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EXHIBIT 99.5
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EXECUTION COPY
AGREEMENT REGARDING RELATED LEASE TRANSACTIONS
MEDITRUST ACQUISITION CORPORATION III
THIS AGREEMENT is made as of the 30th day of December, 1996 by and
among (I) ALS LEASING, INC., a Delaware corporation, having its principal place
of business at 450 North Sunnyslope Road, Suite 300, Brookfield, Wisconsin
53005; (II) ALTERNATIVE LIVING SERVICES, INC., a Delaware corporation, having
its principal place of business at 450 North Sunnyslope Road, Suite 300,
Brookfield, Wisconsin 53005 ("ALS"); and (III) MEDITRUST ACQUISITION
CORPORATION III, a Delaware corporation, having its principal place of business
at c/o Meditrust Mortgage Investments, Inc., 197 First Avenue, Needham Heights,
Massachusetts 02194 ("Meditrust").
W I T N E S S E T H:
WHEREAS, ALS is in the business of operating assisted living
facilities;
WHEREAS, Meditrust is in the business of providing for the
acquisition, development and operation of such facilities;
WHEREAS, in connection with transactions between ALS and Meditrust
which have been consummated concurrently with the effectiveness of this
Agreement and also in connection with transactions between ALS or its
Affiliates (hereinafter defined) and Meditrust or its Affiliates which are
contemplated to occur in the future, ALS, for itself and its Affiliates, and
Meditrust, for itself and its Affiliates, desire to establish certain
arrangements to govern the relationship of present and future transactions
between them, including, without limitation, the following, all as more
particularly set forth in the operative provisions of this Agreement:
(A) the requirement that particular rights available to ALS with
respect to different facilities be exercised simultaneously
with each other;
(B) the cross-defaulting of all transactions between ALS and its
Affiliates and Meditrust and its Affiliates;
(C) the reduction of cash collateral held by Meditrust in the
event certain transactions with ALS and its Affiliates satisfy
specified financial tests;
(D) the combination of the results of certain financial tests with
respect to the performance of various facilities for purposes
of ascertaining their compliance with Meditrust's or its
Affiliates' expectations of financial performance;
(E) the joining of Affiliates of ALS and of Meditrust in the
agreements reflected herein upon the occurrence of future
transactions; and
(F) the other matters as are hereinafter set forth;
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NOW, THEREFORE, for good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the parties hereto act and agree
as follows:
1. DEFINITIONS. All capitalized terms used herein not expressly
defined herein shall have the same meanings ascribed to such terms in the
Acquisition Facility Leases. For all purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires, the
following terms shall have the following meanings and shall include the plural
and the singular:
(A) ACQUISITION FACILITY: A Group One Acquisition Facility or a
Group Two Acquisition Facility, as the context permits.
(B) ACQUISITION FACILITY LEASE: A Group One Acquisition Facility
Lease or a Group Two Acquisition Facility Lease, as the context permits.
(C) ACQUISITION GROUP: The ALS Parties which are parties to the
Group One Acquisition Transaction Documents (other than this Agreement) or the
Group Two Acquisition Transaction Documents (other than this Agreement), as the
case may be.
(D) AFFILIATE: With respect to any Person (I) any other Person
which, directly or indirectly, controls or is controlled by or is under common
control with such Person, (II) any other Person that owns, beneficially,
directly or indirectly, five percent (5%) or more of the outstanding capital
stock, shares or equity interests of such Person or (III) any officer,
director, employee, general partner or trustee of such Person, or any other
Person controlling, controlled by, or under common control with, such Person
(excluding trustees and Persons serving in a fiduciary or similar capacity who
are not otherwise an Affiliate of such Person), whether now or hereafter
existing. For the purposes of this definition, "control" (including the
correlative meanings of the terms "controlled by" and "under common control
with"), as used with respect to any Person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of such Person, through the ownership of voting securities,
partnership interests or other equity interests.
(E) AGGREGATE MEDITRUST INVESTMENTS: The sum total of the
Meditrust Investments (as such term is defined in the applicable Acquisition
Facility Leases).
