Brookdale Provident Properties, LLC Chicago, Illinois 60611 March 28, 2005
Exhibit
10.19
Brookdale
Provident Properties, LLC
000 Xxxxx
Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxxxxx 00000
Xxxxx 00,
0000
XXXX BLC
Properties Holdings, LLC
000
Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxxxxxxxx,
Xxx Xxxxxx 00000
Attention:
General Counsel
Ladies
and Gentlemen:
Reference
is made to the Agreement Regarding Leases dated October 19, 2004 (as amended,
altered or modified from time to time, the “ARL
Agreement”), by
and between, among others, PSLT-BLC Properties Holdings, LLC (“PSLT-BLC
Holdings”) and
Brookdale Provident Properties, LLC (“BLC
Holdings”).
Capitalized terms used but not defined herein shall have the respective meanings
ascribed thereto in the ARL Agreement.
1. BLC
Holdings hereby irrevocably waives (collectively, the “Waivers”): (a)
all of its rights under Paragraph
14 of the
ARL Agreement with respect to any and all of the Facilities and the Ownership
Interests; and (b) all of its rights under Paragraph
35 of the
ARL Agreement with respect to any and all facilities that Provident Senior
Living Trust, PSLT-BLC Properties Holdings or any of their respective
Subsidiaries may from time to time acquire. Each of BLC Holdings and its
Affiliates hereby forever releases PSLT-BLC Holdings from its obligations under
Paragraphs
14 and
35 of the
ARL Agreement.
2. As of the
effective date of the Waivers and in lieu of Paragraph
14 of the
ARL Agreement, PSLT-BLC Holdings hereby grants to BLC Holdings a right of first
refusal with respect to the Facilities and the Ownership Interests on the terms
and subject to the conditions set forth in Schedule
A
hereto.
3. This
letter is being executed by PSLT-BLC Holdings at the request of BLC Holdings.
This letter shall not amend, alter or modify in any way any of the obligations
of the Net Tenants under the Property Leases nor does Provident or any of its
Affiliates waive any provision of any of the Property Leases or any rights that
they may have thereunder. Except as expressly provided herein, all of the terms
and provisions of the ARL Agreement shall remain in full force and effect and no
amendment, alteration or modification thereto is made (nor does any party hereto
waive any provision of the ARL Agreement or any right that it may have
thereunder).
4. This
letter shall be governed by, and construed and interpreted in accordance with,
the laws of the State of New York without giving effect to any conflicts of law
principles of such state that might refer the governance, construction or
interpretation of such agreements to the laws of another
jurisdiction.
BROOKDALE
PROVIDENT PROPERTIES, LLC
|
By: |
/s/ R. Xxxxxxx Xxxxx | |
R.
Xxxxxxx Xxxxx
Vice
President
Acknowledged
and agreed as of
the date
first written above:
PSLT-BLC
PROPERTIES HOLDINGS, LLC
By: PSLT OP,
L.P.,
a
Delaware limited partnership,
its sole
member
By: PSLT GP,
LLC,
a
Delaware limited liability company,
its sole
general partner
a
Maryland real estate
investment
trust,
its sole
member
|
By: |
/s/ Xxxx X. Xxxxx | |
Xxxx X.
Xxxxx
Senior
Vice President
Solely as
to Paragraph (c) of Schedule
A attached
hereto:
|
By: |
/s/ Xxxx X. Xxxxx | |
Xxxx X.
Xxxxx
Senior
Vice President
Copies
to:
Brookdale
Living Communities, Inc.
000 X.
Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxxxxx 00000
Attention:
General Counsel
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
Xxxxx,
Xxxxxx, MacKay & Xxxxxxxxxx, P.C.
000 Xxxxx
Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx,
Xxxxxxxx 00000
Attention:
Xxxxxxx X. Xxxxxxx, Esq.
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
Sidley
Xxxxxx Xxxxx & Xxxx LLP
000
Xxxxxxx Xxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxx Xxxxxxx, Esq.
