Case 24-90213 Document 1712 Filed in TXSB on 07/26/24 Page 1 of 18

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION

§
In re: § Chapter 11
§
STEWARD HEALTH CARE SYSTEM § Case No. 24-90213 (CML)
LLC, et al., §
§ (Jointly Administered)
1
Debtors. §
§

EMERGENCY MOTION OF
DEBTORS FOR ORDER (I) AUTHORIZING
REJECTION OF MASTER LEASE II AGREEMENTS
EFFECTIVE AS OF THE REJECTION DATE IN CONNECTION
WITH PLANNED TRANSITION AND SALE OF MASSACHUSETTS
HOSPITALS TO NEW OPERATORS, AND (II) GRANTING RELATED RELIEF

EMERGENCY RELIEF HAS BEEN REQUESTED. RELIEF IS REQUESTED NOT

LATER THAN 1:00 P.M. (CENTRAL TIME) ON JULY 31, 2024.

IF YOU OBJECT TO THE RELIEF REQUESTED OR YOU BELIEVE THAT

EMERGENCY CONSIDERATION IS NOT WARRANTED, YOU MUST APPEAR AT
THE HEARING IF ONE IS SET, OR FILE A WRITTEN RESPONSE PRIOR TO THE
DATE THAT RELIEF IS REQUESTED IN THE PRECEDING PARAGRAPH.
OTHERWISE, THE COURT MAY TREAT THE PLEADING AS UNOPPOSED AND
GRANT THE RELIEF REQUESTED.

A HEARING WILL BE CONDUCTED ON THIS MATTER ON JULY 31, 2024 AT 1:00

P.M. (CENTRAL TIME) IN COURTROOM 401, 4TH FLOOR, 515 RUSK AVENUE,
HOUSTON, TX 77002.

YOU MAY PARTICIPATE IN THE HEARING EITHER IN PERSON OR BY AN

AUDIO AND VIDEO CONNECTION.

AUDIO COMMUNICATION WILL BE BY USE OF THE COURT’S DIAL-IN

FACILITY. YOU MAY ACCESS THE FACILITY AT 832-917-1510. ONCE
CONNECTED, YOU WILL BE ASKED TO ENTER THE CONFERENCE ROOM
NUMBER. JUDGE LOPEZ’S CONFERENCE ROOM NUMBER IS 590153. VIDEO
COMMUNICATION WILL BE BY USE OF THE GOTOMEETING PLATFORM.
CONNECT VIA THE FREE GOTOMEETING APPLICATION OR CLICK THE LINK
ON JUDGE LOPEZ’S HOME PAGE. THE MEETING CODE IS “JUDGELOPEZ.”
CLICK THE SETTINGS ICON IN THE UPPER RIGHT CORNER AND ENTER YOUR
NAME UNDER THE PERSONAL INFORMATION SETTING.

1
A complete list of the Debtors in these chapter 11 cases may be obtained on the website of the Debtors’ claims
and noticing agent at https://restructuring.ra.kroll.com/Steward. The Debtors’ service address for these chapter
11 cases is 1900 N. Pearl Street, Suite 2400, Dallas, Texas 75201.
 Case 24-90213 Document 1712 Filed in TXSB on 07/26/24 Page 2 of 18

HEARING APPEARANCES MUST BE MADE ELECTRONICALLY IN ADVANCE OF

BOTH ELECTRONIC AND IN-PERSON HEARINGS. TO MAKE YOUR
APPEARANCE, CLICK THE “ELECTRONIC APPEARANCE” LINK ON JUDGE
LOPEZ’S HOME PAGE. SELECT THE CASE NAME, COMPLETE THE REQUIRED
FIELDS AND CLICK “SUBMIT” TO COMPLETE YOUR APPEARANCE.

Steward Health Care System LLC and its debtor affiliates, as debtors and debtors

in possession in the above-captioned chapter 11 cases (collectively, the “Debtors”) respectfully

represent as follows in support of this motion (the “Motion”):

Preliminary Statement

1. The Debtors are pleased to report that, in connection with their robust

marketing process to sell their hospital operations in Massachusetts, they (a) have received binding

bids from high-quality local operators to acquire six (6) of their Massachusetts hospitals, and

(b) are finalizing a commitment from the Commonwealth of Massachusetts

(the “Commonwealth”) to provide $30 million in funding to support the hospitals’ operations as

they are sold and transitioned to new operators in the near-term.

2. Since the outset of these chapter 11 cases, the Debtors have remained

steadfast in achieving their goal of doing everything within their power to keep each of their

thirty-one (31) hospitals open. To that end, the Debtors commenced these chapter 11 cases to raise

debtor-in-possession financing to allow them to continue to provide high quality care to their

patients, complete their prepetition sale process, and sell their hospitals to new operators that can

continue to serve the Debtors’ patients and communities.

3. Notably, as part of the Debtors’ sale efforts, there has been a comprehensive

process to market the Debtors’ hospital operations in the Commonwealth of Massachusetts

(the “Massachusetts Hospitals”), all of which operate on properties that are leased from a joint

venture (the “MPT-Macquarie JV”) owned by Medical Properties Trust, Inc. (“MPT”) and

Macquarie Group (“Macquarie”) under that certain Master Lease Agreement (Master Lease II),
2
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dated as of March 14, 2022 (as amended, restated, or modified from time to time, “Master Lease

II”).

4. In January 2024, Cain Brothers began marketing the Debtors’ hospitals in

Southern Massachusetts, and in February 2024, Leerink Partners began marketing the Debtors’

hospitals in Northern Massachusetts. The marketing of the Massachusetts Hospitals has continued

since the Petition Date pursuant to the Debtors’ Bidding Procedures.2

5. The Debtors have lost nearly $100 million operating the Massachusetts

Hospitals in just the first five (5) months of this calendar year. The Debtors, and by extension their

lenders, have been funding these operating losses year to date. But the Debtors have zero ability

to use cash collateral or DIP Financing for funding losses moving forward and have no approved

budget to fund these losses—a key fact that all parties are painfully aware. Yet despite the fact

that the Massachusetts Hospitals generate significant operating losses (including on account of the

$114 million annual rent obligations payable to the MPT-Macquarie JV under Master Lease II),3

through their extensive marketing efforts, and facilitated by promises of financial support from the

Commonwealth,4 the Debtors have obtained binding bids from reputable buyers to acquire six (6)

