Equity Option Agreement
This Equity Option Agreement (this "Agreement"), dated as of
June 17, 1998, is made and entered into by and among AH Texas Investor, Inc., an
Ohio corporation (the "Investor"), AH Texas Subordinated, LLC, an Ohio limited
liability company (the "Company"), AH Texas CGP, Inc., an Ohio corporation (the
"General Partner"), AH Texas Owner Limited Partnership, an Ohio limited
partnership (the "Owner" and together with the Investor, the Company and the
General Partner shall be individually referred to as an "Owner Related Entity"
and shall be collectively referred to as the "Owner Related Entities"), and
Brookdale Living Communities, Inc., a Delaware corporation ("Brookdale").
RECITALS
WHEREAS, the Company was formed as of March 27,1998 by the
filing and recording of the Company's Articles of Organization in the Office of
the Secretary of State of the State of Ohio, pursuant to an Operating Agreement
dated as of March 27, 1998 and amended and restated pursuant to an Amended and
Restated Operating Agreement dated as of June 17, 1998 (as so amended and
restated, and as it may be further amended from time to time with the consent of
Brookdale, the "Operating Agreement");
WHEREAS, the Investor is the sole member of, and owns one
hundred percent (100%) of the membership interests (the "Membership Interests")
in, the Company;
WHEREAS, the Company is the sole limited partner of, and owns
ninety-nine percent (99%) of the partnership interests (the "Limited Partnership
Interests") in, the Owner, for which a Certificate of Limited Partnership was
filed with the Secretary of State of the State of Ohio on March 27, 1998 and
which was organized under an Agreement of Limited Partnership, effective as of
March 27, 1998 and amended and restated pursuant to an Amended and Restated
Agreement of Limited Partnership dated as of June 17, 1998 (as so amended and
restated, and as it may be further amended from time to time with the consent of
Brookdale, the "Partnership Agreement");
WHEREAS, the Company is the sole shareholder in, and owns one
hundred percent (100%) of the issued and outstanding shares of capital stock
(the "Capital Stock") of, the General Partner;
WHEREAS, the General Partner is the sole general partner of,
and owns one percent (1%) of the partnership interests (the "General Partnership
Interest") in, the Owner;
WHEREAS, the Owner intends to develop a congregate housing
facility with an assisted living component for the elderly in Austin, Texas
which is currently referred to as "The Heritage at Xxxxxx Ranch" (the
"Project");
WHEREAS, Nomura Asset Capital Corporation, a Delaware
corporation (the "Senior Lender"), has agreed to make a loan to the Owner up to
the sum of $24,250,000 to fund a portion of the costs of the Project pursuant to
a Building Loan Agreement of even date herewith (as it may be amended from time
to time with the consent of Brookdale, the "Building Loan Agreement") among the
Owner, BLC (as hereinafter defined) and the Senior Lender and a Loan Agreement
of
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even date herewith (as it may be amended from time to time with the consent of
Brookdale, the "Senior Loan Agreement" and, together with the Building Loan
Agreement, the "Senior Loan Agreements") among the Owner, BLC and the Senior
Lender;
WHEREAS, Banc One Capital Partners IV, Ltd., an Ohio limited
liability company (the "Subordinate Lender"), has agreed to loan to the Company
up to the sum of $_______________, pursuant to the terms of a certain Loan
Agreement of even date herewith (as it may be amended from time to time with the
consent of Brookdale, the "Subordinate Loan Agreement") between the Subordinate
Lender and the Company and as further evidenced by two certain promissory notes
of even date herewith (as amended or extended from time to time, and together
with any notes taken in substitution therefor, the "Subordinate Notes"), payable
by the Company to the Subordinate Lender, which the Company will contribute as
equity to the Owner to fund a portion of the costs of the Project;
WHEREAS, BLC of Texas-II, L.P., a Delaware limited partnership
("BLC") and affiliate of Brookdale will be the developer of the Project pursuant
to an Amended and Restated Development Agreement of even date herewith (as it
may be amended from time to time, the "Development Agreement") between the Owner
and BLC and will be the manager of the Project pursuant to a Management
Agreement of even date herewith (as it may be amended from time to time, the
"Management Agreement") between the Owner and BLC;
WHEREAS, the Investor has made a capital contribution in the
amount of $900,000 to the Company, which the Company has in turn contributed as
capital to the Owner to fund a portion of the costs of the Project; and
WHEREAS, the Investor is willing to grant an option to
Brookdale to purchase the Membership Interests upon the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the mutual agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Owner Related Entities and
Brookdale hereby agree as follows:
1. The Option. The Investor hereby grants an irrevocable
option (the "Option") to Brookdale to purchase the Membership Interests at the
Purchase Price (as defined in Section 3 hereof) in accordance with the terms of
this Agreement. The Option shall terminate and expire on the date (the "Option
Termination Date") that is the earliest of (a) ten (10) days after the principal
amount of the Subordinate Notes is due and payable, on the stated maturity date
thereof, as it may be extended pursuant to subsection 2.3(a) of the Subordinate
Loan Agreement, (b) thirty (30) days after the date specified by the Subordinate
Lender in a prior or contemporaneous notice to Brookdale as the date on which
the unpaid balance of all principal and interest accrued on the Subordinate
Notes has been declared by the Subordinate Lender to be, or shall have become
automatically, due and payable pursuant to Section 8.2 of the Subordinate Loan
Agreement, and (c) the Exercise Date, as defined in the Intercreditor and
Subordination Agreement of even date
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herewith (as it may be amended from time to time, the "Intercreditor Agreement")
among the Senior Lender, the Subordinate Lender, the Owner, the Company, the
Investor, the General Partner, BLC and Brookdale. In no event shall the Option
Termination Date be later than July 31, 2002.
2. Triggering Events. The Option is exercisable by Brookdale
on or after the earliest to occur of the following events or dates (each a
"Triggering Event"):
(a) An election by the Company to prepay the
Subordinate Notes in accordance with subsection 2.3(e) of the
Subordinate Loan Agreement.
(b) Five days prior to the date on which the
principal amount of the Subordinate Notes is due and payable, whether
on the stated maturity date thereof, as it may be extended pursuant to
subsection 2.3(a) of the Subordinated Loan Agreement, or upon the
earlier acceleration thereof.
(c) An Investor Default (as defined in Section 15
hereof) has occurred.