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
Schedule
A
Right
of First Refusal
(a) Right
of First Refusal. Subject
to Paragraph
(c) of this
Schedule
A and the
rights of any Facility Mortgagee at such time to consent to or otherwise approve
any such purchase, and provided that there is neither an Event of Default
existing under the ARL Agreement nor a Management Termination Event existing
under Paragraph
28(a)(ii) of the
ARL Agreement at any of the following times: (x) the time that PSLT-BLC Holdings
delivers the ROFR Notice (as defined below), (y) the time that BLC Holdings
delivers the Purchase Notice (as defined below) or (z) the time of the Option
Closing (as defined below), then, during and only during the Initial Term, if
PSLT-BLC Holdings shall receive a bona fide third party offer which it desires
to accept (the “Offer”) to
purchase any or all of the Facilities that are subject to Property Leases and
the ARL Agreement (the Facilities subject to such Offer being referred to
hereinafter as the “Purchase
Notice Facilities”) (A)
PSLT-BLC Holdings shall give written Notice of such Offer to BLC Holdings within
ten (10) days after it decides it wishes to accept such offer, together with a
copy of the Offer (the “ROFR
Notice”), which
ROFR Notice shall state the purchase price for each of the Purchase Notice
Facilities covered by such Offer (the “Purchase
Price”) and
the other conditions, if any, on which the sale contemplated by the Offer is to
be effected, and (B) BLC Holdings shall have the right (the “ROFR”),
exercisable by irrevocable written Notice to PSLT-BLC Holdings within five (5)
days following receipt of the Purchase Notice (the “Purchase
Notice”), to
purchase all but not fewer than all of the Purchase Notice Facilities for the
applicable Purchase Price and, except as otherwise expressly provided in
Paragraph
(b) of this
Schedule
A,
otherwise on the same terms and conditions set forth in the Purchase Notice (or
to purchase PSLT-BLC’s Holdings’ limited liability company interests,
partnership interests or other owner interests in the Provident Lessors under
the Property Leases affecting such Purchase Notice Facilities (the “Ownership
Interests”) on
such terms and conditions), in each case, subject to the Facility Mortgages. If
BLC Holdings fails to deliver the Purchase Notice within such five (5) day
period, BLC Holdings will be deemed to have declined to exercise its rights
under this Schedule
A with
respect to the Offer. Within three (3) Business Days following the delivery of
the Purchase Notice, BLC Holdings shall cause to be delivered to PSLT-BLC
Holdings a non-refundable (except as provided below) deposit in the amount of
two percent (2%) of the Purchase Price, which amount shall be payable in
immediately available funds. If BLC Holdings fails to deliver the Deposit within
such three (3) Business Day period, BLC Holdings will be deemed to have declined
to exercise its rights under this Schedule
A with
respect to the Offer. The closing (the “Option
Closing”) of the
purchase of the Purchase Notice Facilities (or the applicable Ownership
Interests) specified in a Purchase Notice shall occur as promptly as practicable
following the delivery of the Purchase Notice, but in no event later than sixty
(60) days following the date of delivery of such Purchase Notice (the
“Outside
Closing Date”). The
date on which the Option Closing occurs is herein referred to as the Option
Closing Date. If BLC Holdings timely delivers the Purchase Notice under this
Paragraph
(a) of this
Schedule
A, then,
on the Option Closing Date, PSLT-BLC Holdings shall cause the Provident Lessors
to transfer to BLC Holdings or its designee all of the Provident Lessors’ right,
title and interest in and to the Purchase Notice Facilities (or PSLT-BLC
Holdings shall transfer the applicable Ownership Interests) upon receipt by
PSLT-BLC Holdings of the Purchase Price, in accordance with Paragraph
(b) of this
Schedule
A;
provided,
however,
that, if the
Option Closing does not occur prior to or on the Outside Closing Date, (i)
PSLT-BLC Holdings shall have no obligation to transfer any of the Purchase
