EXHIBIT 10.1
[Boynton Beach, Florida]
[Cleveland, Ohio]
[Delray, Florida]
[Jacksonville, Florida]
[Houston, Texas]
[San Antonio, Texas]
[Victoria, Texas]
SECOND AMENDMENT TO MASTER LEASE (PHASE I)
THIS SECOND AMENDMENT TO MASTER LEASE (PHASE I) (this
"Amendment") is dated as of February 28, 2003 (the "Effective Date"), by and
between HEALTH CARE PROPERTY INVESTORS, INC., a Maryland corporation ("HCPI"),
and TEXAS HCP HOLDING, L.P., a Delaware limited partnership("THCP")
(collectively, as their interests may appear, "Lessor"), and ARC RICHMOND
HEIGHTS, LLC, a Tennessee limited liability company ("Richmond"), ARC SHAVANO,
L.P., a Tennessee limited partnership ("Shavano"), ARC DELRAY BEACH, LLC, a
Tennessee limited liability company ("Delray"), ARC VICTORIA , L.P., a Tennessee
limited partnership ("Victoria"), ARC CARRIAGE CLUB OF JACKSONVILLE, INC., a
Tennessee corporation ("Jacksonville"), ARC POST OAK, L.P., a Tennessee limited
partnership ("Post Oak"), and ARC BOYNTON BEACH, LLC, a Tennessee limited
liability company ("Boynton Beach"). Richmond, Shavano, Delray, Victoria,
Jacksonville and Post Oak shall sometimes be referred to herein, collectively
and jointly and severally, as "Original Lessee," and, collectively and jointly
and severally with Boynton Beach, as "Lessee."
RECITALS
A. Lessor is the "Lessor," and Original Lessee is the
"Lessee" pursuant to that certain Master Lease dated as of March 29, 2002 (the
"Original Lease"), as amended by that certain First Amendment to Lease dated as
of September 30, 2002 (the "First Amendment," and together with the Original
Lease, the "Lease"), covering the Leased Property of three (3) separate assisted
living facilities located in Cleveland, Ohio, Delray, Florida, and San Antonio,
Texas, two (2) separate congregate care facilities located in Houston, Texas,
and Jacksonville, Florida, and one (1) mixed congregate care and assisted living
facility located in Victoria, Texas, all as more particularly described in the
Lease. All capitalized terms used in this Amendment and not defined or modified
herein shall have the meanings assigned to such terms in the Lease.
B. HCPI, as Buyer, and American Retirement Corporation,
as Seller, are also parties to that certain Contract of Acquisition of even date
herewith (the "Boynton Beach Contract of Acquisition"), pursuant to which HCPI
is purchasing and acquiring on the Boynton Beach Closing Date (as defined below)
certain real and personal property situated in the City of Xxxxxxx Xxxxx, Xxxxxx
xx Xxxx Xxxxx, Xxxxx of Florida, comprising an assisted living facility having
approximately 78 assisted living units and 17 memory impaired (Alzheimer's)
units (the "Boynton Beach Facility"), all as more particularly described in the
Boynton Beach Contract of Acquisition. A legal description of the Land
associated with the Boynton Beach Facility is attached hereto as Exhibit A-7 and
incorporated herein by this reference.
C. Effective immediately upon the Boynton Beach Closing
Date, Lessor desires to add to the Leased Property and lease to Lessee and
Lessee desires to lease and hire from Lessor, the Boynton Beach Facility.
X. Xxxxxx and Lessee desire to amend the Lease to
reflect the foregoing addition of the Boynton Beach Facility to the Leased
Property, but only upon the terms and conditions set forth herein.
AMENDMENT
NOW, THEREFORE, in consideration of the foregoing and other
good and valuable consideration, receipt of which is hereby acknowledged, the
parties hereto hereby agree as follows:
1. Leasing.
(a) Effective as of the Effective Date, Lessor
hereby leases to Lessee and Lessee hereby hires from Lessor, the Leased Property
of the Boynton Beach Facility upon all of the terms and conditions set forth in
the Lease, as amended by this Amendment. All references herein and in the Lease
to a "Facility" or "Facilities" shall mean each Facility (as defined in the
Lease) together with the Boynton Beach Facility.
