EXHIBIT: 10.45.2
FIRST AMENDMENT TO MASTER LEASE,
AFFIRMATION OF GUARANTY AND
CONSENT TO TRANSFER
THIS FIRST AMENDMENT TO MASTER LEASE, AFFIRMATION OF GUARANTY AND
CONSENT TO TRANSFER (the "FIRST AMENDMENT") is made as of September 12, 2003 by
and among ALS LEASING, INC., a Delaware corporation ("TENANT") and JER/NHP
SENIOR LIVING ACQUISITION, LLC, a Delaware limited liability company
("LANDLORD") and ALTERRA HEALTHCARE CORPORATION, a Delaware corporation
("GUARANTOR").
R E C I T A L S:
A. Landlord and Tenant have entered into that certain Master Lease
dated as of October 7, 2002 (the "MASTER LEASE"), pursuant to which Landlord
leases to Tenant the Premises described therein. Initially capitalized terms
used but not otherwise defined in this First Amendment shall have the meanings
given to them in the Master Lease.
B. Pursuant to the Master Lease and that certain Letter of Credit
Agreement dated as of October 7, 2002 (the "LC AGREEMENT") by and between
Landlord and Tenant, Tenant may post one or more letters of credit with Landlord
as partial collateral for the performance of Tenant's obligations under the
Master Lease.
C. Pursuant to that certain Guaranty of Master Lease and Letter of
Credit Agreement dated as of October 7, 2002 (the "GUARANTY") executed by
Guarantor, as guarantor, in favor of Landlord, as beneficiary, Guarantor has
guarantied the obligations of Tenant under the Master Lease. Pursuant to that
certain Stock Pledge Agreement dated as of October 7, 2002 (the "PLEDGE
AGREEMENT") by and between Guarantor, as pledgor, and Landlord, as secured
party, Guarantor has pledged to Landlord the capital stock of each entity
comprising Tenant as security for the performance by Tenant under the Master
Lease and the performance by Guarantor under the Guaranty.
D. Pursuant that certain Memorandum of Understanding dated as of
October 7, 2002 (the "MOU" (the Master Lease, the LC Agreement, the MOU and all
other documents executed by Tenant in connection therewith or incorporated or
referenced therein are collectively referred to herein as the "LEASE DOCUMENTS",
and the Guaranty, the Pledge Agreement and the MOU and all other documents
executed by Guarantor in connection therewith or incorporated or referenced
therein are collectively referred to herein as the "GUARANTY DOCUMENTS"))
executed by Guarantor, Tenant and Landlord, the parties hereto and thereto
established certain understandings with respect to the Master Lease and the
Guaranty.
E. As of the date hereof, Guarantor is a debtor in possession in a
case (Case No. 03-10254 (MFW)) (including any later bankruptcy proceeding of
Tenant procedurally consolidated therewith, the "BANKRUPTCY PROCEEDING")
commenced under chapter 11 of Title 11 of the United States Code (the
"BANKRUPTCY CODE"), which case is presently pending before the United States
Bankruptcy Court for the District of Delaware (the "BANKRUPTCY COURT"). It is
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currently contemplated that FEBC-ALT Acquisition, Inc., a Delaware corporation
(the "PURCHASER"), shall be merged with and into Guarantor (the "TRANSFER")
pursuant to the terms of the Agreement and Plan of Merger dated July 18, 2003 by
and among FEBC-ALT Investors, Inc., FEBC-ALT Acquisition Inc. and the Guarantor
Guarantor's First Amended Plan of Reorganization of Alterra Healthcare
Corporation dated July 28, 2003 (as such plan may later be amended, supplemented
or otherwise modified, the "PLAN"). Each entity comprising Tenant is prior to
the Transfer a wholly owned subsidiary and an Affiliate of Guarantor, and shall
remain immediately following the effectiveness of the Transfer a wholly owned
subsidiary and an Affiliate of Guarantor as the surviving entity under the
Transfer (the "SURVIVING ENTITY").
F. Landlord, Tenant and Guarantor desire, among other things, to
amend the Lease Documents and to make certain other representations, warranties
and covenants, all as more particularly set forth in this First Amendment.
A G R E E M E N T
NOW, THEREFORE, taking into account the foregoing Recitals, and in
consideration of the mutual covenants and agreements contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. AMENDMENTS TO LEASE DOCUMENTS.