Notice Facilities to BLC Holdings, (ii) if the Option Closing did not occur as a
result of any failure of the conditions specified in clauses (iv)(A), (v)(A) and
(only with respect to the inability of BLC Holdings to procure a title insurance
policy of the type described in the last sentence thereof) (viii) of
Paragraph
(b) of this
Schedule
A,
PSLT-BLC Holdings shall refund the Deposit to BLC Holdings and (iii) subject to
clause (ix) of Paragraph
(b) of this
Schedule
A, BLC
Holdings shall continue to have its rights under this Schedule
A with
respect to the Purchase Notice Facilities as if the Offer was never made. If BLC
Holdings declines (or is otherwise deemed to have declined) to exercise its
rights under this Schedule
A with
respect to the Offer, PSLT-BLC Holdings may sell the Purchase Notice Facilities
substantially on the same terms and conditions set forth in the ROFR Notice
(provided that the purchase price to be paid in such transaction is at least 95%
of the Purchase Price specified in the ROFR Notice), and BLC Holdings shall have
no rights under this Schedule
A with
respect to such sale. If the Purchase Notice Facilities are not sold pursuant to
the Offer or as otherwise as permitted by this Schedule
A, BLC
Holdings shall continue to have its rights under this Schedule
A with
respect to the Purchase Notice Facilities as if the Offer was never made.
Notwithstanding the foregoing, PSLT-BLC Holdings may at any time prior to the
Option Closing solicit offers from third parties to purchase, and consummate any
purchase and sale of, the Purchase Notice Facilities (or the applicable
Ownership Interests) covered by a Purchase Notice, including pursuant to the
Offer, and BLC Holdings shall have no rights under this Schedule
A with
respect to any such offer or any such purchase and sale; provided,
however, that
PSLT-BLC Holdings shall pay to BLC Holdings an amount equal to two (2) times the
Deposit (which payment includes a refund of the Deposit), in immediately
available funds, concurrently with the consummation of such purchase and sale to
a third party.
(b) Provisions
Relating to the Exercise of Right of First Refusal. In
connection with BLC Holdings’ exercise of the ROFR to purchase the Purchase
Notice Facilities or the applicable Ownership Interests in accordance with
Paragraph
(a) of this
Schedule
A, the
following shall apply to the Option Closing:
(i) Either
(A) the Provident Lessors shall execute and deliver to BLC Holdings (or to BLC
Holdings’ designee) at BLC Holdings’ cost and expense a special warranty deed
with respect to each of the Purchase Notice Facilities, a xxxx of sale with
respect to the Related Personal Property (as defined in the Property Leases) and
any other assignment or agreement transferring all right, title and interest of
the Provident Lessors in the Purchase Notice Facilities, including, without
limitation, any contracts, agreements and/or documents related in any manner to
the operation of the Purchase Notice Facilities, in each case in recordable form
in the relevant jurisdiction, if required, but with no representation or
warranty of any kind by any Provident Lessor except as to the absence of any
Liens attributable to any Provident Lessor (other than any Facility Mortgages),
or (B) PSLT-BLC Holdings shall execute and deliver an assignment of Ownership
Interests with respect to each Provident Lessor of the Purchase Notice
Facilities, but with no representation or warranty of any kind by any PSLT-BLC
Holdings except as to the absence of any Liens attributable to PSLT-BLC Holdings
(other than any Facility Mortgages);
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(ii) The
Purchase Notice Facilities or the applicable Ownership Interests shall be
conveyed to BLC Holdings or its designee “AS IS” and in their then present
condition. PSLT-BLC Holdings and the Provident Lessors each hereby specifically
disclaims any warranty (oral or written) concerning: (A) the nature and
condition of the Purchase Notice Facilities and the suitability thereof for any
and all activities and uses that BLC Holdings or its designee or any tenant or
occupant may elect to conduct thereon; (B) the manner, construction, condition