(b) Lessee shall hold and occupy the Boynton
Beach Facility subject to and upon all the terms and provisions of the Lease, as
hereby amended, applicable to the Leased Property.
2. Modifications to Terms of the Lease. Effective as of
the Effective Date, the Lease shall be amended and supplemented in the following
particulars:
(a) New Definitions. Except as otherwise
expressly provided or unless the context otherwise requires, for all purposes of
the Lease, as hereby amended, the terms defined in this Section 2(a) shall have
the meanings assigned to them as provided below and shall be added to Article II
of the Original Lease to read, in their entireties, as follows:
Boynton Beach: ARC Boynton Beach, LLC, a Tennessee
limited liability company.
Boynton Beach Closing Date: The "Closing Date" as
defined in the Boynton Beach Contract of Acquisition.
Boynton Beach Commencement Date: The Boynton Beach
Closing Date.
Boynton Beach Contract of Acquisition: As defined in
Recital B above.
Boynton Beach Facility: As defined in Recital B
above.
(b) Amended and Restated Definitions. The
following definitions appearing in Article II of the Lease shall be amended and
restated, in their entireties, as indicated:
Closing Date: With respect to the Boynton Beach
Facility, the Boynton Beach Closing Date and with respect to each other
Facility, as defined in the Contract of Acquisition.
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Commencement Date: With respect to the Boynton Beach
Facility, the Boynton Beach Commencement Date and with respect to each
other Facility, the Closing Date.
Contracts of Acquisition: With respect to the Boynton
Beach Facility, the Boynton Beach Contract of Acquisition and with
respect to each other Facility, that certain Contract of Acquisition
dated as of March 29, 2002 by and between Lessor, on the one hand, and
certain Affiliates of Lessee, on the other hand, relative to the
acquisition by Lessor of the Leased Property of each Facility other
than the Boynton Beach Facility and the Victoria Facility.
Earn-Out Amounts: As defined in the applicable
Contract of Acquisition, respectively, except that in no event shall
Lessee or any Affiliate of Lessee be entitled to receive an Earn-Out
Amount on account of the Shavano Park Facility.
Earn-Out Facilities: Each of the Cleveland Facility,
the Delray Facility and the Boynton Beach Facility.
Fixed Term: For all Facilities other than the
Victoria Facility, the period of time commencing on the applicable
Commencement Date for such Facility and ending at 11:59 p.m. Los
Angeles time on March 31, 2017. For the Victoria Facility, the period
of time commencing on the Commencement Date for such Facility and
ending at 11:59 p.m. Los Angeles time on July 31, 2011.
Lease Year: With respect to each Facility other the
Victoria Facility, the period commencing April 1 of each year and
ending March 31 of the following year; provided, however, that if the
Commencement Date of any such Facility is not April 1, then there shall
be a partial Lease Year from such Commencement Date to March 31 of the
year in which the applicable Commencement Date occurs. With respect to
the Victoria Facility, each period beginning August 1 and ending July
31 of the following year; provided, however, that the period from the
Commencement Date for such Facility through July 31, 2002 shall be a
partial Lease Year.
Lessee: As defined in the preamble; provided,
however, that it is agreed and understood by all parties hereto that,
with respect to each Facility, only the License Holder with respect to
such Facility shall be entitled to operate or maintain such Facility,
and in no event shall any Lessee other than the applicable License
Holder with respect to such Facility be entitled to operate or maintain
such Facility or take other actions with respect to such Facility to
the extent that such operations or the taking of such actions would
violate the licensure requirements or other laws or regulations of any
governmental authority with respect to such Facility. Notwithstanding
the foregoing, nothing herein shall affect the joint and several
liability of the Lessees.