(a) MINIMUM OCCUPANCY. Clause (i) of Section 7.1(b) of the
Master Lease is hereby amended and restated in its entirety as follows:
"(i) commencing as of June 30, 2004, to be less than forty
percent (40%) of the applicable number of beds or living units, as
applicable, shown on Schedule 1, for any two (2) individual
Facilities at any time that the Coverage Ratio for the immediately
preceding calendar quarter was less than 1.0:1.0; or"
(b) NONCOMPLIANCE. Section 7.1(c) of the Master Lease is
hereby amended and restated in its entirety as follows:
"(c) Intentionally Omitted."
(c) COVERAGE RATIO. Section 7.4 of the Master Lease is hereby
amended and restated in its entirety as follows:
"7.4 DEFINITION OF COVERAGE RATIO. As used in Section 7 and
elsewhere in this Master Lease, "COVERAGE RATIO" shall mean the
ratio of (i) Portfolio EBITDARM to (ii) Portfolio Rent Expense."
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(d) CERTAIN EVENTS OF DEFAULT. Clauses (i) and (ii) of Section
12(b) of the Master Lease are each hereby amended and restated in their
entirety as follows:
"(b) (i) the failure to perform or comply with the
provisions of, or a breach or default under, Section 7.2 (together
with the events described in Section 12(c), each a "LOSS OF
LICENSURE"); (ii) the closure of any material portion of the
Business;"
(e) CERTAIN CROSS DEFAULTS.
(i) Clause (ii)(B) of Section 12(d) of the Master Lease
is hereby amended and restated in its entirety as
follows: "(B) any other lease, agreement or
obligation between it and Landlord or any of its
Affiliates (excluding Nationwide Health Properties,
Inc. ("NHP")), including the Purchase Agreement with
respect to any default by "Seller" (as defined in the
Purchase Agreement), which is not cured within any
applicable cure period specified therein,".
(ii) Clause (ii)(C) of Section 12(d) of the Master Lease
is hereby amended and restated in its entirety as
follows: "(C) [intentionally omitted]".
(f) NOTICE ADDRESSES.
(1) The notice address for Tenant set forth in Section
22 of the Master Lease is hereby amended and restated in
its entirety as follows:
c/o Alterra Healthcare Corporation
0000 Xxxxxxxxxx Xxxxx
Xxxxxxxxx, X0 00000
Attention: Xxxx Xxxxxxxxx
Fax No. 000-000-0000
With a copy to:
Xxxxxx & Xxxxxx
000 Xxxxxxxxx Xx. Xxxxx 0000
Xxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Dert ESQ.
Fax No. 000-000-0000
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(2) The notice address for the first-listed counsel to
Landlord set forth in Section 22 of the Master Lease is
hereby amended and restated in its entirety as follows:
Xxxxxx Xxxxxxxxx Xxxxxx & Xxxxxx LLP
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Fax No. (000) 000-0000
(g) EFFECT OF AMENDMENT. Except as specifically amended
pursuant to the terms of this First Amendment, the terms and conditions of
the Lease Documents shall remain unmodified and in full force and effect.
In the event of any inconsistencies between the terms of this First
Amendment and any terms of the Lease Documents, the terms of this First
Amendment shall govern and prevail.
2. AFFIRMATION OF LEASE DOCUMENTS AND GUARANTY DOCUMENTS.
(a) Tenant hereby acknowledges and affirms its obligations
under the Lease Documents (as modified hereby), and further represents and
warrants that the Lease Documents are the valid and binding obligations of
Tenant and are in full force and effect and are fully enforceable by
Landlord against Tenant in accordance with their respective terms. Tenant
specifically acknowledges and affirms that, except as expressly modified
by this First Amendment, its obligations under the Lease Documents shall
not be diminished or otherwise affected by this First Amendment and shall
not be released, discharged, terminated or otherwise diminished in whole
or in part as a result of the Bankruptcy Proceeding, and further agrees
that it shall take no actions and shall oppose any actions by third
parties in the Bankruptcy Proceeding that would result in the release,
discharge, termination or other diminution of any obligation of the Tenant
thereunder.