and state of repair or lack of repair of any improvements located thereon; (C)
the nature and extent of any right-of-way, lien, encumbrance, license,
reservation, condition or otherwise; (D) the compliance of the Purchase Notice
Facilities or their operation with any laws, rules, ordinances, or regulations
of any government or other body; and (E) any other matter whatsoever (EACH OF
BLC HOLDINGS AND THE BROOKDALE LESSEES EXPRESSLY ACKNOWLEDGES THAT, IN
CONSIDERATION OF THE AGREEMENTS OF PSLT-BLC HOLDINGS HEREIN, PSLT-BLC HOLDINGS
AND THE PROVIDENT LESSORS MAKE NO WARRANTY OR REPRESENTATION, EXPRESS OR
IMPLIED, OR ARISING BY OPERATION OF LAW, TO OR FOR THE BENEFIT OF BLC HOLDINGS
OR ANY OF THE BROOKDALE LESSEES AND CONCERNING ALL OR ANY PORTION OF THE
PURCHASE NOTICE FACILITIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTY OF
QUANTITY, QUALITY, CONDITION, HABITABILITY, MERCHANTABILITY, SUITABILITY OR
FITNESS FOR A PARTICULAR PURPOSE OF ALL OR ANY PORTION OF THE PURCHASE NOTICE
FACILITIES, ANY IMPROVEMENTS LOCATED THEREON, AND ANY SOIL CONDITIONS RELATED
THERETO. EACH OF BLC HOLDINGS AND THE BROOKDALE LESSEES SPECIFICALLY
ACKNOWLEDGES AND AGREE THAT IT IS NOT RELYING
ON (AND PSLT-BLC HOLDINGS AND THE PROVIDENT LESSORS HEREBY DISCLAIM AND
RENOUNCE) ANY REPRESENTATIONS, WARRANTIES OR COVENANTS OF ANY KIND OR NATURE
WHATSOEVER MADE BY, OR ON BEHALF OF, PSLT-BLC HOLDINGS OR THE PROVIDENT LESSORS
AND RELATING TO ALL OR
ANY PORTION OF THE PURCHASE NOTICE FACILITIES OTHER THAN THE SPECIAL WARRANTIES
CONTAINED IN THE DEED, IF ANY);
(iii) PSLT-BLC
Holdings and the Provident Lessors shall execute and deliver to BLC Holdings or
its designee and to the title insurance company issuing title insurance in
connection with such transaction a customary title affidavit in form and
substance reasonably acceptable to PSLT-BLC Holdings, the applicable Provident
Lessor and the title insurance company, including, without limitation, with
respect to the absence of Liens attributable to PSLT-BLC Holdings or the
Provident Lessors (other than any Facility Mortgages);
3
(iv) If BLC
Holdings or its designee assumes any Facility Mortgage in connection with the
purchase of the Purchase Notice Facilities or the applicable Ownership
Interests, (A) BLC Holdings or its designee shall provide all information
requested by any Facility Mortgagee in connection with any consents required
under the applicable Facility Mortgages and shall obtain any such consents in
advance of the Option Closing (and PSLT-BLC Holdings shall use commercially
reasonable efforts to cooperate with same), it being intended that obtaining
such consents shall be a condition to the Option Closing, (B) PSLT-BLC Holdings
shall, or shall cause the applicable Provident Lessors to, execute and deliver
such assignments of the applicable Facility Mortgages (including, without
limitation, all rights in and to any reserve or escrow held by the applicable
Facility Mortgagee (except for principal reserve escrows)) as shall be necessary
to evidence the applicable Provident Lessor’s assignment of, and the applicable
assignee’s assumption of, the applicable Facility Mortgages, (C) BLC Holdings
shall pay or cause to be paid all costs and expenses in connection with
obtaining the applicable Facility Mortgage consents and in connection with the
assignment and assumption of the applicable Facility Mortgage, including,
without limitation, assumption fees, rating agency fees, reasonable attorneys’
fees (of the applicable Facility Mortgagees, any rating agencies, BLC Holdings
and PSLT-BLC Holdings) and any premiums, fees or penalties incurred in
connection therewith, and (D) BLC Holdings shall receive a credit against the
Purchase Price in an amount equal to (x) the outstanding principal balance of
the applicable Facility Mortgages assumed less (y) any principal reserve escrows
which are and shall at all times remain the property of PSLT-BLC Holdings or the
applicable Provident Lessor. PSLT-BLC Holdings or the applicable Provident
Lessors shall assign to BLC Holdings or its designee all rights and interests in
and to any escrow reserves (other than principal reserve escrows) then held by