Letter of Credit Amount: Four Million Three Hundred
Sixty-Five Thousand, Six Hundred Twenty-Five Dollars ($4,365,625) plus
the Victoria Letter of Credit Amount.
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License Holder: With respect to any Facility, the
Lessee that holds all permits, licenses, approvals, entitlements and
other authorizations issued by governmental authorities necessary to
operate such Facility for its Primary Intended Use.
Primary Intended Use: With respect to each Facility,
the Primary Intended Use set forth on Exhibit B attached hereto and
incorporated by this reference with respect to such Facility and such
other uses necessary or incidental to such use.
3. Assumption of Lease by Boynton Beach Jointly and
Severally. By its signature hereto, Boynton Beach assumes the obligations of
"Lessee" under the Lease, as hereby amended, jointly and severally with those
Persons comprising Original Lessee.
4. Cash Security Deposit In Lieu of Increased Letter of
Credit.
(a) Deposit. Pursuant to Article XXI of the
Original Lease, Lessee obtained and delivered to Lessor a letter of
credit in the amount of $4,000,000.00 plus the Victoria Letter of
Credit Amount (the "Original Letter of Credit Amount"). Pursuant to
this Amendment, the Letter of Credit Amount has been increased to
$4,365,625.00 plus the Victoria Letter of Credit Amount. Such increase
(i.e., $365,625.00) shall be referred to herein as the "Increased
Letter of Credit Amount." Notwithstanding anything to the contrary in
the Lease, as hereby amended, Lessee shall have the option to either
increase the letter of credit previously delivered to Lessor to the new
Letter of Credit Amount or deposit with Lessor cash (the "Cash Security
Deposit") in the amount equal to the Increased Letter of Credit Amount;
provided, however, that nothing herein shall relieve Lessee of its
obligation to provide a letter of credit in accordance with Article XXI
of the Lease (i.e., equal to the full Letter of Credit Amount), as
amended by this Amendment, upon the earlier of (i) the reduction in the
Letter of Credit Amount pursuant to Section 21.4 of the Lease or (ii)
after March 31, 2004; provided, further, that if, prior to March 31,
2004, the Letter of Credit Amount is reduced pursuant to Section 21.4
(the Letter of Credit Amount after such reduction is referred to herein
as the "Reduced Letter of Credit Amount") and such reduction does not
reduce the Letter of Credit Amount below the Original Letter of Credit
Amount, Lessee may elect to either (i) provide a new letter of credit
in the Reduced Letter of Credit Amount, in which case Lessee shall
return the entire Cash Security Deposit to Lessee or (ii) require
Lessor to return to Lessee the portion of the Cash Security Deposit
equal to the difference between the Increased Letter of Credit Amount
and the Reduced Letter of Credit Amount.
(b) Uses. The Cash Security Deposit, if any,
shall be held as collateral for Lessee's obligations under the Lease,
as hereby amended, and may be used by Lessor only for the same purposes
for which Lessor is authorized to draw upon a letter of credit pursuant
to Article XXI of the Lease. Lessor shall not be required to keep the
Cash Security Deposit separate from its general funds, and Lessee shall
not be entitled to interest on such Cash Security Deposit. Lessee
acknowledges that Lessor may invest and reinvest the Cash Security
Deposit for Lessor's own account. No notice to Lessee shall be required
to enable Lessor to draw upon such Cash Security Deposit. In the event
of a transfer of Lessor's interest in the Leased Property, Lessor shall
have the right to transfer the Cash Security Deposit to the transferee
and thereupon shall, without any further agreement between the parties,
be released by Lessee from all liability therefor, and it is
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agreed that the provisions hereof shall apply to every transfer or
assignment of such Cash Security Deposit to a new Lessor. The Cash
Security Deposit may be assigned as security in connection with a
Facility Mortgage.