(F) AGGREGATE NET FAIR MARKET VALUE: The sum of the Fair Market
Value of the Leased Property minus the Fair Market Added Value (as such terms
are defined in the applicable Acquisition Facility Leases) under all of the
applicable Acquisition Facility Leases.
(G) ALS PARTIES: ALS, the Lessee and any other of ALS'
Affiliates.
(H) FISCAL QUARTER: As defined in the applicable Acquisition
Facility Lease.
(I) GROUP ONE ACQUISITION FACILITIES: Those Acquisition
Facilities first becoming subject to Meditrust/ALS Transaction Documents which,
pursuant to the applicable Meditrust/ALS Transaction Documents, have Original
Meditrust Investments which in the aggregate total approximately FIFTY MILLION
DOLLARS ($50,000,000) as described on EXHIBIT A attached hereto, as the same
may be amended or modified from time to time.
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(J) GROUP ONE ACQUISITION FACILITY LEASES: The Acquisition
Facility Leases now or hereafter entered into in connection with the Group One
Acquisition Facilities, as the same may be modified and amended from time to
time.
(K) GROUP ONE ACQUISITION GROUP: The ALS Parties which are
parties to the Group One Acquisition Transaction Documents (other than this
Agreement).
(L) GROUP ONE ACQUISITION TRANSACTION DOCUMENTS: The documents
now or hereafter entered into by and between ALS Parties and Meditrust Parties
in connection with the Group One Acquisition Facilities, as the same may be
modified and amended from time to time, including, without limitation, the
Group One Acquisition Facility Leases and the "Lease Documents" referenced
therein.
(M) GROUP TWO ACQUISITION FACILITIES: Those Acquisition
Facilities, other than the Group One Acquisition Facilities, becoming subject
to Meditrust/ALS Transaction Documents which, pursuant to the applicable
Meditrust/ALS Transaction Documents, have Original Meditrust Investments which
in the aggregate total approximately FIFTY MILLION DOLLARS ($50,000,000) as
described on EXHIBIT B attached hereto, as the same may be amended or modified
from time to time.
(N) GROUP TWO ACQUISITION FACILITY LEASES: The Acquisition
Facility Leases to be entered into in the future in connection with the Group
Two Acquisition Facilities, as the same may be modified and amended from time
to time.
(O) GROUP TWO ACQUISITION GROUP: The ALS Parties which are
parties to the Group Two Acquisition Transaction Documents (other than this
Agreement).
(P) GROUP TWO ACQUISITION TRANSACTION DOCUMENTS: The documents
hereafter entered into by and between ALS Parties and Meditrust Parties in
connection with the Group Two Acquisition Facilities, as the same may be
modified and amended from time to time, including, without limitation, the
Group Two Acquisition Facility Leases and the "Lease Documents" referenced
therein.
(Q) MEDITRUST PARTIES: Meditrust and its Affiliates.
(R) MEDITRUST/ALS FACILITIES: The facilities described on EXHIBIT
C attached hereto, as the same may be amended or modified from time to time.
(S) MEDITRUST/ALS TRANSACTION DOCUMENTS: The documents now or
hereafter entered into by and between ALS Parties and Meditrust Parties in
connection with any transaction now or hereafter consummated between such
parties regarding the Meditrust/ALS Facilities, as the same may be amended or
modified from time to time.
(T) ORIGINAL MEDITRUST INVESTMENT: The Meditrust Investment paid
by a Meditrust Party pursuant to an Acquisition Facility Lease at the time of
Closing (as such term is defined in the applicable Acquisition Facility Lease).
(U) PERSON: Any individual, corporation, general partnership,
limited partnership, joint venture, limited liability company, stock company or
association, company, bank, trust, trust
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company, land trust, business trust, unincorporated organization,
unincorporated association, Governmental Authority or other entity of any kind
or nature.
(V) RENT COVERAGE RATIO: As defined in the applicable Acquisition
Facility Lease.
(W) TERM: As defined in the applicable Acquisition Facility
Lease.
2. PROVISIONS OF AGREEMENT PARAMOUNT. In the event and to the
extent any provision of a Meditrust/ALS Transaction Document is inconsistent or
in conflict with a provision of this Agreement, the provision of this Agreement
shall be considered paramount.