2
“Bidding Procedures” means Court-approved bidding procedures pursuant to the Order (I) Approving
(A) Global Bidding Procedures for Sales of the Debtor’s Assets, (B) Form and Manner of Notice of Sales,
Auctions, and Sale Hearings, and (C) Assumption and Assignment Procedures and Form and Manner of Notice
of Assumption and Assignment; (II) Authorizing Designation of Stalking Horse Bidders; (III) Scheduling Auctions
and Sale Hearings; and (IV) Granting Related Relief (Docket No. 626).
3
The extent of the Debtors operating losses at the Massachusetts Hospitals are described in the Emergency Motion
of Debtors for Entry of An Order (I) Approving (A) Funding From the Commonwealth of Massachusetts for the
Planned Transition and Sale of Massachusetts Hospitals, (B) the Closure of Carney Hospital and Nashoba Valley
Medical Center, and (C) Procedures Related to Facility Closures; and (II) Granting Related Relief, filed
contemporaneously herewith (the “Hospital Funding and Facility Closure Motion”).
4
In addition to the $30 million of transition payments contemplated by the Hospital Funding and Facility Closure
Motion, the Debtors understand that the Commonwealth has offered certain bidders financial support to assume
responsibility for operating certain of the Massachusetts Hospitals, providing the opportunity for the Debtors to
transition such hospitals to a new operator, save thousands of jobs, and continue the provision of health care by
such hospitals in the communities they serve.

3
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out of the eight (8) Massachusetts Hospitals.5 The Debtors plan to work expeditiously with the

bidders to finalize the sale and transition of such hospitals without impacting patient care.

6. With support promised from the Commonwealth, the Debtors are also

working to facilitate the sale or lease to bidders of the underlying real property leased by the

Debtors under Master Lease II. Under the Debtors’ Bidding Procedures, bidders were required to

indicate the proposed treatment of the MPT-Macquarie JV’s real property and proposed terms of

an agreement with the MPT-Macquarie JV, including whether the bidder intends to lease or

purchase the underlying real property.

7. With respect to the Massachusetts Hospitals, the Debtors did not receive

any bids that provide for a bidder to assume Master Lease II or acquire the underlying real estate

at a value that exceeds the “lease base” under Master Lease II for such hospital. Rather, the bids

received contemplate a purchase price for the total hospital enterprise (i.e., inclusive of real estate

and operations) that are significantly less than the value of the real estate implied by the rent

obligations and the lease base under Master Lease II.67

8. Therefore, there is no scenario in which a buyer of the Massachusetts

Hospitals will assume Master Lease II or the rent obligations thereunder. Accordingly, the Debtors

have filed this Motion to reject Master Lease II, relieve themselves of the burden of continuing to

5
The only exceptions are that no actionable bids have been received for Carney Hospital and Nashoba Valley
Medical Center, and the Debtors are seeking court authority to close such hospitals (the “Closing Massachusetts
Hospitals”) pursuant to the Hospital Funding and Facility Closure Motion.
6
Because the Master Lease II rents were negotiated and agreed to in a different market environment with different
capitalization rates, and are higher than current market rates, every bidder for the Massachusetts Hospitals asked
the MPT-Macquarie JV for significant rent concessions or to acquire the underlying real property at a significant
discount to the MPT-Macquarie JV’s lease base.
7
Because MPT’s and Macquarie’s investment in such real estate is substantially impaired, the Debtors have asked
MPT and Macquarie to agree to certain concessions to allow the Debtors to transition the Massachusetts Hospitals
to new operators. The Debtors have allowed for substantial engagement with the bidders to facilitate a transition,
but have been stymied by MPT and Macquarie seeking to extract concessions to facilitate a consensual transition
to date.

4
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incur financial obligations to the MPT-Macquarie JV, and focus on a safe and expedited transition

of the Massachusetts Hospitals to new operators with the financial support of the Commonwealth.

The rejection of Master Lease II is supported by the Commonwealth, the official committee of

unsecured creditors (the “Creditors’ Committee”) and the Debtors’ secured lenders.

9. For the avoidance of doubt, the proposed rejection of Master Lease II is

intended to facilitate the sale and transition of the Massachusetts Hospitals to new operators (other

than with respect to Carney Hospital and Nashoba Valley Medical Center, which the Debtors are

seeking approval to close, as there were no actionable bids on such properties that the

Commonwealth was willing to commit to support).

10. Contemporaneously with seeking the relief requested herein, the Debtors

are actively engaged in discussions with bidders regarding the sale of the Debtors’ operating assets,

including, among other things, licenses, furniture, fixtures, equipment, inventory, and other

personal property. As noted above, the bids for the Massachusetts Hospitals contemplate a total

enterprise value for the operations of the Massachusetts Hospitals and the real property owned by

the MPT-Macquarie JV (which is worth significantly less than the lease base under Master

Lease II). Although value allocation between real estate and operations is subject to ongoing

mediation with MPT, Macquarie, and the other mediation parties, if unable to reach a resolution,

the Debtors intend to ask the Court to decide how much value is allocable to the Debtors’ assets

and operations as compared to the underlying real estate.

Background

11. On May 6, 2024, (the “Petition Date”), the Debtors each commenced with

this Court a voluntary case under chapter 11 of title 11 of the United States Code (the “Bankruptcy

Code”) in the United States Bankruptcy Court for the Southern District of Texas (the “Court”).

5
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The Debtors are authorized to continue to operate their business and manage their properties as

debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code.

12. On May 16, 2024, the U.S. Trustee for Region 7 appointed the Creditors’

Committee. No trustee or examiner has been appointed in these chapter 11 cases.

13. The Debtors’ chapter 11 cases are being jointly administered for procedural

purposes only pursuant to Rule 1015(b) of the Federal Rules of Bankruptcy Procedure

(the “Bankruptcy Rules”) and Rule 1015-1 of the Bankruptcy Local Rules for the United States

Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Local Rules”).

14. The Debtors own and operate the largest private physician-owned for-profit

healthcare network in the United States. Headquartered in Dallas, Texas, the Debtors’ operations

include 31 hospitals across eight states, approximately 400 facility locations, 4,500 primary and

specialty care physicians, 3,600 staffed beds, and a company-wide workforce of nearly 30,000

employees. The Debtors provide care to more than two million patients annually.

15. Additional information regarding the Debtors’ business, capital structure,

and the circumstances leading to the commencement of these chapter 11 cases is set forth in the

Declaration of John R. Castellano in Support of Debtors’ Chapter 11 Petitions and First-Day

Pleadings (Docket No. 38) (the “First Day Declaration”), filed on the Petition Date.8

Jurisdiction

16. This Court has jurisdiction to consider this matter pursuant to 28 U.S.C.

§ 1334. This is a core proceeding pursuant to 28 U.S.C. § 157(b). Venue is proper before this

Court pursuant to 28 U.S.C. §§ 1408 and 1409.

8
Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the
First Day Declaration.