(c) WAIVER. LESSEE WAIVES THE PROVISIONS OF ANY
APPLICABLE LAWS NOW IN FORCE OR THAT BECOME IN FORCE AFTER THE DATE OF EXECUTION
OF THIS LEASE, THAT PROVIDE IN SUBSTANCE THAT LESSOR MAY CLAIM FROM A CASH
SECURITY DEPOSIT ONLY THOSE SUMS REASONABLY NECESSARY TO REMEDY DEFAULTS IN THE
PAYMENT OF RENT, TO REPAIR DAMAGE CAUSED BY LESSEE, OR TO CLEAN THE LEASED
PROPERTY. LESSOR AND LESSEE AGREE THAT LESSOR MAY, IN ADDITION, CLAIM THOSE SUMS
NECESSARY TO COMPENSATE LESSOR FOR ANY OTHER FORESEEABLE OR UNFORESEEABLE ACTUAL
LOSS OR DAMAGE CAUSED BY THE ACT OR OMISSION OF LESSEE OR LESSEE'S OFFICERS,
AGENTS, EMPLOYEES, INDEPENDENT CONTRACTORS, OR INVITEES, INCLUDING, BUT NOT
LIMITED TO THOSE DAMAGES TO WHICH LESSOR IS ENTITLED PURSUANT TO ARTICLE XVI.
Lessee's Initials: s/ RCR
---------------
5. Rent.
(a) In accordance with Section 3.1 of the
Original Lease, the first payment of monthly Allocated Minimum Rent
with respect to the Boynton Beach Facility shall be prorated as to the
partial calendar month in which the Commencement Date for the Boynton
Beach Facility occurs.
(b) Notwithstanding anything in Section 3.1.2 of
the Original Lease to the contrary, the Allocated Minimum Rent for the
Boynton Beach Facility shall not be increased until March 31, 2004.
6. Exhibits and Schedules. Exhibit A-7 attached hereto
is hereby appended to Exhibit A to the Original Lease. Exhibit B attached to the
Original Lease is hereby deleted in its entirety and replaced with Exhibit B
attached hereto. Exhibit F attached to the Original Lease is hereby deleted in
its entirety and replaced with Exhibit F attached hereto. Exhibit G attached to
the Original Lease is hereby deleted in its entirety and replaced with Exhibit G
attached hereto. In addition, Schedule 1 attached hereto is hereby appended to
Schedule 1 to Exhibit C to the Original Lease, as an itemized list of Lessor's
Personal Property with respect to the Boynton Beach Facility.
7. Reaffirmation of Master Lease. Lessor and Lessee
hereby acknowledge, agree and reaffirm that the Lease, as hereby amended, is and
the parties intend the same for all purposes to be treated as a single,
integrated and indivisible agreement. Lessee acknowledges that in order to
induce Lessor to lease the Leased Property of each Facility (including the
Boynton Beach Facility) to Lessee and as a condition thereto, Lessor insisted
that the parties execute the Lease, as hereby amended, covering all of the
Facilities in a single, integrated and indivisible agreement.
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8. Governing Law. THIS AMENDMENT WAS NEGOTIATED IN THE
STATE OF CALIFORNIA, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL
RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY.
ACCORDINGLY, IN ALL RESPECTS THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF CALIFORNIA
(WITHOUT REGARD OF PRINCIPLES OR CONFLICTS OF LAW) AND ANY APPLICABLE LAWS OF
THE UNITED STATES OF AMERICA.
9. Full Force and Effect; Counterparts; Facsimile
Signatures. Except as hereby amended, the Lease shall remain in full force and
effect. This Amendment may be executed in any number of counterparts, all of
which shall constitute one and the same instrument. Telecopied signatures may be
used in place of original signatures on this Amendment, and Lessor and Lessee
both intend to be bound by the signatures of the telecopied document.
[Signatures on Next Page]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the day and year first written above.