3. Purchase Price. The "Purchase Price" for the Membership
Interests shall be an amount equal to $900,000, plus the amount required to
produce a 17.11% internal rate of return thereon, computed using the methodology
described in Schedule I attached hereto, minus the aggregate amount of any
distributions made by the Company to the Investor (excluding distributions
permitted by paragraph (h) of Section 11).
4. Exercise of the Option. (a) Brookdale may exercise the
Option by giving the Investor and the Escrow Agent (as defined in Section 17
hereof) at least five (5) days' prior written notice (the "Option Notice"), and
if it is exercising the Option upon the occurrence of a Triggering Event
described in paragraph (a) of Section 2 hereof, by giving the Subordinate Lender
on behalf of the Company notice of an optional prepayment in accordance with
subsection 2.3(e) of the Subordinate Loan Agreement. The Option Notice shall
specify the date (the "Closing Date") of the exercise of the Option, which shall
be the date of the repayment in full of the Subordinated Notes, and in any case
shall not be later than the Option Termination Date. If Brookdale exercises the
Option prior to the Option Termination Date but fails to close prior to the
Exercise Date, then the Option shall terminate and Brookdale's rights shall
cease and be null and void. The Company hereby appoints Brookdale as its true
and lawful attorney-in-fact for purposes of giving notice of optional prepayment
in accordance with subsection 2.3(e) of the Subordinate Loan Agreement, which
appointment as attorney-in-fact is irrevocable and is coupled with an interest.
Anything herein to the contrary notwithstanding, the exercise of the Option
shall be conditioned upon the repayment in full of the Subordinate Notes in
accordance with the Subordinate Loan Agreement.
(b) In the event that at the time of the exercise of
the Option by Brookdale, it has not exercised the option (the "Michigan
Equity Option") granted to it pursuant to the Equity Option Agreement
of even date herewith among AH Michigan Investor, Inc., AH Michigan
Subordinated, LLC (the "Michigan LLC"), AH Michigan CGP,
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Inc., AH Michigan Owner Limited Partnership and Brookdale to purchase
one hundred percent (100%) of the membership interests in the Michigan
LLC, it shall be obligated to exercise such option, and to satisfy or
cause to be satisfied the conditions to such exercise (including,
without limitation, the repayment in full of the subordinate notes
issued by the Michigan LLC to the Subordinate Lender), prior to the
termination thereof.
(c) In the event that Brookdale exercises the
Michigan Equity Option prior to its exercise of the Option, it shall be
obligated to exercise the Option, and to satisfy or cause to be
satisfied the conditions to such exercise (including, without
limitation, the repayment in full of the Subordinate Notes), prior to
the Option Termination Date.
5. Closing. (a) Upon receipt of the Option Notice, the
Investor and Brookdale shall schedule a closing (the "Closing") to occur on the
Closing Date at the Chicago, Illinois offices of counsel to Brookdale. The
Investor and Brookdale shall each be solely responsible for its own costs
incurred in connection with the Closing; provided, however, that Brookdale shall
pay, or reimburse the Investor for, all reasonable legal fees and expenses of
the Investor incurred in connection with the Closing in an amount not to exceed
$2,500 when aggregated with all other legal fees and expenses paid or reimbursed
by Brookdale pursuant to clause (ii) of paragraph 6(c) and clause (ii) of
paragraph 7(c) of the Property Option Agreement of even date herewith ( as it
may be amended from time to time, the "Property Option Agreement") among the
Company, the Owner and Brookdale.
(b) Contemporaneously with the execution and delivery
of this Agreement, the Investor is delivering to the Escrow Agent an
Assignment and Acceptance Agreement in the form of Exhibit A attached
hereto (the "Assignment" and together with any other documents and
instruments delivered pursuant to clause (v) of paragraph (c) below,
the "Assignment Documents"), undated, but otherwise duly executed by
the Investor.
(c) At the Closing, the Escrow Agent shall, in
accordance with the escrow instructions set forth in Section 17 hereof,
deliver the Purchase Price to the Investor, and the Assignment to
Brookdale or its nominee, and the Investor shall deliver to Brookdale
or its nominee the following items:
(i) the stock certificate(s) representing the Capital Stock;
(ii) original executed copies (or if unavailable, photocopies) of the
Company's Articles of Organization, the Operating Agreement, the Owner's
Certificate of Limited Partnership, the Partnership Agreement and the General
Partner's Articles of Incorporation and Regulations, all certified by an
appropriate officer of the relevant Owner Related Entity as of the Closing Date,
as being true, correct, complete and unamended (or if amended with the consent
of Brookdale, certified to such effect) and in full force and effect as of such
date;
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(iii) a certificate of an appropriate officer of each Owner Related Entity,
dated the Closing Date, certifying that the representations and warranties of
such Owner Related Entity set forth in the applicable Section of this Agreement
are true and correct as of the Closing Date as though made by such Owner Related
Entity on the Closing Date;
(iv) the books and records of each Owner Related Entity; and
(v) such other documents and instruments of transfer as are necessary to
complete the transfer of the Membership Interests.
(d) The representations and warranties made by the Owner Related Entities
as of the Closing Date shall survive the Closing.
(e) Prior to the Closing, Brookdale shall conduct Uniform Commercial Code,
tax lien, pending suit and judgment and any other appropriate searches against
each of the Owner Related Entities.
6. Grant of Security Interest. (a) To secure the performance by the Owner
Related Entities of their respective obligations hereunder and the repayment of
any and all indebtedness and other liabilities arising from any breach by any of
the Owner Related Entities of its obligations hereunder, the Investor hereby
grants to Brookdale a continuing security interest in the Membership Interests
and all proceeds thereof, including, without limitation, the right to receive
any and all payments or distributions of any and every kind whatsoever, whether
in cash, property or otherwise, at any time made, owing or payable with respect
to the Membership Interests, together with all applicable rights, powers and
privileges of the Investor as the sole member and manager of the Company
pursuant to the Operating Agreement (all of the foregoing being hereinafter
collectively referred to as the "Collateral"). The security interest in the
Collateral granted pursuant to the preceding sentence shall be subordinate to
the security interest of the Subordinate Lender in the Membership Interests and
the proceeds thereof (the "Subordinate Lender Security Interest") granted by the
Investor to the Subordinate Lender pursuant to the Security Agreement - Pledge
and Assignment of Membership Interests dated as of the date hereof (the
"Subordinate Lender Security Agreement") between the Investor and the
Subordinate Lender.