6
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Relief Requested

17. Pursuant to sections 365(a) and 105(a) of the Bankruptcy Code and

Bankruptcy Rules 6004 and 6006, the Debtors request (i) authority to reject Master Lease II

Agreements (as defined below), effective as of the date hereof (the “Rejection Date”) and

(ii) related relief.

18. A proposed form of order granting the relief requested herein is annexed

hereto as Exhibit A (the “Proposed Order”).

19. In support of this Motion, the Debtors submit the following declarations:

i. Declaration of John R. Castellano in Support of Emergency Motions

of Debtors for Entry of Orders (I) Approving (A) Funding From the
Commonwealth of Massachusetts for the Planned Transition and
Sale of Massachusetts Hospitals, (B) the Closure of Carney Hospital
and Nashoba Valley Medical Center, and (C) Procedures Related
to Facility Closures; and (II) Authorizing Rejection of Master Lease
II Agreements in Connection with Planned Transition and Sale of
Massachusetts Hospitals to New Operators (the “Castellano
Declaration”), filed contemporaneously herewith;

ii. Declaration of Toby King in Support of Emergency Motions of

Debtors for Entry of Orders (I) Approving (A) Funding From the
Commonwealth of Massachusetts for the Planned Transition and
Sale of Massachusetts Hospitals, (B) the Closure of Carney Hospital
and Nashoba Valley Medical Center, and (C) Procedures Related
to Facility Closures; and (II) Authorizing Rejection of Master Lease
II Agreements in Connection with Planned Transition and Sale of
Massachusetts Hospitals to New Operators (the “King
Declaration”), filed contemporaneously herewith; and

iii. Declaration of James Moloney in Support of Emergency Motions of

Debtors for Entry of Orders (I) Approving (A) Funding From the
Commonwealth of Massachusetts for the Planned Transition and
Sale of Massachusetts Hospitals, (B) the Closure of Carney Hospital
and Nashoba Valley Medical Center, and (C) Procedures Related
to Facility Closures; and (II) Authorizing Rejection of Master Lease
II Agreements in Connection with Planned Transition and Sale of
Massachusetts Hospitals to New Operators (the “Moloney
Declaration”), filed contemporaneously herewith.

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Master Lease II Agreements Terms

20. By this Motion, the Debtors seek to reject the Master Lease II Agreements,9

each effective as of the Rejection Date. The key terms of Master Lease II are set forth below:10

Certain affiliates of Steward Health Care System LLC (“Lessees”)

Parties
Certain affiliates of MPT Operating Partnership, L.P. (“Lessor”)

Steward Health Care System LLC guarantees all of the obligations of each lessee
Lease Guaranty
under Master Lease II.

Commencement
March 14, 2022 (the “Initial Commencement Date”).
Date

Commencing on the Initial Commencement Date and ending at midnight on

Fixed Term
October 31, 2041 (the “Fixed Term”).

One (1) 5-year extension option available on the same terms and conditions set
Extension Term
forth in Master Lease II.

Base Rent The current annual base rent payable under Master Lease II is approximately
Obligations $114 million

See Master Lease II, Schedule 3.1(a) for the lease base for each leased property
Lease Base
as of the Initial Commencement Date.

Current Lease
9.29%
Rate

On each January 1 during the term (each an “Adjustment Date”), the

Applicable Lease Rate shall be increased and shall be equal to the sum of (a) the
previous Applicable Lease Rate and (b) the percentage by which the Consumer
Annual
Price Index (“CPI”) published for the month of October prior to the applicable
Inflation-Based
adjustment date shall have increased over the CPI figure published for the month
Rent Escalation
of October prior to the previous Adjustment Date; provided, however, that the
percentage CPI increase used for the escalator shall in no event be less than 2.0%
or greater than 5.0%.

Upon expiration of the Fixed Term, so long as no Event of Default has occurred
Right of First
and is continuing, Lessee shall have a first refusal option to purchase the leased
Refusal
property.

9
The term “Master Lease II Agreements” used herein refers collectively to Master Lease II and the Master Lease II
Ancillary Agreements set forth on the Schedule 1 annexed to the Proposed Order.
10
The table below is intended only to provide a summary of material terms of Master Lease II. Complete terms can
be found in Master Lease II.

8
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Master Lease I and Master Lease II cross-default. An “Event of Default” under

Master Lease II includes a “Major Event of Default” as defined in Master Lease
Cross-Defaults
I or the Mortgage Loan Agreement (as defined in Master Lease II) and any
“Event of Default” under and as defined in Master Lease I.

Creditors’ Committee’s Challenge Rights

21. Pursuant to the Final Order (I) Authorizing the Debtors to (A) Obtain Junior

Lien Postpetition Financing, (B) Use Cash Collateral, and (C) Grant Liens and Provide

Superpriority Administrative Expense Claims; (II) Granting Adequate Protection to Certain

Prepetition Secured Parties; (III) Modifying The Automatic Stay; and (IV) Granting Related Relief

(Docket No. 625) (the “Final MPT DIP Order”) and the Final Order (I) Authorizing the Debtors

to (A) Obtain New Postpetition Financing, (B) Use Cash Collateral, and (C) Grant Liens and

Provide Superpriority Administrative Expense Claims; (II) Granting Adequate Protection to

Certain Prepetition Secured Parties; (III) Modifying the Automatic Stay; and (IV) Granting

Related Relief (Docket No. 1538) (the “Final FILO DIP Order” and together with the Final MPT

DIP Order, the “Final DIP Orders”), the Creditors’ Committee has the right, among other things,

to object or challenge the amount, validity, perfection, enforceability, priority or extent of MPT’s

prepetition obligations and the Master Leases themselves. The Creditors’ Committee’s rights to

Challenge the Master Leases therefore includes, without limitation, the Creditors’ Committee’s

right to seek recharacterization of the Master Leases as disguised financings. Therefore,

notwithstanding the Debtors’ rejection of Master Lease II, the Creditors’ Committee’s Challenge

rights are preserved.11

11
Moreover, the Creditors’ Committee has indicated to the Debtors that it would object to any rejection of Master
Lease II that does not preserve the Creditors’ Committee’s Challenge rights.

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Relief Requested Should be Granted

I. Rejection of Master Lease II Agreements Is a Sound Exercise of the Debtors’

Reasonable Business Judgment

22. Section 365(a) of the Bankruptcy Code provides, in pertinent part, that a

debtor in possession “subject to the court’s approval, may assume or reject any executory contract

or unexpired lease of the debtor.” 11 U.S.C. § 365(a); see also N.L.R.B. v. Bildisco & Bildisco,

465 U.S. 513, 521 (1984). “This provision allows a trustee to relieve the bankruptcy estate of

burdensome agreements which have not been completely performed.” Stewart Title Guar. Co. v.