"LESSOR"
Signed and delivered in the presence of: HEALTH CARE PROPERTY INVESTORS, INC.,
a Maryland corporation
Witness: /s/ Xxxxx Xxxxx
----------------
Print Name: Xxxxx Xxxxx
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------
Xxxxxx X. Xxxxxxx
Senior Vice President,
General Counsel and Corporate
Secretary
Witness: /s/ Xxxxx X. Xxxx
-----------------
Print Name: Xxxxx X. Xxxx
Signed and delivered in the presence of: TEXAS HCP HOLDING, L.P.,
a Delaware limited partnership
Witness: /s/ Xxxxx Xxxxx
----------------
Print Name: Xxxxx Xxxxx
By: Texas HCP G.P., INC.,
a Delaware corporation,
its sole General Partner
Witness: /s/ Xxxxx X. Xxxx
-----------------
Print Name: Xxxxx X. Xxxx
By: /s/ Xxxxxx X. Xxxxxxx
----------------------
Xxxxxx X. Xxxxxxx
Senior Vice President
[Signature pages continue]
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"LESSEE"
Signed and delivered in the presence of: ARC RICHMOND HEIGHTS, LLC, a
Tennessee limited liability company
Witness: /s/ Xxxx Childress
-------------------
Print Name: Xxxx Childress
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Xxxx X. Xxxxxxx, Senior Vice
President - Strategic Planning
and Investor Relations
Witness: /s/ Xxxxxxxx Xxxxxx
---------------------
Print Name: Xxxxxxxx Xxxxxx
Signed and delivered in the presence of: ARC SHAVANO, L.P., a Tennessee
limited partnership
Witness: /s/ Xxxx Childress
-------------------
Print Name: Xxxx Childress
By: ARC Shavano Park, Inc., a
Tennessee corporation, its general
partner
Witness: /s/ Xxxxxxxx Xxxxxx
--------------------
Print Name: Xxxxxxxx Xxxxxx
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Xxxx X. Xxxxxxx, Senior Vice
President - Strategic Planning
and Investor Relations
Signed and delivered in the presence of: ARC DELRAY BEACH, LLC, a Tennessee
limited liability company
Witness: /s/ Xxxx Childress
-------------------
Print Name: Xxxx Childress
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Xxxx X. Xxxxxxx, Senior Vice
President - Strategic Planning
and Investor Relations
Witness: /s/ Xxxxxxxx Xxxxxx
--------------------
Print Name: Xxxxxxxx Xxxxxx
Signed and delivered in the presence of: ARC VICTORIA, L.P., a Tennessee
limited partnership
Witness: /s/ Xxxx Childress
------------------- By: ARC Homewood Victoria, Inc., a
Print Name: Xxxx Childress Tennessee corporation, its general
partner
Witness: /s/ Xxxxxxxx Xxxxxx
--------------------
Print Name: Xxxxxxxx Xxxxxx
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Xxxx X. Xxxxxxx, Senior Vice
President - Strategic Planning
and Investor Relations
[Signature pages continue]
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Signed and delivered in the presence of: ARC CARRIAGE CLUB OF JACKSONVILLE,
INC., a Tennessee corporation
Witness: /s/ Xxxx Childress
-------------------
Print Name: Xxxx Childress
By: /s/ Xxxx X. Xxxxxxx
----------------------------------
Xxxx X. Xxxxxxx, Senior Vice
President - Strategic Planning and
Investor Relations
Witness: /s/ Xxxxxxxx Xxxxxx
--------------------
Print Name: Xxxxxxxx Xxxxxx
Signed and delivered in the presence of: ARC POST OAK, L.P., a Tennessee
limited partnership
Witness: /s/ Xxxx Childress
-------------------
Print Name: Xxxx Childress
By: ARC Hampton Post Oak, Inc.,
a Tennessee corporation, its
general partner
Witness: /s/ Xxxxxxxx Xxxxxx
--------------------
Print Name: Xxxxxxxx Xxxxxx
By: /s/ Xxxx X. Xxxxxxx
----------------------------------
Xxxx X. Xxxxxxx, Senior Vice
President - Strategic Planning
and Investor Relations
Signed and delivered in the presence of: ARC BOYNTON BEACH, LLC, a Tennessee
limited liability company
Witness: /s/ Xxxx Childress
-------------------
Print Name: Xxxx Childress
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Xxxx X. Xxxxxxx, Senior Vice
President - Strategic Planning
and Investor Relations
Witness: /s/ Xxxxxxxx Xxxxxx
--------------------
Print Name: Xxxxxxxx Xxxxxx
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CONSENT AND REAFFIRMATION OF GUARANTOR
The undersigned Guarantor hereby (i) consents to this
Amendment and (ii) reaffirms to Lessor that its obligations under the Guaranty
of Obligations dated March 29, 2002, remain in full force and effect with
respect to the Lease, as amended hereby.