(b) Guarantor hereby acknowledges and affirms its obligations
under the Guaranty Documents, and further represents and warrants that the
Guaranty Documents are the valid and binding obligations of Guarantor and
are in full force and effect and are fully enforceable by Landlord against
Guarantor in accordance with their respective terms. Guarantor
specifically acknowledges and affirms that, except as expressly modified
by this First Amendment, its obligations under the Guaranty Documents
shall not be diminished or otherwise affected by this First Amendment and
shall not be released, discharged, terminated or otherwise diminished in
whole or in part as a result of the Bankruptcy Proceeding, and further
agrees that it shall take no actions and shall oppose any actions by third
parties in the Bankruptcy Proceeding that would result in the release,
discharge, termination or other diminution of any obligation of the
Guarantor thereunder, in each case whether such result is achieved under
the Plan or under an successor or replacement chapter 11 plan. Guarantor
hereby further represents and warrants that, upon entry of the Approval
Order (as defined in the Stipulation referred to below), the Guaranty
Documents will be the valid and binding obligations of the Surviving
Entity and shall be in full force and effect and fully enforceable by
Landlord
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against the Surviving Entity in accordance with their respective terms.
Guarantor further agrees that any reference made in the Guaranty Documents
to the Lease Documents or any terms or conditions contained therein, shall
mean such Lease Documents or such terms or conditions as modified by this
First Amendment.
3. ACKNOWLEDGMENT OF DEFAULT; WAIVER OF SETOFF, COUNTERCLAIM.
(a) The Events of Default and other defaults described in this
paragraph are collectively referred to in this First Amendment as the
"AUGUST 2003 EVENTS OF DEFAULT." The August 2003 Events of Default include
any Events of Default or other defaults arising from (i) the failure to
maintain the Coverage Ratio required under Section 7.4 of the Companion
Master Lease for the quarter ended June 30, 2003, (ii) any mechanic's or
materialman's lien being recorded against the Premises that has, on or
before the date hereof, been released and terminated, (iii) the default
arising under the MOU as a result of the defaults described in the
foregoing clauses (i) and (ii), (iv) any default under the MOU for failure
to file and continuously pursue a Conforming Plan (as defined in the MOU),
and (v) a cross default occurring under the Companion Master Lease or the
Master Lease dated April 9, 2002 between Guarantor and NHP and certain
Affiliates of NHP as a result of the defaults described in the foregoing
clauses (i)-(iv).
(b) Each entity comprising Tenant and Guarantor hereby
acknowledges and agrees that (i) the August 2003 Events of Default have
occurred and are continuing, and (ii) until satisfaction of the conditions
set forth in Section 3(d) of this First Amendment, Landlord's agreement in
Section 3(c) to forbear is not intended as and shall not be construed as a
waiver of the August 2003 Events of Default or any other defaults or
Events of Default, whether now existing or hereafter arising and, except
as specifically provided herein, Landlord's agreement to forbear in no way
impairs Landlord's right to enforce its remedies for the August 2003
Events of Default and any subsequent defaults or Events of Default.
Landlord reserves all such rights and remedies. Each entity comprising
Tenant and Guarantor hereby waives any right of setoff or counterclaim
against Landlord with respect to any rights, claims or defenses it has or
may have with respect to the Lease Documents or Guaranty Documents.
(c) Subject to the provisions of this Section 3 and other
provisions of this First Amendment, Landlord shall forbear from exercising
its rights and remedies with respect to the August 2003 Events of Default
for a period (the "FORBEARANCE PERIOD") commencing effective as of the
date of the Stipulation (as defined below) and terminating upon the
earlier to occur of the following dates (the "TERMINATION DATE"): (i) the
entry of an order denying the Approval Order (as defined in the
Stipulation); (ii) the date on which occurs any Event of Default or other
default under any of the Lease Documents (including without limitation any
default arising as a cross-default with any of the Guaranty Documents)
other than the August 2003 Events of Default; (iii) the date on which
Tenant or Guarantor breaches any covenant, representation or warranty of
this First Amendment; and (iv) December 31, 2003, if by such date the
Bankruptcy Court has not entered a final order that is no longer subject
to appeal confirming the Amended Plan and the Transfer has not been
consummated and become effective.
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(d) Upon satisfaction of the conditions precedent to the
effectiveness of this First Amendment as set forth in Section 5 hereof,
Landlord shall be deemed to have and shall waive the August 2003 Events of
Default and any rights or remedies it may have in connection therewith.
4. CONSENT TO TRANSFER. Upon satisfaction of the conditions
precedent to the effectiveness of this First Amendment as set forth in Section 5
hereof, Landlord shall be deemed to have consented to the Transfer in accordance
with Section 16 of the Master Lease.