Old Republic Nat’l Title Ins. Co., 83 F.3d 735, 741 (5th Cir. 1996) (citing In re Murexco

Petroleum, Inc., 15 F.3d 60, 62 (5th Cir. 1994)); see also In re Exide Techs., 607 F.3d 957, 967

(3d Cir. 2010) (“Courts may use § 365 to free a [debtor] from burdensome duties that hinder its

reorganization.”).

23. Bankruptcy courts apply the “business judgment” standard to determine

whether to authorize the rejection of an executory contract or unexpired lease. See Matter of J.C.

Penney Direct Mktg. Servs., L.L.C., 50 F.4th 532, 534 (5th Cir. 2022) (“A bankruptcy court

reviews a debtor’s decision to . . . reject an executory contract under the deferential ‘business

judgment’ standard.”) (citing Mission Prod. Holdings, Inc. v. Tempnology, LLC, 587 U.S. 370,

372 (2019)); see also In re Mirant Corp., 378 F.3d 511, 524 n.5 (5th Cir. 2004) (“The rejection

decision under § 365 is generally left to the business judgment of the bankruptcy estate.”);

Richmond Leasing Co. v. Cap. Bank, N.A., 762 F.2d 1303, 1309 (5th Cir. 1985) (“It is well

established that ‘the question whether a lease should be rejected . . . is one of business judgment.’”)

(quoting Grp. of Institutional Invs. v. Chi., Milwaukee, St. Paul & Pac. R.R. Co., 318 U.S. 523,

550 (1943)); In re Senior Care Ctrs., LLC, 607 B.R. 580, 587 (Bankr. N.D. Tex. 2019) (“A court

evaluates whether a lease should be assumed or rejected employing the business judgment

standard.”); In re N. Am. Techs. Grp., Inc., 2010 Bankr. LEXIS 5834, at *15 (Bankr. E.D. Tex.
10
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Aug. 16, 2010) (“[T]he Fifth Circuit has adopted, and subsequently affirmed, the Supreme Court's

rule that a court should defer to the Debtors' business judgment when considering a motion to

reject an executory contract or unexpired lease.”).

24. The “business judgment” standard requires only a showing that either

assumption or rejection of the executory contract or unexpired lease will benefit the debtor’s estate.

See In re Idearc Inc., 423 B.R. 138, 162 (Bankr. N.D. Tex. 2009) (stating that the business

judgment standard only “requires a showing that the proposed course of action will be

advantageous to the estate.” (citation omitted)); see also J.C. Penney Direct Mktg. Servs., 50 F.4th

at 533 (5th Cir. 2022) (affirming the bankruptcy court’s order, the Fifth Circuit found that “the

decision to reject the lease rested on JCP’s own business judgment regarding the financial benefits

of each option.”). Further, under the business judgment standard, “[a] debtor’s decision . . . to

reject an executory contract must be summarily affirmed unless it is the product of ‘bad faith, or

whim or caprice.’” In re Pilgrim’s Pride Corp., 403 B.R. 413, 422 (Bankr. N.D. Tex. 2009) (citing

Wheeling–Pittsburgh Steel Corp. v. W. Penn Power Co. (In re Wheeling–Pittsburgh Steel Corp.),

72 B.R. 845, 849–50 (Bankr. W.D. Pa. 1987)).

25. As an integral component of the Debtors’ efforts to preserve and maximize

the value of their estates and reduce potential administrative costs in these chapter 11 cases by,

among other things, eliminating approximately $10 million a month in rent payments to the MPT-

Macquarie JV, the Debtors have determined, in their reasonable business judgment, that rejection

of the Master Lease II Agreements is in the best interest of the Debtors’ estates.

26. As set forth herein and in the Castellano Declaration, continuing to lease the

facilities contemplated by Master Lease II expends substantial estate resources with no

corresponding benefit. Master Lease II provides no economic value to the Debtors’ estates. The

Debtors lose tens of millions of dollars a month operating the Massachusetts Hospitals, and each

11
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of the bidders for the Massachusetts Hospitals (excluding the Closing Massachusetts Hospitals)

intend to enter into new leases (or acquire the underlying real property).12 The Debtors’ sale

process has shown that bidders are unwilling to assume the obligation to pay the existing Master

Lease II rent. By contrast, the rejection of the Master Lease II Agreements will result in significant

cost-savings for the Debtors’ estates. Any continued expense in maintaining Master Lease II and

attempt to market such lease in connection with the Debtors’ sale and marketing efforts in

Massachusetts will unnecessarily further deplete assets of the Debtors’ estates, to the detriment of

the Debtors’ creditors. Because the Debtors suffer significant operating losses from the

Massachusetts Hospitals, and the new operators of the Massachusetts Hospitals are not assuming

the underlying leases, Master Lease II no longer provides any benefit to the estates. As such,

rejecting the Master Lease II Agreements is appropriate under the circumstances and reflects the

Debtors’ sound business judgment.

II. Rejection of the Master Lease II Agreements Effective Nunc Pro Tunc Is Appropriate

27. The Debtors respectfully submit that it is appropriate for the Court to deem

the Debtors’ rejection of each of the Master Lease II Agreements effective nunc pro tunc to the

Rejection Date. Under sections 365(a) and 105(a) of the Bankruptcy Code, bankruptcy courts may

grant retroactive rejection of an executory contract or unexpired lease based on a balancing of the

equities of the case. See, e.g., In re Romacorp, Inc., No. 05-86818, 2006 WL 6544088, at *4

(Bankr. N.D. Tex. Feb. 2, 2006) (“This court is not alone in allowing retroactive rejection of

unexpired leases; in fact, a number of other courts around the country have recognized this

equitable practice.”) (collecting cases); In re Cafeteria Operators, L.P., 299 B.R. 384, 394 (Bankr.

N.D. Tex. 2003) (granting retroactive relief for contract rejection where debtors were “receiving

12
Further, the Debtors intend to initiate the closure of the Closing Massachusetts Hospitals as set forth in the
Hospital Funding and Facility Closure Motion

12
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no benefit” from the lease and the contract counterparties “had unequivocal notice of Debtors’

intent to reject prior to the filing of the Motions”); EOP-Colonnade of Dall. Ltd. P’ship v. Faulkner

(In re Stonebridge Techs., Inc.), 430 F.3d 260, 273 (5th Cir. 2005) (“[W]e note that most courts

have held that lease rejection may be retroactively applied”); In re O’Neil Theatres, Inc., 257 B.R.