(b) Subject to the rights of the Subordinate Lender under the
Subordinate Lender Security Agreement, the Investor does hereby irrevocably
constitute and appoint Brookdale its true and lawful attorney-in-fact, with full
power of substitution, for the Investor and in its name, place and stead, to
ask, demand, collect, receive, receipt for, xxx for, compound and give
acquittance for any and all sums or properties which may be or become due,
payable or distributable with respect to the Collateral, with full power to
settle, adjust or compromise any claim thereunder as fully as the Investor could
do, and to endorse or sign the name of the Investor on all items, instruments
and commercial paper given in payment or in part payment thereof, and all
documents of satisfaction, discharge or receipt required or requested in
connection therewith, and, in its discretion, to file any
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claim or take any other action or proceeding, either in its own name or in the
name of the Investor, or otherwise, which Brookdale may deem necessary or
appropriate to perfect Brookdale's security interest in or collect or otherwise
realize upon any and all of the Collateral, or effect a transfer thereof
pursuant to the Operating Agreement and this Agreement, or which may be
necessary or appropriate to protect and preserve the right, title and interest
of Brookdale in and to the Collateral and the security intended to be afforded
hereby.
(c) Without limiting the foregoing, the Investor agrees that
it will, upon request of Brookdale, execute and deliver such further documents
and instruments (including, without limitation, Uniform Commercial Code
Financing Statements) and do and perform such other acts and things (including,
without limitation, obtaining such consents hereto, and giving such notices
hereof, as Brookdale may reasonably request from time to time) as Brookdale may
deem necessary or appropriate to more effectively vest in and secure to
Brookdale the Collateral or other rights or interests due or hereafter to become
due.
(d) Upon the occurrence and continuance of an Investor
Default, in addition to the rights and remedies Brookdale may have hereunder, it
shall have all the rights and remedies of a secured party under applicable law
with respect to the Collateral. All costs and expenses of any kind whatsoever,
of collection and enforcement of the obligations secured hereby or any rights or
remedies hereunder (including without limitation, all costs of disposing of the
Collateral, together with court costs and reasonable attorneys' fees), or
incurred in realizing upon the Collateral or in enforcing this Agreement, shall
be deemed to be additional obligations secured hereby, and may be deducted and
retained by Brookdale from the proceeds of disposition of the Collateral and
applied to the payment and satisfaction of such costs and expenses.
(e) The security interest of Brookdale in the Collateral shall
terminate upon the earlier of the Closing or the Option Termination Date, and
upon such termination, Brookdale shall promptly deliver to the Investor the
appropriate Uniform Commercial Code termination statements.
7. Investor Representations. The Investor represents and
warrants to Brookdale as of the date hereof and as of the Closing Date as
follows:
(a) The Investor is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Ohio and has all requisite power and authority to execute, deliver and
perform its obligations under this Agreement and the Assignment
Documents and to own and operate its property and to carry on its
business as now conducted. The Investor is duly qualified to do
business in each jurisdiction where the nature of its operations and
applicable laws require such qualification, except where the failure to
be so qualified would not have a material adverse effect on the
Investor.
(b) The execution, delivery and performance of this
Agreement by the Investor have been, and as of the Closing Date, the
execution, delivery and performance of the Assignment Documents by the
Investor will have been, duly authorized by all necessary
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corporate action, and this Agreement is, and when executed and
delivered, the Assignment Documents will be, the legal, valid and
binding obligation of the Investor, enforceable in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency
or the laws or equitable principles affecting the enforcement of
creditors' rights generally.
(c) The execution, delivery and performance by the
Investor of this Agreement do not, and the execution, delivery and
performance by the Investor of the Assignment Documents will not,
contravene the terms of the Investor's Articles of Incorporation or
Regulations, true, correct and complete copies of which have been
delivered to Brookdale, conflict with or result in any breach or
contravention of, or the creation of any lien under, any agreements or
instruments to which it is a party or by which it or any of its
property is bound or violate any state or federal law and all required
approvals therefor, if any, have been, or will have been as of the
Closing Date, duly obtained.
(d) The Membership Interests constitute all of the
membership interests in the Company, and the Investor owns the
Membership Interests, free of any liens, claims or encumbrances, other
than, as of the date hereof, the Subordinate Lender Security Interest
and the Special Management Interests (as defined in the Intercreditor
Agreement).
(e) There is no litigation or other proceeding
pending against the Investor which could have a material adverse effect
on the Investor's ability to consummate the transactions contemplated
by this Agreement and the Assignment Documents.
(f) The Investor's sole place of business is its
address set forth for notices in paragraph (c) of Section 18 hereof.
8. Company Representations. The Company represents and
warrants to Brookdale as follows as of the date hereof and as of the Closing
Date:
(a) The Company is a limited liability company duly
organized, validly existing and in good standing under the laws of the
State of Ohio and has all requisite power and authority to execute,
deliver and perform its obligations under this Agreement and to own and
operate its property and to carry on its business as now conducted. The
Company is duly qualified to do business in each jurisdiction where the
nature of its operations and applicable laws require such
qualification, except where the failure to be so qualified would not
have a material adverse effect on the Company.
(b) The execution, delivery and performance of this
Agreement by the Company have been duly authorized by all necessary
organizational action, and this Agreement is the legal, valid and
binding obligation of the Company, enforceable in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency
or the laws or equitable principles affecting the enforcement of
creditors' rights generally.
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(c) The execution, delivery and performance by the
Company of this Agreement do not contravene the terms of the Company's
Articles of Organization or the Operating Agreement, true, correct and
complete copies of which have been delivered to Brookdale, conflict
with or result in any breach or contravention of, or the creation of
any lien under, any agreements or instruments to which it is a party or
by which it or any of its property is bound or violate any state or
federal law and all required approvals therefor, if any, have been duly
obtained.
(d) The Company is the sole limited partner of the
Owner, and the Limited Partnership Interests constitute ninety-nine
(99%) of the partnership interests in, the Owner.
(e) Subject to the Senior Lender's rights with
respect to and any rights that it may acquire upon the acquisition of
the Preferred Equity and the Warrants (as such terms are defined in the
Senior Loan Agreement), the Company owns the Limited Partnership
Interests free of any liens, claims or encumbrances.
