FIRST AMENDMENT TO LEASE AGREEMENT
Exhibit
10.15
FIRST
AMENDMENT
TO LEASE AGREEMENT
THIS
FIRST AMENDMENT TO LEASE AGREEMENT
(“Amendment”)
is
entered into as of June 29, 2005 (“Effective
Date”),
by
and between CNL
RETIREMENT DSL1 ALABAMA, LP,
a
Delaware limited partnership (“Landlord”)
and
ALABAMA
SOMERBY, LLC,
a
Delaware limited liability company (“Tenant”).
W
I T N E S S E T H
:
WHEREAS,
Landlord, as landlord, and Tenant, as tenant, entered in to that certain Lease
Agreement dated August 25, 2003 (the “Lease”),
whereby Landlord leased to Tenant certain real property and improvements
commonly known as “Xxxxx Farm” and located in Madison County, Alabama, as more
particularly described in Exhibit “A” of the Lease (the “Property”);
and
WHEREAS,
Landlord, Tenant and certain of their affiliates also entered into an Earn
Out
Agreement dated as of August 25, 2003 (the “Earn
Out Agreement”);
and
WHEREAS,
the Earn
Out Agreement entitles Xxxxxx Senior Living, L.L.C. (“Xxxxxx”)
and
American Retirement Corporation (“ARC”
and,
together with Xxxxxx, the “Beneficiaries”)
to
receive additional funds from Landlord upon the meeting of certain conditions,
which have been met; and
WHEREAS,
simultaneously with the execution hereof, Landlord is making a payment to the
Beneficiaries as required under the Earn Out Agreement; and
WHEREAS,
pursuant to paragraph 4(b) of the Earn Out Agreement, upon such payment to
the
Beneficiaries, Landlord and Tenant are to amend the Lease to provide for an
additional rental payment reimbursing Landlord for amounts advanced under the
Earn Out Agreement.
NOW,
THEREFORE,
in
consideration of the mutual covenants herein contained and other good and
valuable consideration, the mutual receipt and legal sufficiency of which are
hereby acknowledged, Landlord and Tenant hereby agree as follows:
13. Recitals.
The
above recitals are true and correct and their terms and provisions are
incorporated herein for all purposes.
14. The
following definitions are hereby added to the Lease:
“First
Earn Out Payment Rent”
shall
mean an amount equal to Four Hundred Forty-Nine Thousand Four Hundred Eighty-Two
and 32/100 ($449,482.32) per year, payable in monthly installments pursuant
to
Section 3.13.
15. Landlord’s
Adjusted Investment Amount.
For
purposes of determining the amount of Landlord’s Adjusted Investment Amount, as
defined in the Lease, Six Million and No/100 Dollars ($6,000,000.00) of the
amount funded as of the Effective Date pursuant to the Earn Out Agreement is
hereby allocated to the Property.
-1-
16. The
following provision shall be added to the Lease as Section 3.13:
First
Earn Out Rent After First Earn Out Payment.
Upon
the funding of the First Earn Out Payment (as defined in the Earn Out Agreement)
and continuing through the end of the ninth Accounting Year of the Initial
Term
(but not thereafter), First Earn Out Payment Rent shall be due at the same
time
and under the same terms as Minimum Rent is due under the Lease (except as
otherwise expressly provided herein).
17. The
following provision shall be added to the Lease as Section 3.14:
Escalation
of First Earn Out Payment Rent.
Commencing on the first day of the Fourth Accounting Year and on the first
day
of each Accounting Year thereafter (through and including the first day of
the
ninth Accounting Year, but not thereafter), First Earn Out Payment Rent shall
escalate at a rate of two and one half percent (2.5%) per annum.
18. The
following provision shall be added to the Lease as Section 3.15:
Imputed
Interest.
In the
event that any payments of First Earn Out Payment Rent hereunder include or
are
deemed to include any unstated or imputed interest, the rate for determining
the
amount of such payments that will constitute such unstated or imputed interest
will be the "short-term federal rate" (as such term is defined in Section
1274(d) of the Code and the regulations, rulings and pronouncements promulgated
thereunder) as of the date hereof which the parties hereto acknowledge is
(1.21%), and the parties hereto shall prepare and file all tax returns to be
filed with any taxing authority in a manner consistent with the foregoing and
shall take no position inconsistent therewith in any tax return, in any
discussion with or proceeding before any taxing authority, or
otherwise.
19. Second
CMC Mortgage Loan.
The
definition of “Mortgage” set forth in Section 19.4 of the Lease shall be deemed
to refer to both the first mortgage loan advanced as of the date of the Lease
and the second mortgage loan being used to fund the payment being made pursuant
to the Earn Out Agreement as of the Effective Date and all of the provisions
of
Section 19.4 applying to the first mortgage shall also apply to the second
mortgage.
20. Property
Expenses.
The
following paragraph is hereby added at the end of Exhibit “H”:
Notwithstanding
anything contained in the foregoing, in no event shall costs and expenses
relating to the hiring or termination of any corporate-level personnel of the
Tenant or Manager who are not direct employees of the Facility, including but
not limited to the executive director of the Facility, be paid as a Property
Expense payable from Total Facility Revenue, but rather shall be a cost borne
by
Tenant or Manager independently.
21. Assignment
of Xxxxxx interests in
Tenant to ARC.
Landlord consents to the assignment by Xxxxxx to ARC of all of its membership
interests in and to the Tenant.
22. Full
Force and Effect.
Except
as herein provided, all other terms, conditions and provisions of the Lease
shall remain in full force and effect and cannot be modified unless said
modification is reduced to writing and signed by all parties.
23. Successors
and Assigns.
This
Amendment is binding upon and shall inure to the benefit of the parties hereto
and their respective successors and assigns as may be permitted under the
Lease.
24. Counterparts.
This
Amendment may be executed in one or more counterparts, any one of which need
not
contain the signature of more than one party and all of which taken together
shall constitute one and the same agreement.
[SIGNATURES
ON FOLLOWING PAGE]
-2-
IN
WITNESS WHEREOF,
the
parties have executed this Amendment as of the date above first
written.
|
LANDLORD:
CNL
RETIREMENT DSL1 ALABAMA, LP,
a
Delaware limited
partnership
By:
CNL
Retirement DSL1 GP, LLC,
a
Delaware
limited liability company,
its
sole general partner
By:
___________________________
Name:
_________________________
Title:
__________________________
|
|
TENANT:
ALABAMA
SOMERBY, LLC, a
Delaware limited liability company
By:
ARC Somerby Holdings, Inc., a Tennessee
corporation,
Managing Member
By:
__________________________
Name:
________________________
Title:
_________________________
|
-3-