806, 808 (Bankr. E.D. La. 2000) (granting retroactive relief noting the circumstances favored

granting the relief); In re Amber’s Stores, Inc., 193 B.R. 819, 827 (Bankr. N.D. Tex. 1996) (finding

that “nothing precludes a bankruptcy court, based on the equities of the case, from approving”

retroactive rejection); In re Joseph C. Spiess Co., 145 B.R. 597, 606 (Bankr. N.D. Ill. 1992) (“[A]

trustee’s rejection of a lease should be retroactive to the date that trustee takes affirmative steps to

reject said lease . . . .”); see also Thinking Machs. Corp. v. Mellon Fin. Servs. Corp. (In re Thinking

Machs. Corp.), 67 F.3d 1021, 1028 (1st Cir. 1995) (noting that “bankruptcy courts may enter

retroactive orders of approval, and should do so when the balance of equities preponderates in

favor of such remediation”); Pac. Shores Dev., LLC v. At Home Corp. (In re At Home Corp.),

392 F.3d 1064, 1065-71 (9th Cir. 2004) (affirming bankruptcy court’s approval of retroactive

rejection), cert. denied, 546 U.S. 814 (2005).

28. The balance of equities favors the relief requested herein. The Debtors may

begin to realize cost-savings immediately upon the rejection of the Master Lease II Agreements,

thus preserving significant value for the Debtors’ estates. Specifically, the MPT-Macquarie JV

will not be unduly prejudiced if the rejection is deemed effective nunc pro tunc to the Rejection

Date, as the MPT-Macquarie JV has been given notice of the Debtors’ proposed rejection (and has

been on notice of the potential for rejection for a significant period prior to the filing of this

Motion). Contemporaneously with the filing of this Motion, the Debtors will cause notice of this

Motion to be served on the MPT-Macquarie JV, MPT, Macquarie, and Apollo, and all

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counterparties to the Master Lease II Ancillary Agreements, thereby allowing such parties

sufficient opportunity to respond.

29. Numerous courts have authorized relief similar to the relief requested

herein. See, e.g., In re Akumin Inc., Case No. 23-90827 (CML) (Bankr. S.D. Tex. Nov. 17, 2023)

(Docket No. 203) (authorizing rejection of certain unexpired leases of non-residential real property

nunc pro tunc to the date of the motion); In re Diamond Sports Group, LLC, Case No. 23-90116

(CML) (Bankr. S.D. Tex. July 7, 2023) (Docket No. 945) (authorizing rejection of executory

contracts nunc pro tunc to the date of motion); In re Heritage Power, LLC, Case No. 23-90032

(CML) (Bankr. S.D. Tex. March 2, 2023) (Docket No. 141) (same); In re Serta Simmons Bedding,

LLC, Case No. 23-90020 (DRJ) (Bankr. S.D. Tex. March 27, 2023) (Docket No. 562) (authorizing

rejection of certain unexpired leases nunc pro tunc to the date of the motion); In re Party City

HoldCo Inc., Case No. 23-90005 (DRJ) (Bankr. S.D. Tex. Feb. 14, 2023) (Docket No. 441)

(authorizing rejection of executory contracts nunc pro tunc to the petition date). Similar relief is

also appropriate here.

30. Accordingly, in light of the foregoing facts and circumstances, the Debtors

respectfully request that the Court approve the rejection of the Master Lease II Agreements,

retroactive to the Rejection Date pursuant to sections 365(a) and 105(a) of the Bankruptcy Code

and Rule 6006 of the Bankruptcy Rules in the manner requested herein.

Basis for Emergency Relief

31. The Debtors respectfully request emergency consideration of this Motion in

accordance with Bankruptcy Local Rule 9013-1(i). The relief requested in the Motion is critical

to the Debtors’ ability to preserve value for the Debtors’ estates. Accordingly, the Debtors

respectfully request that the Court approve the relief requested in the Motion on an emergency

basis.

14
 Case 24-90213 Document 1712 Filed in TXSB on 07/26/24 Page 15 of 18

Reservation of Rights

32. Nothing contained herein is intended to be or shall be deemed as (i) an

implication or admission as to the validity of any claim against the Debtors, (ii) a waiver or

limitation of the Debtors’ or any party in interest’s rights to dispute the amount of, basis for, or

validity of any claim, (iii) a waiver of the Debtors’ or any other party in interest’s rights under the

Bankruptcy Code or any other applicable nonbankruptcy law, (iv) a waiver or limitation of the

rights of the Debtors, the Creditors’ Committee or any party in interest to assert, at a later date,

that Master Lease II is not an executory contract or unexpired leases, (v) a concession or evidence

that Master Lease II has not expired, been terminated, or is otherwise currently not in full force

and effect, (vi) a waiver of the obligation of any party in interest to file a proof of claim, (vii) an

agreement or obligation to pay any claims, (viii) a waiver of any claims or causes of action which

may exist against any creditor or interest holder, (ix) an admission as to the validity of any liens

satisfied pursuant to this Motion, (x) an approval, assumption, adoption, or rejection of any

agreement, contract, lease, program, or policy under section 365 of the Bankruptcy Code, (xi) a

waiver of any claims of the Debtors against the MPT-Macquarie JV, the counterparties to the

Master Lease II Ancillary Agreements, or any other contract counterparties, (xii) a waiver of any

of the Creditors’ Committee’s Challenge rights, as set forth in the Final DIP Orders, or (xiii) a

waiver of any rights in respect of allocation of value. Likewise, if the Court grants the relief sought

herein, any payment made pursuant to the Court’s order is not intended to be and should not be

construed as an admission to the validity of any claim or a waiver of the Debtors’ or any other

party in interest’s rights to dispute such claim subsequently.

Debtors’ Compliance with

Bankruptcy Rule 6004(a) and Waiver of Bankruptcy Rule 6004(h)

33. To implement the foregoing successfully, the Debtors request that the Court

find that notice of the Motion is adequate under Bankruptcy Rule 6004(a) under the circumstances,
15
 Case 24-90213 Document 1712 Filed in TXSB on 07/26/24 Page 16 of 18

and waive the 14-day stay of an order authorizing the use, sale, or lease of property under

Bankruptcy Rule 6004(h). As explained above, the relief requested herein is necessary to avoid

immediate and irreparable harm to the Debtors. Accordingly, ample cause exists to justify finding

that the notice requirements under Bankruptcy Rule 6004(a) have been satisfied and to grant a

waiver of the 14-day stay imposed by Bankruptcy Rule 6004(h), to the extent such notice

requirements and such stay apply.

Notice

34. Notice of this Motion will be served on any party entitled to notice pursuant

to Bankruptcy Rule 2002 and any other party entitled to notice pursuant to Bankruptcy Local Rule

9013-1(d).