(f) The Membership Interests are not represented by
any certificates and/or similar instruments, and the Operating
Agreement contains a description of the rights of Brookdale pursuant to
this Agreement.
(g) There is no litigation or other proceeding
pending against the Company which could have a material adverse effect
on the Company's ability to consummate the transactions contemplated by
the Property Option Agreement and as of the Closing Date, if
applicable, the Assignment (as defined therein).
(h) All of the representations and warranties of the
Company set forth in Article V of the Subordinate Loan Agreement are
true and correct as though such representations and warranties were set
forth herein for Brookdale's benefit.
(i) All of the representations and warranties of the
Company set forth in Section 8 of the Property Option Agreement are
true and correct.
(j) The Company has no outstanding liabilities,
contingent or otherwise, other than, as of the date hereof, (i) the
indebtedness evidenced by the Subordinated Notes and (ii) liabilities
for which Brookdale or the Subordinate Lender (or any one or more of
their affiliates) is liable to the Company.
9. General Partner Representations. The General Partner
represents and warrants to Brookdale as follows as of the date hereof and as of
the Closing Date:
(a) The General Partner is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Ohio and has all requisite power and
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authority to execute, deliver and perform its obligations under this
Agreement and to own and operate its property and to carry on its
business as now conducted. The Company is duly qualified to do business
in each jurisdiction where the nature of its operations and applicable
laws require such qualification, except where the failure to be so
qualified would not have a material adverse effect on the General
Partner.
(b) The execution, delivery and performance of this
Agreement by the Company have been duly authorized by all necessary
corporate action, and this Agreement is the legal, valid and binding
obligation of the Company, enforceable in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency, or the
laws or equitable principles affecting the enforcement of creditors'
rights generally.
(c) The execution, delivery and performance by the
General Partner of this Agreement do not contravene the terms of the
General Partners's Articles of Incorporation or Regulations, true,
correct and complete copies of which have been delivered to Brookdale,
conflict with or result in any breach or contravention of, or the
creation of any lien under, any agreements or instruments to which it
is a party or by which it or any of its property is bound or violate
any state or federal law and all required approvals therefor, if any,
have been duly obtained.
(d) The General Partner is the sole general partner
of the Owner, and the General Partnership Interest constitutes one
percent (1%) of the partnership interests in, the Owner.
(e) Subject to the Senior Lender's rights with
respect to and any rights that it may acquire upon the acquisition of
the Preferred Equity and the Warrants (as such terms are defined in the
Senior Loan Agreement), the General Partner owns the General
Partnership Interest free of any liens, claims or encumbrances.
(f) All of the representations and warranties made on
behalf of the General Partner set forth in Article V of the Subordinate
Loan Agreement are true and correct as though such representations and
warranties were set forth herein for Brookdale's benefit.
(g) The General Partner has no outstanding
liabilities, contingent or otherwise, other than (i) those of Owner
referred to in paragraph (g) of Section 10 hereof for which it is
liable by virtue of being general partner of Owner and (ii) liabilities
for which Brookdale or the Subordinate Lender (or one or more of their
affiliates) is liable to the General Partner.
10. Owner Representations. The Owner represents and warrants
to Brookdale as follows as of the date hereof and as of the Closing Date:
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(a) The Owner is a limited partnership duly
organized, validly existing and in good standing under the laws of the
State of Ohio and has all requisite power and authority to execute and
deliver this Agreement, to perform its obligations under Section 14
hereof and to own and operate its property and to carry on its business
as now conducted. The Owner is duly qualified to do business in each
jurisdiction where the nature of its operations and applicable laws
require such qualification, except where the failure to be so qualified
would not have a material adverse effect on the Owner.
(b) The execution and delivery of this Agreement and
the performance by the Owner of its obligations under Section 14 hereof
have been duly authorized by all necessary partnership action, and this
Agreement is the legal, valid and binding obligation of the Owner,
enforceable in accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency or the laws or equitable principles
affecting the enforcement of creditors' rights generally.
(c) The execution and delivery of this Agreement and
the performance by the Owner of its obligations under Section 14 hereof
do not contravene the terms of the Partnership Agreement, a true,
correct and complete copy of which has been delivered to Brookdale,
conflict with or result in any breach or contravention of, or the
creation of any lien under, any agreements or instruments to which it
is a party or by which it or any of its property is bound or violate
any state or federal law and all required approvals therefor, if any,
have been duly obtained
(d) There is no litigation or other proceeding
pending against the Owner which could have a material adverse effect on
the Owner's ability to consummate the transactions contemplated by the
Property Option Agreement and as of the Closing Date, if applicable,
the Property Conveyance Documents (as defined therein).
(e) All of the representations and warranties made on
behalf of the Owner set forth in Article V of the Subordinate Loan
Agreement and Article IV of the Senior Loan Agreement are true and
correct as though such representations and warranties were set forth
herein for Brookdale's benefit.
(f) All of the representations and warranties of the
Owner set forth in Section 9 of the Property Option Agreement are true
and correct.
(g) The Owner has no outstanding liabilities,
contingent or otherwise, other than those incurred under or permitted
by the Senior Loan Agreements, any of the Loan Documents (as defined
therein), the Management Agreement and, as of the date hereof, the
Development Agreement.
11. Investor Covenants. Until the earlier of the Closing or
the Option Termination Date, unless Brookdale otherwise consents in writing, the
Investor:
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(a) Shall preserve and maintain its legal existence,
rights, franchises and privileges in the State of Ohio, and shall
qualify and remain qualified in each jurisdiction in which such
qualification is necessary or desirable in view of its business and
operations or the ownership of its property.
(b) Shall at all times observe and comply with the
provisions of Articles Fifth, Sixth and Tenth of its Articles of
Incorporation as in effect on the date hereof.
(c) Shall not amend the Company's Articles of
Organization or the Operating Agreement and shall at all times observe
and comply with the provisions thereof.
(d) Shall not cause or permit the dissolution of the
Company.
(e) Shall not permit the issuance of any member's
interests (or any other interests) in the Company in addition to the
Membership Interests.
(f) Shall continue to own the Membership Interests
(which shall continue to constitute 100% of the membership interests in
the Company), free of any liens, claims or encumbrances, other than the
Subordinate Lender Security Interest and the security interest created
by this Agreement.
(g) Shall not file a voluntary petition in bankruptcy
and shall use its best efforts to contest any involuntary petition
filed against it.