ARCPI HOLDINGS, INC., a Delaware corporation
By: /s/ Xxxx X. Xxxxxxx
--------------------
Its: SVP
-------------------
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EXHIBIT B
List of Facilities, Facility Description, Allocated Minimum Rent, Allocated
Initial Investment and Lease Rate
INITIAL ALLOCATED
FACILITY DESCRIPTION MONTHLY ALLOCATED INITIAL LEASE
FACILITY AND PRIMARY INTENDED USE MINIMUM RENT INVESTMENT RATE
------------------------- -------------------------------------------- ----------------- -------------- -----
JACKSONVILLE FACILITY Core community located at 0000 Xxxxxxxxxx $262,500.00 $30,000,000.00 10.5%
Drive in Jacksonville, Florida, consisting
of 60 assisted living facility units and 238
independent living beds commonly known as
"Carriage Club of Jacksonville"
POST OAK FACILITY Core community located at 2929 Post Oak $218,750.00 $25,000,000.00 10.5%
Boulevard in Houston, Texas, consisting of
39 assisted living facility units, 149
independent living beds and 56 skilled
nursing beds commonly known as "Hampton at
Post Oak"
RICHMOND HEIGHTS FACILITY Assisted living facility located at Richmond $ 66,562.50 $ 7,100,000.00 11.25%
Road and Hillary Land in Cleveland, Ohio,
consisting of 78 assisted living units and
17 memory enhanced (Alzheimer's) units
commonly known as "Homewood at Richmond
Heights"
DELRAY BEACH FACILITY Assisted living facility located at 8020 W. $ 57,187.50 $ 6,100,000.00 11.25%
Atlantic Avenue in Delray, Florida,
consisting of 54 assisted living units and
32 memory enhanced (Alzheimer's) units
commonly known as "Homewood at Delray Beach"
SHAVANO PARK FACILITY Assisted living facility located at 4096 De $ 46,875.00 $ 5,000,000.00 11.25%
Xxxxxx Road in Antonio, Texas, consisting of
62 assisted living units and 17 memory
enhanced (Alzheimer's) units commonly known
as "Homewood at Shavano Park"
B-1
INITIAL ALLOCATED
FACILITY DESCRIPTION MONTHLY ALLOCATED INITIAL LEASE
FACILITY AND PRIMARY INTENDED USE MINIMUM RENT INVESTMENT RATE
------------------------- -------------------------------------------- ----------------- -------------- -----
VICTORIA FACILITY Mixed congregate care and assisted living $ 53,635.41 $ 4,584,284.00 N/A
facility located at 9806 N.E. Xxx Xxxxx
Parkway in Victoria, Texas, of 60 and 30
units, respectively, commonly known as
"Homewood Residence at Victoria"
BOYNTON BEACH FACILITY Assisted living facility located at 2400 $ 60,937.50 $ 6,500,000.00 11.25%
Xxxxx Xxxxxxxx Xxxxxx xx Xxxxxxx Xxxxx,
Xxxxxxx, consisting of 78 assisted living
units and 17 memory impaired (Alzheimer's)
units commonly known as "Homewood Residence
at Boynton Beach"
B-2