16
 Case 24-90213 Document 1712 Filed in TXSB on 07/26/24 Page 17 of 18

WHEREFORE the Debtors respectfully request entry of the Proposed Order

granting the relief requested herein and such other and further relief as the Court may deem just

and appropriate.

Dated: July 26, 2024

Houston, Texas

/s/ Clifford W. Carlson

WEIL, GOTSHAL & MANGES LLP
Gabriel A. Morgan (24125891)
Clifford W. Carlson (24090024)
Stephanie N. Morrison (24126930)
700 Louisiana Street, Suite 3700
Houston, Texas 77002
Telephone: (713) 546-5000
Facsimile: (713) 224-9511
Email: Gabriel.Morgan@weil.com
Clifford.Carlson@weil.com
Stephanie.Morrison@weil.com

-and-

WEIL, GOTSHAL & MANGES LLP

Ray C. Schrock (admitted pro hac vice)
Candace M. Arthur (admitted pro hac vice)
David J. Cohen (admitted pro hac vice)
767 Fifth Avenue
New York, New York 10153
Telephone: (212) 310-8000
Facsimile: (212) 310-8007
Email: Ray.Schrock@weil.com
Candace.Arthur@weil.com
DavidJ.Cohen@weil.com

Attorneys for Debtors and Debtors in

Possession

17
 Case 24-90213 Document 1712 Filed in TXSB on 07/26/24 Page 18 of 18

Certificate of Service

I hereby certify that on July 26, 2024, a true and correct copy of the foregoing document was
served by the Electronic Case Filing System for the United States Bankruptcy Court for the
Southern District of Texas.

/s/ Clifford W. Carlson

Clifford W. Carlson

18
 Case 24-90213 Document 1712-1 Filed in TXSB on 07/26/24 Page 1 of 8

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION

§
In re: § Chapter 11
§
STEWARD HEALTH CARE SYSTEM § Case No. 24-90213 (CML)
LLC, et al., §
§ (Jointly Administered)
1
Debtors. §
§

ORDER (I) AUTHORIZING

REJECTION OF MASTER LEASE II AGREEMENTS
EFFECTIVE AS OF THE REJECTION DATE IN CONNECTION
WITH PLANNED TRANSITION AND SALE OF MASSACHUSETTS
HOSPITALS TO NEW OPERATORS, AND (II) GRANTING RELATED RELIEF

Upon the motion, dated July 26, 2024 (the “Motion”)2 of Steward Health Care

System LLC and its debtor affiliates, as debtors and debtors in possession in the above-captioned

chapter 11 cases (collectively, the “Debtors”), for entry of an order pursuant to sections 365(a)

and 105(a) of the Bankruptcy Code and Bankruptcy Rules 6004 and 6006 (i) authorizing the

Debtors to reject the Master Lease II Agreements, effective as of the Rejection Date and

(ii) granting related relief, all as more fully set forth in the Motion; and this Court having

jurisdiction to consider the Motion and the relief requested therein pursuant to 28 U.S.C. § 1334;

and consideration of the Motion and the requested relief being a core proceeding pursuant to 28

U.S.C. § 157(b); and it appearing that venue is proper before this Court pursuant to 28 U.S.C.

§§ 1408 and 1409; and due and proper notice of the Motion having been provided; and such notice

having been adequate and appropriate under the circumstances, and it appearing that no other or

1
A complete list of the Debtors in these chapter 11 cases may be obtained on the website of the Debtors’ claims
and noticing agent at https://restructuring.ra.kroll.com/Steward. The Debtors’ service address for these chapter
11 cases is 1900 N. Pearl Street, Suite 2400, Dallas, Texas 75201.
2
Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the
Motion.
 Case 24-90213 Document 1712-1 Filed in TXSB on 07/26/24 Page 2 of 8

further notice need be provided; and this Court having reviewed the Motion; and upon any hearing

held on the Motion; and all objections, if any, to the relief requested in the Motion having been

withdrawn, resolved, or overruled; and upon consideration of the Castellano Declaration, King

Declaration, and Moloney Declaration; and the Court having determined that the legal and factual

bases set forth in the Motion establish just cause for the relief granted herein; and it appearing that

the relief requested in the Motion is in the best interests of the Debtors, their respective estates,

creditors, and all parties in interest; and upon all of the proceedings had before this Court; and after

due deliberation and sufficient cause appearing therefor,

IT IS HEREBY ORDERED THAT

1. Pursuant to sections 365(a) and 105(a) of the Bankruptcy Code and

Bankruptcy Rules 6004 and 6006, the Master Lease II Agreements set forth on Schedule 1 attached

hereto are deemed rejected effective as of the date of the filing of the Motion (the “Rejection

Date”). Following the Rejection Date, the Debtors shall not be obligated to make any payments

under the Master Lease II Agreements, including any payments pursuant to section 365(d)(3) of

the Bankruptcy Code.

2. Nothing in this Order shall prejudice or diminish the Debtors’ rights under

the Master Lease II Agreements prior to the Rejection Date.

3. Nothing in this Order shall prejudice or diminish the Creditors’

Committee’s rights, including its Challenge rights and the Challenge Period pursuant to the Final

DIP Orders, and all of the Creditors’ Committee’s rights and remedies are expressly preserved.

4. Nothing contained in the Motion or this Order or any payment made

pursuant to the authority granted by this Order is intended to be or shall be deemed as (i) an

implication or admission as to the validity of any claim against the Debtors, (ii) a waiver or

limitation of the Debtors’ or any party in interest’s rights to dispute the amount of, basis for, or
 Case 24-90213 Document 1712-1 Filed in TXSB on 07/26/24 Page 3 of 8

validity of any claim, (iii) a waiver of the Debtors’ or any other party in interest’s rights under the

Bankruptcy Code or any other applicable nonbankruptcy law, (iv) a waiver or limitation of the

Debtors’ right to assert, at a later date, that Master Lease II is not an unexpired lease, (v) a

concession or evidence that the Master Lease II Agreements have not expired, been terminated, or

are otherwise currently not in full force and effect, (vi) a finding or determination with respect to

whether Master Lease II is an unexpired lease; (vii) a waiver of the obligation of any party in

interest to file a proof of claim, (viii) an agreement or obligation to pay any claims, (ix) a waiver

of any claims or causes of action which may exist against any creditor or interest holder, (x) an

admission as to the validity of any liens satisfied pursuant to the Motion, (xi) an approval,

assumption, adoption, or rejection of any agreement, contract, lease, program, or policy under

section 365 of the Bankruptcy Code, (xii) a waiver of any claims of the Debtors against the MPT-

Macquarie JV or any other contract counterparties, (xiii) a waiver of any of the Creditors’

Committee’s Challenge rights, as set forth in the Final DIP Orders, or (xiv) a waiver of any rights

in respect of allocation of value.