3. EXTENSION OPTION RIGHTS. No member of the Group One
Acquisition Group shall exercise the extension option right provided in Section
1.3 of a Group One Acquisition Facility Lease, unless each and every other
member of the Group One Acquisition Group shall have the right to exercise, and
shall have in fact duly exercised, the same right under each Group One
Acquisition Facility Lease. No member of the Group Two Acquisition Group shall
exercise the extension option right provided in Section 1.3 of a Group Two
Acquisition Facility Lease, unless each and every other member of the Group Two
Acquisition Group shall have the right to exercise, and shall have in fact duly
exercised, the same right under each Group Two Acquisition Facility Lease.
4. LEASE MODIFICATION AND AMENDMENT. None of the terms or
provisions of any Group One Acquisition Facility Lease or of any of the "Lease
Documents" referenced therein shall be modified or amended unless each and
every other Group One Acquisition Facility Lease and/or each and every other
corresponding "Lease Document" referenced therein, as applicable, shall be
modified or amended in a similar manner except to the extent any such
modification or amendment pertains only to the real estate comprising a part of
the Group One Acquisition Facility in which case a modification or amendment of
every other such Group One Acquisition Facility Lease shall not be required.
None of the terms or provisions of any Group Two Acquisition Facility Lease or
of any of the "Lease Documents" referenced therein shall be modified or
amended, unless each and every other Group Two Acquisition Facility Lease
and/or each and every other corresponding "Lease Document" referenced therein,
as applicable, shall be modified or amended in a similar manner except to the
extent any such modification or amendment pertains only to the real estate
comprising a part of the Group Two Acquisition Facility in which case a
modification or amendment of every other such Group Two Acquisition Facility
Lease shall not be required.
5. CROSS-DEFAULT. The ALS Parties covenant and agree that an
Event of Default (as defined in each applicable Meditrust/ALS Transaction
Document) on the part of an ALS Party under any Meditrust/ALS Transaction
Document which remains uncured beyond applicable grace periods contained in
such Meditrust/ALS Transaction Document shall be deemed an Event of Default
under all other Meditrust/ALS Transaction Documents without the benefit of any
notice or grace periods contained in such other Meditrust/ALS Transaction
Documents and without regard to whether such other Meditrust/ALS Transaction
Documents relate to the same Meditrust/ALS Facility and each Meditrust Party
shall have the benefit of any and all of the rights and remedies granted by any
of the Meditrust/ALS Transaction Documents in the event of a default thereunder
in connection with such an Event of Default.
6. RENT COVERAGE RATIO. The ALS Parties covenant and agree that,
throughout the Term and as long as the Lessee is in possession of any
Acquisition Facility in a particular
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Acquisition Group, (a) the Group One Acquisition Facilities shall achieve an
aggregate Rent Coverage Ratio equal to or greater than 1.2 to 1 for each Fiscal
Year and (b) the Group Two Acquisition Facilities shall achieve an aggregate
Rent Coverage Ratio equal to or greater than 1.2 to 1 for each Fiscal Year.
Within ninety (90) days after the end of each Fiscal Year, the Lessee shall
furnish to the Lessor an express written calculation showing the compliance or
non- compliance, as the case may be, with the aforementioned Rent Coverage
Ratio in substantially the same form as the schedule attached as EXHIBIT D.
7. CASH COLLATERAL REDUCTION. If, after the third (3rd)
anniversary of the Commencement Date of the first Acquisition Facility Lease to
go into effect in a particular Acquisition Group, the Acquisition Facilities
constituting such Acquisition Group achieve an aggregate Rent Coverage Ratio of
not less than 1.3 to 1 for four (4) consecutive Fiscal Quarters, and provided
that no Event of Default, or fact or circumstance which with the passage of
time or giving of notice or both would constitute an Event of Default, exists
hereunder or under any of the Meditrust/ALS Transaction Documents, the Cash
Collateral (as defined in the applicable Acquisition Facility Leases) under
each such Acquisition Facility Lease in such Acquisition Group shall be
returned by the applicable Meditrust Party to the applicable ALS Party.