the applicable Facility Mortgagee(s) which have been funded by BLC Holdings or
the applicable Brookdale Lessee for application to future payments under such
Facility Mortgage(s);
(v) Should
BLC Holdings or its designee cause the repayment, prepayment or defeasance of
any Facility Mortgage in connection with the purchase of the Purchase Notice
Facilities or the applicable Ownership Interests, (A) BLC Holdings shall be
obligated to procure, in advance of the Option Closing, from the applicable
Facility Mortgagees or the trustee in any securitization in which any Facility
Mortgage is included, any and all release or defeasance documents necessary in
connection with such repayment, prepayment of defeasance, as the case may be
(and PSLT-BLC Holdings shall use commercially reasonable efforts to cooperate
with same), it being intended that obtaining such release or defeasance
documents shall be a condition to the Option Closing, (B) BLC Holdings shall pay
or cause to be paid all costs and expenses in connection with such repayment,
prepayment or defeasance, as the case may be, including, without limitation,
prepayment penalties or premiums, any deposits required in connection with a
defeasance, rating agency fees, reasonable attorneys’ fees (of the applicable
Facility Mortgagees, any trustee in a securitization, any rating agencies, BLC
Holdings and PSLT-BLC Holdings) and any other premiums, fees or penalties
incurred in connection therewith, and (C) BLC Holdings shall indemnify PSLT-BLC
Holdings, the applicable Provident Lessors and their respective directors,
employees and agents from and against any and all claims relating to or arising
out of any such prepayment, repayment or defeasance. The indemnity provisions of
this Paragraph
(b) shall
survive the termination of this Schedule
A and the
ARL Agreement;
4
(vi) PSLT-BLC
Holdings shall execute such other documents reasonably requested by BLC Holdings
or its designee or otherwise required by applicable law, to effect a transfer of
the Purchase Notice Facilities or the applicable Ownership Interests and title
thereto;
(vii) To the
extent applicable, PSLT-BLC Holdings and BLC Holdings shall apportion any costs
or expense items relating to the Purchase Notice Facilities, whether real estate
taxes, operating expenses or otherwise, taking into account that if and to the
extent that, as of the Option Closing, PSLT-BLC Holdings or any Provident Lessor
has paid any bills for any ownership expenses incurred (prior to the Option
Closing) in connection with the ownership and operation of the Purchase Notice
Facilities and, under the terms of the applicable Property Leases, any Brookdale
Lessee would be required to reimburse the applicable Provident Lessor for some
or all of such expenses, then at the Option Closing, BLC Holdings shall be
required to pay to PSLT-BLC Holdings, in addition to the Purchase Price, any
such accrued operating expenses (including, but not limited to, real estate
taxes) for which the Brookdale Lessees are responsible under the applicable
Property Leases; provided,
further,
however, that
PSLT-BLC Holdings or the applicable Provident Lessors shall assign or cause to
be assigned and promptly delivered, without adjustment to the Purchase Price,
any real estate tax, insurance or capital expenditures impounds, escrows or
reserves (other than principal reserve escrows) which have been funded by BLC
Holdings or the applicable Brookdale Lessees and which are held by PSLT-BLC
Holdings, any Provident Lessors or any Facility Mortgagee;
(viii) BLC
Holdings shall pay any and all costs and expenses, of any nature whatsoever,
incurred in connection with the consummation of any purchase pursuant to this
Schedule
A,
including, without limitation, reasonable attorneys’ fees (of BLC Holdings and
PSLT-BLC Holdings), any title search fees, title insurance commitment fees, the
cost of any title insurance policy, any transfer taxes, any recording fees,
mortgage or documentary taxes or stamps, any brokerage commissions, closing or
escrow fees, and survey costs. BLC Holdings acknowledges, however, that PSLT-BLC
Holdings has no obligation to deliver title insurance (or pay any premium for