5. Notice of the Motion is adequate under Bankruptcy Rule 6004(a) and the

Bankruptcy Local Rules.

6. Notwithstanding the provisions of Bankruptcy Rule 6004(h), this Order

shall be immediately effective and enforceable upon its entry.

7. The Debtors are authorized to take all actions necessary or appropriate to

carry out the relief granted in this Order.

8. This Court shall retain jurisdiction to hear and determine all matters arising

from or related to the implementation, interpretation, or enforcement of this Order.

 Case 24-90213 Document 1712-1 Filed in TXSB on 07/26/24 Page 4 of 8

Dated: ____________, 2024

Houston, Texas

Christopher Lopez
United States Bankruptcy Judge
 Case 24-90213 Document 1712-1 Filed in TXSB on 07/26/24 Page 5 of 8

Schedule 1

Master Lease II Ancillary Agreements

Contract
No. Debtor Contract Description1
Counterparty
Second Amended and Restated Assignment of Rents and Leases
1. MPT of Methuen- Steward Carney Second Amended and Restated Assignment of Rents
Steward, LLC, et Hospital, Inc. and Leases, dated as of March 14, 2022, by and among
al.2 Assignor and Assignee, pursuant to which the original
assignment of rents and leases was amended and
restated to secure payment and performance of the
Obligations.
2. MPT of Methuen- Steward Good Second Amended and Restated Assignment of Rents
Steward, LLC, et Samaritan and Leases, dated as of March 14, 2022, by and among
al. Medical Center, Assignor and Assignee, pursuant to which the original
Inc. assignment of rents and leases was amended and
restated to secure payment and performance of the
Obligations.
3. MPT of Methuen- Steward Holy Second Amended and Restated Assignment of Rents
Steward, LLC, et Family Hospital, and Leases, dated as of March 14, 2022, by and among
al. Inc. Assignor and Assignee, pursuant to which the original
assignment of rents and leases was amended and
restated to secure payment and performance of the
Obligations.

4. MPT of Methuen- Steward Holy Second Amended and Restated Assignment of Rents
Steward, LLC, et Family Hospital, and Leases, dated as of March 14, 2022, by and among
al. Inc. Assignor and Assignee, pursuant to which the original
assignment of rents and leases was amended and
restated to secure payment and performance of the
Obligations.

5. MPT of Methuen- Morton Hospital, Second Amended and Restated Assignment of Rents
Steward, LLC, et A Steward and Leases, dated as of March 14, 2022, by and among
al. Family Hospital, Assignor and Assignee, pursuant to which the original
Inc. assignment of rents and leases was amended and
restated to secure payment and performance of the
Obligations.

6. MPT of Methuen- Steward St. Second Amended and Restated Assignment of Rents
Steward, LLC, et Anne’s Hospital and Leases, dated as of March 14, 2022, by and among
al. Corporation Assignor and Assignee, pursuant to which the original
assignment of rents and leases was amended and
restated to secure payment and performance of the
Obligations.

1
Capitalized terms used but otherwise not defined herein shall have the meanings ascribed to such terms in the
applicable agreement.
2
The contract counterparties for the Master Lease II Ancillary Agreements numbered 1 through 9 include: MPT
of Methuen-Steward, LLC, MPT of Brighton-Steward, LLC, MPT of Fall River-Steward, LLC, MPT of
Brockton-Steward, LLC, MPT of Taunton-Steward, LLC, MPT of Ayer-Steward, LLC, MPT of Haverhill-
Steward, LLC, and MPT of Dorchester-Steward, LLC.
 Case 24-90213 Document 1712-1 Filed in TXSB on 07/26/24 Page 6 of 8

Contract
No. Debtor Contract Description1
Counterparty
7. MPT of Methuen- Steward St. Second Amended and Restated Assignment of Rents
Steward, LLC, et Anne’s Hospital and Leases, dated as of March 14, 2022, by and among
al. Corporation Assignor and Assignee, pursuant to which the original
assignment of rents and leases was amended and
restated to secure payment and performance of the
Obligations.
8. MPT of Methuen- Steward St. Second Amended and Restated Assignment of Rents
Steward, LLC, et Elizabeth’s and Leases, dated as of March 14, 2022, by and among
al. Medical Center Assignor and Assignee, pursuant to which the original
of Boston, Inc. assignment of rents and leases was amended and
restated to secure payment and performance of the
Obligations.
9. MPT of Methuen- Nashoba Valley Second Amended and Restated Assignment of Rents
Steward, LLC, et Medical Center, and Leases, dated as of March 14, 2022, by and among
al. A Steward Assignor and Assignee, pursuant to which the original
Family Hospital, assignment of rents and leases was amended and
Inc. restated to secure payment and performance of the
Obligations.
Memorandum of Master Lease Agreement
10. MPT of Methuen- Steward St. Memorandum of Master Lease Agreement (Carney
Steward, LLC, et Elizabeth’s Hospital), dated as of March 14, 2022, by and among
al. Medical Center Lessor and Lessee, pursuant to which the parties
of Boston, Inc., provided record notice to all third parties of their rights
et al.3 under the Lease.
11. MPT of Methuen- Steward St. Memorandum of Master Lease Agreement (Good
Steward, LLC, et Elizabeth’s Samaritan Medical Center), dated as of March 14,
al. Medical Center 2022, by and among Lessor and Lessee, pursuant to
of Boston, Inc., which the parties provided record notice to all third
et al. parties of their rights under the Lease.
12. MPT of Methuen- Steward St. Memorandum of Master Lease Agreement (Holy
Steward, LLC, et Elizabeth’s Family Hospital-Methuen), dated as of March 14,
al. Medical Center 2022, by and among Lessor and Lessee, pursuant to
of Boston, Inc., which the parties provided record notice to all third
et al. parties of their rights under the Lease.
13. MPT of Methuen- Steward St. Memorandum of Master Lease Agreement (Holy
Steward, LLC, et Elizabeth’s Family Hospital-Haverhill), dated as of March 14,
al. Medical Center 2022, by and among Lessor and Lessee, pursuant to
of Boston, Inc., which the parties provided record notice to all third
et al. parties of their rights under the Lease.
14. MPT of Methuen- Steward St. Memorandum of Master Lease Agreement (Morton
Steward, LLC, et Elizabeth’s Hospital), dated as of March 14, 2022, by and among
al. Medical Center Lessor and Lessee, pursuant to which the parties
of Boston, Inc., provided record notice to all third parties of their rights
et al. under the Lease.