5. EFFECTIVENESS OF FIRST AMENDMENT. This First Amendment shall be
deemed effective on the first date (the "EFFECTIVE DATE") upon which each of the
following conditions has occurred, each of which shall be deemed a condition
precedent to the Landlord's obligations and covenants hereunder:
(a) Landlord has obtained all consents and approvals from its
mortgage lender in connection with this First Amendment that Landlord
deems necessary to comply with the terms and conditions of the mortgage
loan secured by the Premises, provided that Landlord shall either (i)
elect in its sole and absolute discretion to waive this condition, or (ii)
obtain all such consents and approvals, in either case on or before
September 24, 2003;
(b) All conditions precedent to the effectiveness of this
First Amendment as set forth in that certain Stipulation between the
parties dated as of September __, 2003 (the "STIPULATION") shall have been
satisfied in accordance with the Stipulation, and Guarantor and Tenant
shall have performed all covenants, conditions and undertakings and
satisfied all other requirements binding on them under the Stipulation in
accordance with the Stipulation;
(c) No Events of Default or other defaults or breaches of the
Lease Documents or the Guaranty Documents, other than the August 2003
Events of Defaults (as defined in the Stipulation) shall have occurred and
be continuing; and
(d) (i) the Transfer shall have been consummated and closed in
accordance with the Plan, (ii) the Lease Documents and the Guaranty
Documents shall continue to be and shall be the valid and binding
obligations of Tenant and the Surviving Entity, respectively, and shall
continue to be and shall be in full force and effect, enforceable in
accordance with their respective terms by Landlord against Tenant and the
Surviving Entity, respectively, and (iii) the claims of Landlord shall
have been treated as impaired, with the consent of and in accordance with
the consent given by Landlord and with the Plan.
6. FURTHER INSTRUMENTS. Each of the undersigned will, whenever and
as often as it shall be reasonably requested so to do by another party, take all
actions reasonably required and shall cause to be executed, acknowledged or
delivered, any and all such further instruments and documents as may be
necessary or proper, in the reasonable opinion of the requesting party, in order
to carry out the intent and purpose of this First Amendment, including without
limitation
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modifying or amending the Plan to ensure that the undersigned receive the full
benefit of their respective bargains set forth herein.
7. INCORPORATION OF RECITALS. The Recitals to this First Amendment
are incorporated hereby by reference.
8. ATTORNEYS' FEES. In the event of any dispute or litigation
concerning the enforcement, validity or interpretation of this First Amendment,
or any part thereof, the losing party shall pay all costs, charges, fees and
expenses (including reasonable attorneys' fees) paid or incurred by the
prevailing party, regardless of whether any action or proceeding is initiated
relative to such dispute and regardless of whether any such litigation is
prosecuted to judgment.
9. MISCELLANEOUS. This First Amendment contains the entire agreement
between the parties relating to the subject matters contained herein. Any prior
representations or statements concerning the subject matters herein shall be of
no force or effect. This First Amendment shall be construed as a whole and in
accordance with its fair meaning. Headings are for convenience only and shall
not be used in construing meaning. This First Amendment shall be governed by and
construed in accordance with the internal laws of the State of California
without regard to rules concerning the choice of law. This First Amendment may
be executed in multiple counterparts and in original or by facsimile, each of
which constitute an original, but all of which taken together shall constitute
but one in the same document.
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IN WITNESS WHEREOF, the parties have executed this First Amendment
as of the date first above written.
"TENANT"
ALS LEASING, INC.,
a Delaware corporation
By: /s/ Xxxx X. Xxxxxxxxx
----------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: VP
Witness: /s/ Illegible Witness: /s/ Illegible
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"GUARANTOR"
ALTERRA HEALTHCARE CORPORATION,
a Delaware corporation
By: /s/ Xxxx X. Xxxxxxxxx
----------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: VP
Witness: /s/ Illegible Witness: /s/ Illegible
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"LANDLORD"
JER/NHP SENIOR LIVING ACQUISITION, LLC,
a Delaware limited liability company
By: JER/NHP SENIOR HOUSING, LLC,
a Delaware limited liability company,
its sole member
By: NATIONWIDE HEALTH PROPERTIES, INC.,
a Maryland corporation,
its managing member
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President & General Counsel
Witness: /s/ Illegible Witness: /s/ Illegible
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