(h) Shall not permit or accept any distributions by
the Company, other than distributions to be applied to the payment of
income taxes and funded by advances to the Company made by the
Subordinate Lender pursuant to subsection 2.6(a) of the Subordinate
Loan Agreement.
(i) Shall give Brookdale at least thirty (30) days'
prior written notice of any change in its place of business.
(j) Shall not take any actions that might adversely
affect Brookdale's rights under, or be inconsistent with the terms of,
this Agreement.
12. Company Covenants. Until the earlier of the Closing or the
Option Termination Date, unless Brookdale otherwise consents in writing, the
Company:
(a) Shall not amend the Articles of Incorporation or
the Regulations of the General Partner or amend or consent to the
amendment of the Partnership Agreement, and shall at all times observe
and comply with the provisions thereof.
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(b) Shall continue to own the Limited Partnership
Interests (which shall continue to constitute 99% of the partnership
interests in the Owner), free of any liens, claims or encumbrances.
(c) Shall continue to own the Capital Stock (which
shall continue to constitute one hundred percent (100%) of the issued
and outstanding capital stock of the General Partner), free of any
liens, claims or encumbrances.
(d) Shall not amend, or request any waiver of any
provision of, the Subordinate Loan Agreement or any of the Loan
Documents (as defined therein) to which it is a party.
(e) Shall comply with all of the covenants applicable
to it set forth in Articles 6 and 7 of the Subordinate Loan Agreement,
and shall promptly deliver to Brookdale copies of all financial
statements, reports, notices, certificates or other writings delivered
to the Subordinate Lender pursuant thereto.
(f) Shall not permit or accept any distributions by
the Owner or any dividends by the General Partner.
(g) Shall not incur any liabilities or obligations,
contingent or otherwise, except expenses incurred in the ordinary
course of administering its business or those that are incurred under
or are necessary to comply with the provisions of the Subordinate Loan
Agreement, and shall not enter into any agreement or contract, whether
oral or written, except this Agreement, the Property Option Agreement,
the Intercreditor Agreement, the Subordinate Loan Agreement and the
Loan Documents (as defined therein) to which it is a party, and
agreements entered into in the ordinary course of administering its
business.
(h) Shall give Brookdale at least thirty (30) days'
prior written notice of any change in its place of business.
(i) Shall not take any actions that might adversely
affect Brookdale's rights under, or be inconsistent with the terms of,
this Agreement.
13. General Partner Covenants. Until the earlier of the
Closing or the Option Termination Date, unless Brookdale otherwise consents in
writing, the General Partner:
(a) Shall not amend or consent to the amendment of
the Partnership Agreement, and shall at all times observe and comply
with the provisions thereof.
(b) Shall not cause or permit the dissolution or
winding up of the Owner.
12
(c) Shall not permit the issuance of any interest in
the Owner in addition to the Limited Partnership Interests and the
General Partnership Interest.
(d) Shall continue to own the General Partnership
Interest (which shall continue to constitute the only general
partnership interest in, and one percent (1%) of the partnership
interests) in, the Owner, free of any liens, claims or encumbrances.
(e) Shall comply with all of the covenants applicable
to it set forth in Articles 6 and 7 of the Subordinate Loan Agreement.
(f) Shall not permit or accept any partnership
distributions by the Owner or the payment to itself of any compensation
as general partner of the Owner.
(g) Shall not declare or pay any dividends with
respect to, or purchase or redeem, or issue any options or other rights
with respect to, any shares of the Capital Stock.
(h) Shall not incur any liabilities or obligations,
contingent or otherwise, except expenses incurred in the ordinary
course of administering its business, or enter into any agreement or
contract, whether oral or written, except this Agreement and, on behalf
of the Owner as its general partner, agreements or contracts into which
the Owner is permitted to enter pursuant to paragraph (d) of Section 14
hereof.
(i) Shall not take any actions that might adversely
affect Brookdale's rights under, or be inconsistent with the terms of,
this Agreement.
14. Owner Covenants. Until the earlier of the Closing or the
Option Termination Date, unless Brookdale otherwise consents in writing, the
Owner:
(a) Shall comply with all of the covenants applicable
to it set forth in Articles V, VI and VII of the Senior Loan Agreement
and shall promptly deliver to Brookdale copies of all financial
statements, reports, notices, certificates or other writings delivered
to the Senior Lender pursuant thereto.
.
(b) Shall not incur any liabilities or obligations,
contingent or otherwise, except expenses incurred in the ordinary
course of administering its business or those that are incurred under
or are necessary to comply or are permitted by with the provisions of
the Senior Loan Agreements, and shall not enter into any agreement or
contract, whether oral or written, except this Agreement, the Property
Option Agreement, the Intercreditor Agreement, the Senior Loan
Agreement, the Loan Documents (as defined therein) to which it is a
party, the Development Agreement and the Management Agreement, and
agreements entered into in the ordinary course of administering its
business.
13
(c) Shall continue to own the Property (as defined in
the Property Option Agreement), free of any liens, claims or
encumbrances, other than Permitted Exceptions (as so defined).
(d) Shall not take any actions that might adversely
affect Brookdale's rights under, or be inconsistent with the terms of,
this Agreement other than as may be required by the Senior Loan
Agreements or the Loan Documents (as defined therein).
15. Investor Defaults. An "Investor Default" shall mean the
occurrence of one or more of the following described events:
(a) A material breach by any Owner Related Entity of
any of the representations and warranties contained (or contained by
reference) in Section 7, 8, 9 or 10 hereof on the date as of which
made.
(b) Any Owner Related Entity defaults in the
performance or observation of any covenant of such Owner Related Entity
contained in this Agreement and such default shall continue without
cure for fifteen (15) days after notice thereof by Brookdale to such
Owner Related Entity and the Subordinate Lender.
(c) An "Event of Default", as defined in the
Subordinate Loan Agreement, occurs, which "Event of Default" has not
been caused, directly or indirectly, by the Manager or Brookdale.
(d) An "Event of Default", as defined in either of
the Senior Loan Agreements, occurs, which "Event of Default" has not
been caused, directly or indirectly, by the Manager or Brookdale.
(e) An "Event of Default", as defined in the
Development Agreement, by the Owner occurs.
(f) An "Event of Default", as defined in the
Management Agreement, by the Owner occurs.