Notwithstanding the foregoing, if at any time and from time to time during the
Terms of the applicable Acquisition Facility Leases and after the return of the
Cash Collateral (pursuant to the conditions set forth in the preceding
sentence), the aggregate Rent Coverage Ratio of the Facilities constituting an
Acquisition Group shall be less than 1.3 to 1 for any one (1) Fiscal Quarter,
the applicable ALS Party shall deliver to the applicable Meditrust Party,
within thirty (30) days after the expiration of such Fiscal Quarter, cash in an
amount which equals the Stated Amount to be held by the applicable Meditrust
Party as Cash Collateral under the applicable Acquisition Facility Leases in
the applicable Acquisition Group. Upon the replenishment of the Cash Collateral
in the Stated Amount as described in the preceding sentence, and
notwithstanding any subsequent achievement of an aggregate Rent Coverage Ratio
of not less than 1.3 to 1 for four (4) consecutive Fiscal Quarters, the Cash
Collateral shall not be subject to further return. The applicable ALS Party
shall pay all costs and expenses incurred by the applicable Meditrust Parties
in connection with any return and/or replenishment in the amount of the Cash
Collateral, pursuant to the terms of this Section 7.
8. AMENDMENTS. The ALS Parties and the Meditrust Parties
anticipate that some or all of them will engage in financing or lease
transactions in the future ("Future Related Transactions"). The ALS Parties
and the Meditrust Parties acknowledge and agree that the parties to the Future
Related Transactions are to become parties to this Agreement and the documents
and facilities which relate to the Future Related Transactions shall be treated
as Group One Acquisition Transaction Documents, Group Two Acquisition
Transaction Documents and/or Meditrust/ALS Transaction Documents, as the case
may be, and as Group One Acquisition Facilities, Group Two Acquisition
Facilities and/or Meditrust/ALS Facilities, as the case may be. From time to
time upon the occurrence of a Future Related Transaction, the ALS Parties and
the Meditrust Parties agree that they shall enter into amendments of this
Agreement and the exhibits hereto which will reflect the foregoing.
9. NOTICE. 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 when
so
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personally delivered, three (3) business days following the date postmarked or
the next business day when placed in the possession of such mail delivery
service and addressed as follows:
If to the
ALS Parties: c/o Alternative Living Services, Inc.
450 North Sunnyslope Road, Suite 300
Brookfield, WI 53005
Attn: William F. Lasky, President
With a copy to: Rogers & Hardin
Peachtree Center
229 Peachtree Street, N.E., 2700 International Tower
Atlanta, GA 30303
Attn: Miriam J. Dent, Esq.
If to the
Meditrust Parties: c/o Meditrust Mortgage Investments, Inc.
197 First Avenue
Needham Heights, Massachusetts 02194
Attn: President
With copies to: Meditrust Mortgage Investments Inc.
197 First Avenue
Needham Heights, Massachusetts 02194
Attn: General Counsel
and Choate, Hall & Stewart
Exchange Place
53 State Street
Boston, MA 02109
Attn: Frank Giso III, Esq.
or such other address as the ALS Parties or the Meditrust Parties shall
hereinafter from time to time designate by a written notice to the others given
in such manner. Any notice given to any of the ALS Parties by any of the
Meditrust Parties at any time shall not imply that such notice or any further
or similar notice was or is required.
10. GOVERNING LAW. This Agreement shall in all respects be
construed and interpreted in accordance with and governed by the laws of the
Commonwealth of Massachusetts.
Each of the parties constituting the ALS Parties hereby consents to
personal jurisdiction in 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 or any of the other
Meditrust/ALS Transaction Documents and expressly waives any and all objections
such party may have as to venue in any of such courts.
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11. GENERAL PROVISIONS. The provisions set forth in Article 23
and Sections 2.2, 16.8, 16.9, 16.10, 24.3 through 24.10, inclusive, and 24.12
of the respective Acquisition Facility Leases are hereby incorporated herein by
reference, mutatis, mutandis and shall be applicable to this Agreement as if
set forth herein in full.
