect to any suit or proceeding relating
to this Agreement or the Collateral, either where Lessor is named as a party or
participates as a party, or to protect, collect, or liquidate any of the
Collateral
7
8
for the Lease Obligations or to attempt to enforce any security interest or
lien granted to Lessor by the Lessee.
25. CONTROLLING LAW. The validity, interpretation, enforcement and
effect of this Agreement shall be governed by, and construed in accordance
with, the laws of the State of Alabama.
26. WAIVER OF JURY TRIAL. LESSEE HEREBY WAIVES ANY RIGHT THAT IT MAY
HAVE TO A TRIAL BY JURY ON ANY CLAIM, COUNTERCLAIM, SETOFF, DEMAND, ACTION OR
CAUSE OF ACTION (A) ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR
THE LEASE, OR (B) IN ANY WAY CONNECTED WITH OR PERTAINING OR RELATED TO OR
INCIDENTAL TO ANY DEALINGS OF LESSOR AND/OR LESSEE WITH RESPECT TO THE LEASE OR
IN CONNECTION WITH THIS AGREEMENT OR THE EXERCISE OF EITHER PARTY'S RIGHTS AND
REMEDIES UNDER THIS AGREEMENT OR OTHERWISE, OR THE CONDUCT OR THE RELATIONSHIP
OF THE PARTIES HERETO, IN ALL OF THE FOREGOING CASES WHETHER NOW EXISTING OR
HEREAFTER ARISING AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. LESSEE
AGREES THAT LESSOR MAY FILE A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN
EVIDENCE OF THE KNOWING, VOLUNTARY, AND BARGAINED AGREEMENT OF LESSEE
IRREVOCABLY TO WAIVE ITS RIGHTS TO TRIAL BY JURY AS AN INDUCEMENT OF LESSOR TO
ENTER INTO THE LEASE, AND THAT, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY
DISPUTE OR CONTROVERSY WHATSOEVER (WHETHER OR NOT MODIFIED HEREIN) BETWEEN
BORROWER, LESSEE AND LESSSORSHALL INSTEAD BE TRIED IN A COURT OF COMPETENT
JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.
IN WITNESS WHEREOF, Lessee and Lessor have cause this Agreement to be
properly executed as of the day and year first above written.
LESSEE:
8
9
LESSOR:
By:
Its:
9
10
SCHEDULE TO EXHIBIT 10.23 FILED PURSUANT TO INSTRUCTION 2 TO ITEM 601(a) OF
REGULATION S-K
ASSIGNMENT AND SECURITY AGREEMENT
---------------------------------
PROJECT PARTIES FACILITY DATE
------- ------- -------- ----
Bloomsburg, PA Capstone Capital of Pennsylvania, Inc. and Bloomsburg Manor Personal Care and 1/31/97
BCC at Bloomsburg, Inc. Retirement Center
Blakely, PA Capstone Capital of Pennsylvania, Inc. and ▇▇▇▇▇▇▇-▇▇▇▇ Health Care Center 1/31/97
BCC at ▇▇▇▇▇▇▇, Inc.
Kingston I, PA Capstone Capital of Pennsylvania, Inc. and Kingston Manor Personal Care and 1/31/97
BCC at Kingston I, Inc. Retirement Center
Kingston II, PA Capstone Capital of Pennsylvania, Inc. and Kingston Health Care Center 1/31/97
BCC at Kingston II, Inc.
Mid-Valley, PA Capstone Capital of Pennsylvania, Inc. and Mid-Valley Manor Personal Care and 1/31/97
BCC at Mid-Valley, Inc. Retirement Center
Old Forge, PA Capstone Capital of Pennsylvania, Inc. and Old Forge Manor Personal Care and 1/31/97
BCC at Old Forge, Inc. Retirement Center
West View, PA Capstone Capital of Pennsylvania, Inc. and West Side Manor Personal Care and 1/31/97
BCC at West View, Inc. Retirement Center
Nevada, MO (2 Capstone Capital Corporation and ▇▇▇ ▇▇▇▇▇ Residential Care Home 5/15/97
Agreements) BCC at Missouri, Inc. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇, ▇▇ Capstone Capital Corporation and ▇▇▇ ▇▇▇▇▇ Residential Care Home 5/15/97
BCC at Missouri, Inc. ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇
▇▇▇▇▇, ▇▇ Capstone Capital Corporation and ▇▇▇ ▇▇▇▇▇ Residential Care Home 8/18/97
BCC at Lamar, Inc. ▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇
Roanoke, VA ALCO II, L.L.C. and BCC at Roanoke, Inc. Outlook Pointe at Roanoke 6/30/97
Harrisonburg, VA ALCO I, L.L.C. and BCC at Harrisonburg, Outlook Pointe at Harrisonburg 6/30/97
Inc.
Danville, VA ALCO III, L.L.C. and BCC at Danville, Inc. Outlook Pointe at Danville 9/3/97
11
SCHEDULE TO EXHIBIT 10.23 FILED PURSUANT TO INSTRUCTION 2 OF ITEM 601(a) OF
REGULATION S-K
SECURITY AGREEMENT
------------------
PROJECT PARTIES FACILITY DATE
------- ------- -------- ----
Hampden Township, PA Capstone Capital of Pennsylvania, Inc. and Outlook Pointe at 9/30/97
ALCO VI, L.L.C. Creekview