(g) The Investor makes an assignment for the benefit
of creditors.
(h) The Investor petitions or applies to any tribunal
for the appointment of a trustee or receiver for itself or any
substantial part of its assets or the Investor commences any proceeding
relating to it under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation law of any
jurisdiction whether now or hereafter in effect.
14
(i) Any petitions or applications are filed, or any
proceedings are commenced, against the Investor seeking the
adjudication of it as bankrupt and the Investor by any act indicates
its admission or consent thereto, or acquiescence therein, or any order
is entered appointing a trustee or receiver, or adjudicating the
Investor bankrupt or insolvent, or approving the petition in any such
proceedings and such order remains unstayed or undischarged for more
than sixty (60) days.
(j) Any order is entered in any proceeding against
the Investor decreeing the dissolution of the Investor and such order
remains unstayed or undischarged for more than sixty (60) days.
(k) Any judgment or order is entered in any
proceedings which affects the Membership Interests, the Limited
Partnership Interests, the Capital Stock or the General Partnership
Interest, or any lien, claim or other encumbrance encumbers any
thereof, other than, in the case of the Membership Interests, the
Subordinate Lender Security Interest and the Special Management
Interests.
16. Notice of Certain Events. Owner and each other Owner
Related Entity agrees to promptly give notice to Brookdale of:
(a) Any Investor Default known to Owner or such other Owner Related Entity;
(b) Any notice of any default or "Event of Default"
or any other notice received from the Senior Lender under the Senior
Loan Agreements (unless a copy of such notice is required to be
delivered to BLC and/or Brookdale pursuant thereto);
(c) Any notice of any default or "Event of Default"
or any other notice received from the Subordinate Lender under the
Subordinate Loan Agreement (unless a copy of such notice is required to
be delivered to BLC and/or Brookdale pursuant thereto); and
(d) Any notice given by Owner or any other Owner
Related Entity to the Senior Lender or the Subordinate Lender.
Each notice pursuant to this Section 16 shall be accompanied by a statement of
the chief executive officer of the relevant Owner Related Entity setting forth
the details of the occurrence referred to therein and, if applicable, stating
what action such Owner Related Entity proposes to take with respect thereto.
17. Appointment of Escrow Agent And Establishment of Escrow.
(a) Brookdale and the Investor agree to appoint
Squire, Xxxxxxx & Xxxxxxx as Escrow Agent (in such capacity, together
with any successor thereto, the
15
"Escrow Agent") pursuant to the terms of the Escrow Agent Appointment
Agreement attached hereto as Exhibit B (the "Escrow Agent Appointment
Agreement").
(b) Brookdale and the Investor hereby establish an
escrow to hold the Assignment and to facilitate the Closing.
(c) The Escrow Agent agrees to act in accordance with
the Escrow Agent Appointment Agreement and this Section 17.
(d) On the Closing Date, Brookdale shall deliver to
the Escrow Agent, (i) the Purchase Price by wire transfer of
immediately available funds to an account designated by the Escrow
Agent, (ii) a certificate (the "Purchase Price Certificate") of a
Treasurer or an Assistant Treasurer of Brookdale, dated the Closing
Date or a date within the preceding five (5) days, stating that (A) a
Triggering Event has occurred, (B) the Option Termination Date has not
occurred, (C) in the event that Brookdale desires the Assignment to be
delivered to a nominee, the name of such nominee, (D) the Purchase
Price has been accurately calculated in accordance with Section 3
hereof and Schedule I attached hereto, and showing such calculation,
and (iii) a letter from the Subordinate Lender confirming the receipt
of repayment in full of the Subordinate Notes in accordance with the
Subordinate Loan Agreement.
(e) On the Closing Date, upon receipt of the Purchase
Price and the Purchase Price Certificate, the Escrow Agent shall take
the following actions:
(i) Date the Assignment the Closing
Date, insert the name of the
"Assignee" in the preamble thereto
and deliver the Assignment to
Brookdale or its nominee; and
(ii) Deliver the Purchase Price to the
Investor by wire transfer of
immediately available funds to an
account designated by the Investor.
(f) In the event that Brookdale assigns its rights
under this Agreement pursuant to paragraph (e) of Section 18 hereof, it
shall so notify the Escrow Agent.
18. Miscellaneous.
(a) Each Owner Related Entity and Brookdale agree that money damages or
other remedy at law would not alone be sufficient or adequate remedy for any
breach or violation of, or a default under, this Agreement by such Owner Related
Entity and that, in addition to all other remedies available to Brookdale,
Brookdale shall be entitled to an injunction restraining such breach, violation
or default or threatened breach, violation or
16
default and to any other equitable relief, including, without limitation,
specific performance, without bond or other security being required.
(b) The Owner Related Entities acknowledge and agree that (i) they are not
intended to be beneficiaries of the limitations set forth in the Intercreditor
Agreement on the rights of Brookdale to take Enforcement Actions (as defined
therein) and to enforce any representations, covenants, warranties or
obligations of the Owner under or pursuant to this Agreement, and (ii) they may
not seek to enforce such limitations.
(c) Notices. Any notices required or permitted to be sent hereunder shall
be delivered personally or by telecopier (with answer back acknowledged) or
mailed, certified mail, return receipt requested, or delivered by overnight
courier service to the following addresses, or such other addresses as shall be
given by notice delivered hereunder, and shall be deemed to have been given upon
delivery, if delivered personally, upon receipt with answer back acknowledged,
if delivered by telecopier, three (3) business days after mailing, if mailed, or
one business day after delivery to the courier, if delivery by overnight courier
service:
If to the
Investor: AH Texas Investor, Inc.
000 Xxxx xx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxx
Fax: (000) 000-0000
with a copy to:
Squire, Xxxxxxx & Xxxxxxx
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attn: Xxxxx X. Xxxx
Fax: (000) 000-0000
If to the
Company: AH Texas Subordinated, LLC
000 Xxxx xx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxx
Fax: (000) 000-0000
with a copy to:
Squire, Xxxxxxx & Xxxxxxx
17
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attn: Xxxxx X. Xxxx
Fax: (000) 000-0000
If to the
General Partner: AH Texas CGP, Inc.