The ALS Parties waive all presentments, demands for performance,
notices of nonperformance, protests, notices of protest, notices of dishonor,
and notices of acceptance and waives all notices of the existence, creation, or
incurring of new or additional obligations, except as to all of the foregoing
as expressly provided for herein or in the Meditrust/ALS Documents.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have executed this Agreement under
seal as of the day and year above written.
WITNESSES: LESSEE:
ALS LEASING, INC.
By:
- -------------------------- ---------------------------------
Name: Thomas E. Komula, Vice President
- --------------------------
Name:
****
WITNESSES: MEDITRUST:
MEDITRUST ACQUISITION CORPORATION III
By:
- -------------------------- ---------------------------------
Name: Name:
Title:
- --------------------------
Name:
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JOINDER AND CONSENT
Alternative Living Services, Inc., being a guarantor of the various
obligations of ALS Leasing, Inc. under guaranties delivered to the Meditrust
Parties in connection with the Meditrust/ALS Transaction Documents, hereby (A)
joins in this Agreement and consents to the provisions hereof, (B) except as
required in the Lease Documents, waives protest, notice of nonpayment, notice
of dishonor, protest of any dishonor, suretyship defenses, notice of protest
and protest of this Agreement and all other notices in connection with (I) the
delivery or the acceptance of this Agreement and any amendment hereto and any
reliance thereon and/or (II) the performance, default or enforcement of any
obligation under this Agreement, (C) waives notice of, or any right to consent
to, any modification or amendment of this Agreement and (D) agrees that this
joinder and consent shall be deemed to be a joinder and consent to this
Agreement as the same may be modified and amended from time to time.
EXECUTED under seal as of December 30, 1996.
WITNESS: ALTERNATIVE LIVING SERVICE, INC.
By:
- -------------------------- ----------------------------------
Name: Thomas E. Komula, Senior Vice
President
- --------------------------
Name:
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EXHIBIT A
GROUP ONE ACQUISITION FACILITIES
1. WovenHearts of Brown Deer
4015 W. Woodale Avenue
Brown Deer, Milwaukee County, WI 53209
2. WovenHearts of Sussex
W240 N6351 Maple Avenue
Sussex, Waukesha County, WI 53089
3. Clare Bridge of Fort Myers
13565 American Colony Boulevard
Fort Myers, Lee County, FL 33912
4. Clare Bridge of Tampa
1513 W. Fletcher Avenue
Tampa, Hillsborough County, FL 33612-3315
5. Hamilton House of Farmington Hills I
27950 Drake Road
Farmington Hills, Oakland County, MI 48331
6. Hamilton House of Farmington Hills II
27900 Drake Road
Farmington Hills, Oakland County, MI 48331
7. Hamilton House of Ann Arbor
750 W. Eisenhower Parkway
Ann Arbor, Washtenaw County, MI 48103
8. Hamilton House of Utica
45959 North Pointe Boulevard
Utica, Macomb County, MI 48315
9. WovenHearts of Onalaska
949 10th Avenue North
Onalaska, La Crosse County, WI 54650
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10. Northampton Manor
65 Newtown Richboro Road
Richboro, Bucks County, PA 18954
11. Clare Bridge of Lower Makefield
600 Township Line Road
Yardley, Bucks County, PA 19067
12. Clare Bridge of Montgomery
1089 Horsham Road
North Wales, Montgomery County, PA 19454
[TO BE SUPPLEMENTED BY AMENDMENTS TO THIS AGREEMENT]
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EXHIBIT B
GROUP TWO ACQUISITION FACILITIES
NONE AT PRESENT
[TO BE SUPPLEMENTED BY AMENDMENTS TO THIS AGREEMENT]
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EXHIBIT C
MEDITRUST/ALS FACILITIES
1. Group One Acquisition Facilities
2. Group Two Acquisition Facilities
[TO BE SUPPLEMENTED BY AMENDMENTS TO THIS AGREEMENT]
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EXHIBIT D
RENT COVERAGE RATIO CALCULATION
[TO BE SUPPLEMENTED BY AMENDMENTS TO THIS AGREEMENT]
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