title insurance) or a survey of any of the Purchase Notice Facilities to BLC
Holdings, provided that it shall be a condition precedent to closing that BLC
Holdings or its designee, at its election, is able to procure a title insurance
policy for each Facility insuring title in the name of BLC Holdings or its
designee, as applicable, absent monetary liens attributable to PSLT-BLC Holdings
and the Provident Lessors (other than any Facility Mortgages);
(ix) If BLC
Holdings fails timely to perform or satisfy any of its obligations imposed under
this Schedule
A with
respect to any Purchase Notice, including, but not limited to, its obligation to
timely consummate the purchase of the Purchase Notice Facilities by the Outside
Closing Date (for any reason other than a default by PSLT-BLC Holdings under
this Schedule
A), then
the ARL Agreement and the Property Leases shall continue; provided,
however, that
this Schedule
A shall
terminate and be of no further force and effect with respect to any and all
Facilities (whether or not then a Purchase Notice Facility), and BLC Holdings
shall reimburse PSLT-BLC Holdings for all reasonable out-of-pocket costs and
expenses incurred by PSLT-BLC Holdings and/or any Provident Lessor subsequent to
BLC Holdings giving the applicable Purchase Notice;
5
(x) At all
times from the date on which BLC Holdings delivers the Purchase Notice until the
Option Closing, the ARL Agreement and the applicable Property Leases shall
remain in full force and effect. Upon the consummation of the Option Closing
pursuant to this Schedule
A, at the
option of BLC Holdings or its designee, (A) the Provident Lessors shall assign
all of their right, title and interest in the applicable Property Leases to BLC
Holdings or its designee, as applicable, and (B) the ARL Agreement with respect
to the transferred Purchase Notice Facilities and the applicable Property Leases
shall be terminated by the parties except for those specific provisions which,
by their express terms, survive such a termination, provided,
however, that
the Provident Lessors shall not have any obligation to assign their interests as
provided in clause (A) of this Paragraph
(b)(x) unless
BLC Holdings or its designee and the Brookdale Lessees deliver to PSLT-BLC
Holdings and the Provident Lessors a release of their respective obligations
under the Property Leases and the ARL Agreement with respect to the transferred
Purchase Notice Facilities, in form and substance acceptable to PSLT-BLC
Holdings and the Provident Lessors.
(c) Limited
Application.
Notwithstanding anything to the contrary in the ARL Agreement or this
Schedule
A, this
Schedule
A applies
solely to direct sales to third parties of (i) any or all of the Facilities and
(ii) all or substantially all of the Ownership Interests of any of the Provident
Lessors that is subject to a Property Lease and the ARL Agreement and PSLT-BLC
Holdings; it being understood that this Schedule
A shall
not apply to any indirect transfers of the Facilities and the Ownership
Interests (except for the direct transfer of all or substantially all of the
limited liability company interests of PSLT-BLC Holdings), whether achieved
through (x) any sale, transfer or other disposition of capital stock or other
ownership interest or securities, or all or substantially all of the assets of,
PSLT OP, L.P. (including, without limitation, pursuant to any merger,
consolidation, conversion or other similar transaction), or (y) any sale,
transfer or other disposition of capital stock or other ownership interest or
securities, or all or substantially all of the assets of, Provident Senior
Living Trust (including, without limitation, pursuant to any merger,
consolidation, conversion or other similar transaction), or to any transfer,
whether direct or indirect, among Affiliates of Provident Senior Living
Trust.
Provident Senior Living Trust hereby agrees that to the extent that the
Facilities are transferred to any other direct or indirect subsidiary of
Provident Senior Living Trust, such Facilities and the Ownership Interests
therein shall remain subject to the terms of this Schedule
A.
6