000 Xxxx xx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxx
Fax: (000) 000-0000
with a copy to:
Squire, Xxxxxxx & Xxxxxxx
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attn: Xxxxx X. Xxxx
Fax: (000) 000-0000
If to the
Owner: AH Texas Owner Limited Partnership
000 Xxxx xx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxx
Fax: (000) 000-0000
with a copy to:
Squire, Xxxxxxx & Xxxxxxx
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attn: Xxxxx X. Xxxx
Fax: (000) 000-0000
If to Brookdale: Brookdale Living
Communities, Inc.
00 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxx, Xx.
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxxx
18
Fax: (000) 000-0000
with a copy to: Winston & Xxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx
Fax: (000) 000-0000
A copy of any notice sent hereunder shall be sent to (i) the Senior Lender
at Nomura Asset Capital Corporation, Two World Xxxxxxxxx Xxxxxx, Xxxxxxxx X, Xxx
Xxxx, Xxx Xxxx 00000-0000, Attention: Xxxxxx XxXxxx, Telecopier: (000) 000-0000,
with copies to: Nomura Asset Capital Corporation, Two World financial Xxxxxx,
Xxxxxxxx X, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx Xxxx, Telecopier: (212)
667-1567 and Dechert Price & Xxxxxx, 00 Xxxxx Xxxxx Xxxxxx, 00xx xxxxx,
Xxxxxxxx, Xxxxxxxxxxx 00000-0000, Attention: Xxxx X. Xxxxxxxx, Fax: (860)
000-0000 (or such other address as shall be given by notice delivered
hereunder), and (ii) the Escrow Agent at Squire, Xxxxxxx & Xxxxxxx, 00 Xxxxx
Xxxx Xxxxxx, Xxxxxxxx, Xxxx 00000, Attention: Xxxxx X. Xxxx, Fax: (000) 000-0000
(or such other address as shall be given by notice delivered hereunder).
(d) Entire Agreement. This Agreement (including the schedule and exhibits
hereto) constitutes the entire agreement among the parties hereto with respect
to the subject matter hereof and supersedes all prior agreements and
understandings, oral and written, among the parties hereto with respect to the
subject matter hereof.
(e) Binding Effect; Benefit. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective successors and
assigns. Brookdale may assign its rights under this Agreement without the
consent of any Owner Related Entities. In the event that Brookdale assigns its
rights under this Agreement, it shall so notify the other parties hereto, and
references herein, including, without limitation, in Section 17 hereof, and in
the Escrow Agent Appointment Agreement, to Brookdale shall be deemed to be
references to the assignee to whom such rights have been assigned upon the
execution and delivery by Brookdale and such assignee of an assignment and
assumption agreement with respect to the Escrow Appointment Agreement and this
Agreement and delivery of a copy thereof to each of the other parties hereto and
the Escrow Agent.
(f) No Third Party Beneficiaries. This Agreement is not intended to and
does not benefit or confer rights upon, and is not intended to be and is not
enforceable by, any persons or entities not party to this Agreement, including,
without limitation, the Senior Lender and the Subordinate Lender.
(g) Amendment; Waiver. No provision of this Agreement may be amended,
waived or otherwise modified without the prior written consent of the parties
19
hereto and the Subordinate Lender, and, in the case of any amendment
to, or waiver or modification of, the provisions of Section 17 hereof,
the acknowledgment and agreement of the Escrow Agent.
(h) Section Headings. The section headings contained
in this Agreement are for reference purposes only and shall not affect
the meaning or interpretation of this Agreement.
(i) 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 be deemed to be one and the
same instrument.
(j) Applicable Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of Illinois
(without giving effect to principles of conflicts of law).
(k) Waiver of Jury Trial. Each party hereto, after
consulting or having had the opportunity to consult with counsel,
knowingly, voluntarily and intentionally waives any right any of them
may have to a trial by jury in any litigation based upon or arising out
of this Agreement, or any of the transactions contemplated by this
Agreement, or any course of conduct, dealing, statements (whether oral
or written) or actions of any of them. No such party shall seek to
consolidate, by counterclaim or otherwise, any action in which a jury
trial has been waived with any other action in which a jury trial
cannot be or has not been waived unless failure to so consolidate would
result in a loss of such claim.
(l) Limitation of Personal Liability. Notwithstanding
any other provision of this Agreement to the contrary, (i) in no event
shall any officer, director, member, partner, manager, shareholder,
incorporator or agent of any Owner Related Entity be personally liable
to Brookdale for any of such Owner Related Entity's obligations under
this Agreement, and (ii) if the Owner defaults in connection with any
representation or covenant of the Owner set forth in this Agreement, it
will not create any personal liability against the Owner or any lien
rights against the Property.
(m) Intercreditor Agreement. The parties hereto
acknowledge the existence of the Intercreditor Agreement.
20
IN WITNESS WHEREOF, the undersigned have executed and
delivered this Agreement as of the date first above written.
AH TEXAS INVESTOR, INC.
By:___________________________
Name: Xxxxx X. Xxxxxxx
Its: President
AH TEXAS SUBORDINATED, LLC
By: AH Texas Investor, Inc., its manager
By: ___________________________
Name: Xxxxx X. Xxxxxxx
Its: President
AH TEXAS CGP, INC.
By:___________________________
Name: Xxxxx X. Xxxxxxx
Its: President
AH TEXAS OWNER LIMITED PARTNERSHIP
By: AH Texas CGP, Inc., its general partner
By:___________________________
Name: Xxxxx X. Xxxxxxx
Its: President
BROOKDALE LIVING COMMUNITIES, INC.
By:___________________________
Name:_________________________
Its:____________________________
21
JOINDER
The undersigned hereby joins in the execution and delivery of the
foregoing Agreement for the sole purpose of acknowledging and agreeing to the
provisions of Section 17 thereof.
SQUIRE, XXXXXXX & XXXXXXX
---------------------------------
By:______________________________
Name:____________________________
22
EXHIBIT A
ASSIGNMENT AND ACCEPTANCE AGREEMENT
THIS AGREEMENT made as of ___________________, by and between AH TEXAS
INVESTOR, INC., an Ohio corporation ("Assignor"), and
_______________________________ ("Assignee").
WITNESSETH:
1. For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Assignor does hereby transfer, assign and convey
to Assignee a one hundred percent (100%) interest (the "Interest") as Member in
AH TEXAS SUBORDINATED, LLC, an Ohio limited liability company (the "LLC").
2. Assignor does hereby warrant and represent that it is the sole and
lawful owner of the Interest herein transferred, free of any liens, claims or
encumbrances and that it has full power and authority to make such transfer.