3
The Debtors party to the Master Lease II Ancillary Agreements numbered 10 through 18 include: Steward St.
Elizabeth’s Medical Center of Boston, Inc., Steward Good Samaritan Medical Center, Inc., Steward Holy Family
Hospital, Inc., Steward St. Anne’s Hospital Corporation, Morton Hospital, a Steward Family Hospital, Inc.,
Nashoba Valley Medical Center, a Steward Family Hospital, Inc., and Steward Carney Hospital, Inc.
 Case 24-90213 Document 1712-1 Filed in TXSB on 07/26/24 Page 7 of 8

Contract
No. Debtor Contract Description1
Counterparty
15. MPT of Methuen- Steward St. Memorandum of Master Lease Agreement (Nashoba
Steward, LLC, et Elizabeth’s Valley Medical Center), dated as of March 14, 2022,
al. Medical Center by and among Lessor and Lessee, pursuant to which
of Boston, Inc., the parties provided record notice to all third parties of
et al. their rights under the Lease.
16. MPT of Methuen- Steward St. Memorandum of Master Lease Agreement (St. Anne’s
Steward, LLC, et Elizabeth’s Parking Lot), dated as of March 14, 2022, by and
al. Medical Center among Lessor and Lessee, pursuant to which the
of Boston, Inc., parties provided record notice to all third parties of
et al. their rights under the Lease.
17. MPT of Methuen- Steward St. Memorandum of Master Lease Agreement (St. Anne’s
Steward, LLC, et Elizabeth’s Hospital), dated as of March 14, 2022, by and among
al. Medical Center Lessor and Lessee, pursuant to which the parties
of Boston, Inc., provided record notice to all third parties of their rights
et al. under the Lease.
18. MPT of Methuen- Steward St. Memorandum of Master Lease Agreement (St.
Steward, LLC, et Elizabeth’s Elizabeth’s Medical Center), dated as of March 14,
al. Medical Center 2022, by and among Lessor and Lessee, pursuant to
of Boston, Inc., which the parties provided record notice to all third
et al. parties of their rights under the Lease.
Guaranty
19. MPT of Methuen- Steward Health Guaranty, dated as of March 14, 2022, by and among
Steward, LLC, et Care System Steward Health Care System LLC, for the benefit of
al. LLC the MPT Parties, pursuant to which Steward Health
Care System LLC guarantees all of the obligations of
each lessee under Master Lease II.
Environmental Indemnification Agreement
20. MPT of Brighton- Steward Health Environmental Indemnification Agreement, dated as of
Steward, LLC, et Care System March 14, 2022, by and among Steward Health Care
al.4 LLC System LLC and the MPT Parties, pursuant to which
Steward Health Care System LLC indemnifies the
MPT Indemnified Parties from MPT Damages.
Non-Competition Agreement
21. MPT Operating Steward Health Non-Competition Agreement, dated as of March 14,
Partnership, L.P., Care System 2024, by and among Steward Health Care System
et al.5 LLC LLC, MPT Operating Partnership, L.P., and each
Lessor, pursuant to which Steward Health Care System
LLC agrees that while Master Lease II remains in
effect and if Master Lease II is terminated, then for a
period of three (3) years following such termination,
neither Steward Health Care System LLC nor its

4
MPT of Brighton-Steward, LLC, MPT of Brockton-Steward, LLC, MPT of Fall River-Steward, LLC, MPT of
Methuen-Steward, LLC, MPT of Taunton-Steward, LLC, MPT of Ayer-Steward, LLC, MPT of Haverhill-
Steward, LLC, and MPT of Dorchester-Steward, LLC.
5
MPT Operating Partnership, L.P., MPT of Brighton-Steward, LLC, MPT of Brockton-Steward, LLC, MPT of
Fall River-Steward, LLC, MPT of Methuen-Steward, LLC, MPT of Taunton-Steward, LLC, MPT of Ayer-
Steward, LLC, MPT of Haverhill-Steward, LLC, and MPT of Dorchester-Steward, LLC.
 Case 24-90213 Document 1712-1 Filed in TXSB on 07/26/24 Page 8 of 8

Contract
No. Debtor Contract Description1
Counterparty
Subsidiaries shall directly or indirectly, acquire,
finance, guarantee obligations, own, lease, manage,
develop or provide services in connection with the
acquisition, ownership, operation or development of
any real estate located within a ten (10) mile radius of
the Property, which real estate is used in a Competing
Business.
Subordination, Non-Disturbance, and Attornment Agreement
22. ACREFI CS U, Steward Tenants6 Subordination, Non-Disturbance and Attornment
LLC Agreement (Master Lease II), dated as of March 14,
2022, by and among Lender and Tenant, pursuant to
which Master Lease II and all terms and conditions
related thereto are subject and subordinated to the
Mortgage and the lien of the Mortgage.
Second Amended and Restated Security Agreement
23. MPT of West Steward Health Second Amended and Restated Security Agreement,
Jordan-Steward, Care System dated as of January 2, 2024, by and among Steward
LLC, MPT of LLC, the Master Health, the Lessees, and the Obligors, and the Secured
Layton-Steward, Lease I Lessees, Parties, pursuant to which Steward Health, the Lessees,
LLC, MPT TRS the Master Lease and the Obligors granted security interests in
Lender Steward, II Lessees, and accordance with (i) the Secured Parties agreeing to
LLC, and MPT the Obligors enter into the Forbearance Agreement and
Sycamore Opco, consummating the relevant transactions, including
LLC advancing the loan under the Stewardship Note, (ii) the
Limited Lien Subordination of the Secured Parties
related to the proceeds of the Lab Asset Sale, and
(iii) the allowance of the Obligors to defer certain
payments and other transactions.
Second Amended and Restated Pledge Agreement
24. MPT of West Pledgors and Second Amended and Restated Pledge Agreement,
Jordan-Steward, Pledged dated as of January 2, 2024, by and among the Pledgors
LLC, MPT of Obligors7 and Pledgees, pursuant to which the Pledgors, Pledged
Layton-Steward, Obligors, and Pledgees amended and restated the
LLC, MPT TRS Original Amended and Restated Pledge Agreement in
Lender Steward, its entirety and the Pledgors pledged, hypothecated,
LLC, and MPT assigned, granted, transferred, or set over a first
Sycamore Opco, priority security interest and lien upon the Pledged
LLC Interests and all proceeds thereof, including cash,
securities, and other property.

6
Steward St. Elizabeth’s Medical Center of Boston, Inc., Steward Good Samaritan Medical Center, Inc., Steward
Holy Family Hospital, Inc., Steward St. Anne’s Hospital Corporation, Morton Hospital, A Steward Family
Hospital, Inc., Nashoba Valley Medical Center, A Steward Family Hospital, Inc., and Steward Carney Hospital,
Inc.
7
Pledgors and Pledge Obligors are listed on Exhibit A to the agreement.