3. Assignee does hereby accept the foregoing assignment and agrees to
become a Member of the LLC.
ASSIGNOR:
AH TEXAS INVESTOR, INC.
By:___________________________
Title:_________________________
ASSIGNEE:
By:___________________________
Title:_________________________
1
EXHIBIT B
ESCROW AGENT APPOINTMENT AGREEMENT
This Escrow Agent Appointment Agreement (this "Agreement"),
dated as of June __, 1998, is made and entered into by and among AH Texas
Investor, Inc., an Ohio corporation (the "Investor"), Brookdale Living
Communities, Inc., a Delaware corporation ("Brookdale"), and Squire, Xxxxxxx &
Xxxxxxx, as escrow agent hereunder (in such capacity, together with any
successor thereto, the "Escrow Agent").
RECITALS
WHEREAS, the Investor, AH Texas Subordinated, LLC, an Ohio
limited liability company (the "Company"), AH Texas CGP, Inc., an Ohio
corporation (the "General Partner"), AH Texas Owner Limited Partnership, an Ohio
limited partnership, and Brookdale have entered into an Equity Option Agreement
of even date herewith (as it may be amended from time to time, the "Equity
Option Agreement");
WHEREAS, pursuant to the Equity Option Agreement, the Investor
has granted an option to Brookdale to purchase the membership interests (the
"Membership Interests") that it owns in the Company; and
WHEREAS, the Investor and Brookdale have requested the Escrow
Agent to act in the capacity of escrow agent for the purpose of holding in
escrow the Assignment and Acceptance Agreement pursuant to which the Membership
Interests are to be conveyed, and the Escrow Agent, subject to the terms and
conditions hereof, has agreed to do so.
NOW, THEREFORE, in consideration of the mutual agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Investor, Brookdale and the
Escrow Agent hereby agree as follows:
1. Definitions. Unless otherwise defined herein, capitalized terms used
herein shall have the meanings ascribed to them in the Equity Option Agreement.
2. Appointment of Escrow Agent. The Investor and Brookdale hereby designate
the Escrow Agent to act as escrow agent for the purposes of performing the
duties set forth in Section 17 of the Equity Option Agreement, and the Escrow
Agent accepts such appointment, all upon the terms and conditions set forth in
this Agreement.
3. Administration. It is agreed that the Escrow Agent shall have no duties
or responsibilities whatsoever under the Equity Option Agreement or this
Agreement except as specifically provided herein; that in the absence of its own
negligence the Escrow Agent shall be
1
fully protected and incur no liability to anyone in acting upon any notice,
written request, consent, certificate, document, or other paper reasonably
believed by it to be genuine and to be signed or sent by the proper persons;
that the Escrow Agent shall be responsible only for the performance of its own
obligations under the Equity Option Agreement and this Agreement; and that the
Escrow Agent shall be under no obligation to commence, continue or defend any
suit or proceeding in connection with the Equity Option Agreement or this
Agreement unless requested to do so by the parties hereto and indemnified to its
satisfaction.
4. Expense of Escrow Agent. The Escrow Agent shall not be paid a fee for
acting as Escrow Agent under the Equity Option Agreement and this Agreement. The
Escrow Agent shall not be liable for any claims, suits, actions, costs, damages,
liabilities or expenses (collectively, the "Liabilities") in connection with the
performance of its duties under the Equity Option Agreement or this Agreement
other than Liabilities caused by the negligence or willful misconduct of the
Escrow Agent, and Brookdale hereby agrees to indemnify and hold harmless the
Escrow Agent from and against any and all Liabilities arising from or in
connection with any acts or omissions taken by the Escrow Agent in connection
with the Equity Option Agreement or this Agreement, other than those Liabilities
caused by the negligence or willful misconduct of the Escrow Agent.
5. Termination of Agreement. This Agreement shall terminate upon the
earlier to occur of (a) the performance of the duties of the Escrow Agent under
the Equity Option Agreement, and (b) the Option Termination Date. If the Closing
shall not have occurred on or prior to the Option Termination Date, the Escrow
Agent shall redeliver the Assignment to the Investor.
6. Replacement of Escrow Agent. The Escrow Agent may resign, or the
Investor and Brookdale may agree to discharge the Escrow Agent, from its
obligations under the Equity Option Agreement and this Agreement at any time,
but in no event shall the Escrow Agent be released of its obligations under the
Equity Option Agreement and this Agreement unless and until a substitute escrow
agent has been designated and assumed its obligations.
7. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois (without giving effect to
principles of conflicts of law).
8. 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 be deemed to be one and the same instrument.
9. Notices. Any notices required or permitted to be sent hereunder shall be
delivered personally or by telecopier (with answer back acknowledged) or mailed,
certified mail, return receipt requested, or delivered by overnight courier
service to the following addresses, or such other addresses as shall be given by
notice delivered hereunder, and shall be deemed to have been given upon
delivery, if delivered personally, upon receipt with answer back acknowledged,
if
2
delivered by telecopier, three (3) business days after mailing, if maiLed,
or one business day after delivery to the courier, if delivery by overnight
courier service:
If to the
Investor: AH Texas Investor, Inc.
000 Xxxx xx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxx
Fax: (000) 000-0000
If to Brookdale: Brookdale Living
Communities, Inc.
00 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxx, Xx.
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxxx
Fax: (000) 000-0000
with a copy to: Winston & Xxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx
Fax: (000) 000-0000
If to the Escrow Agent: Squire, Xxxxxxx & Xxxxxxx
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attn: Xxxxx X. Xxxx
Fax: (000) 000-0000
10. Brookdale may assign its rights hereunder in connection with an
assignment of its rights under the Equity Option Agreement in accordance with
the provisions of paragraph (e) of Section 18 thereof.
11. Amendment. This Agreement may be amended only by a written instrument
executed by all parties hereto.
3
IN WITNESS WHEREOF, the undersigned have executed and
delivered this Agreement as of the date first above written.
AH TEXAS INVESTOR, INC.
By:___________________________
Name: Xxxxx X. Xxxxxxx
Its: President
BROOKDALE LIVING COMMUNITIES, INC.
By:___________________________
Name:_________________________
Its:____________________________
SQUIRE, XXXXXXX & XXXXXXX
By:______________________________
Name:____________________________
Its:_______________________________
4