Exhibit 10.42.3
SECOND AMENDMENT TO MASTER LEASE
THIS SECOND AMENDMENT TO MASTER LEASE (the "SECOND AMENDMENT") is made as
of June 28, 2005 by and among ALTERRA HEALTHCARE CORPORATION, a Delaware
corporation ("TENANT") and NATIONWIDE HEALTH PROPERTIES, INC., a Maryland
corporation, NH TEXAS PROPERTIES LIMITED PARTNERSHIP, a Texas limited
partnership, MLD DELAWARE TRUST, a Delaware business trust, MLD PROPERTIES, LLC,
a Delaware limited liability company, NHP SILVERWOOD INVESTMENTS, INC., a Nevada
corporation, and NHP WESTWOOD INVESTMENTS, INC., a Nevada corporation
(collectively, "LANDLORD").
R E C I T A L S:
A. Landlord and Tenant have entered into that certain Master Lease dated
as of April 9, 2002, as amended by that certain First Amendment to Master Lease
and Consent to Transfer dated as of December 2, 2003 (as amended, the "MASTER
LEASE"), pursuant to which Landlord leases to Tenant the Premises described
therein. Initially capitalized terms used but not otherwise defined in this
Second Amendment shall have the meanings given to them in the Master Lease.
B. Landlord and Tenant now desire to further amend the Master Lease in
order to (i) evidence Tenant's agreement to complete $3,000,000 in capital
improvements to the Premises, and (ii) provide Tenant with an option to purchase
the Facility known as Canterbury Gardens which is located in Aurora, Colorado,
all under the terms and conditions set forth in this Second 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 MASTER LEASE.
(a) The following is hereby added as Section 8.3(c) of the Master
Lease:
"(c) Notwithstanding any other provisions of this Master Lease and in
addition to the Upgrade Expenditures to be made by Tenant pursuant to
Section 8.3(a) hereof, Tenant hereby covenants and agrees to complete, at
Tenant's sole cost and expense, a minimum of Three Million Dollars
($3,000,000) in capital improvements to the Facility known as Canterbury
Gardens and located at 00000 Xxxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxx (the
"CANTERBURY FACILITY") prior to June 30, 2006 (the "CANTERBURY
IMPROVEMENTS"). Tenant shall submit to Landlord a written capital
improvements spending plan, describing the proposed capital improvements
for the Canterbury Facility. Landlord shall promptly review the plan and
approve or explain to Tenant the reasonable grounds for its disapproval of
the proposed capital improvements within twenty (20) days of receipt of
the plan; provided, however, that Landlord's approval shall not be
required for capital improvements for replacement equipment and emergency
items or capital improvements which cost less than Fifty Thousand Dollars
($50,000). Thereafter, Tenant shall complete the various capital
improvements in accordance with the approved plan and shall, within thirty
(30) days following the expiration of each calendar quarter, deliver
reasonably detailed reports to Landlord describing the capital
improvements completed by Tenant during such calendar quarter and the
amount expended by Tenant therefore. All work done in connection with the
various capital improvements shall be done in a good and workmanlike
manner and in material compliance with all existing codes and regulations
pertaining to the Canterbury Facility and shall comply with the
requirements of insurance policies required under this Master Lease."
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(b) The following is hereby added as Section 28 of the Master
Lease:
"28. CANTERBURY OPTION TO PURCHASE. Provided that Tenant has completed the
Canterbury Improvements as required in Section 8.3(c) and no Event of
Default exists on the Option Exercise Date or the closing date following
the Option Exercise Date, Landlord hereby grants to Tenant an option to
purchase the Canterbury Facility, which option may be exercised by Tenant
at any time during the period commencing January 1, 2008 and continuing
through the remainder of the Term (the "OPTION PERIOD"). In the event
Tenant wishes to exercise the Option, Tenant shall give Landlord written
notice at any time during the Option Period (a "OPTION EXERCISE NOTICE")
thereof on a date (the "OPTION EXERCISE DATE") that is at least six (6)
months but no more than one (1) year prior to the anticipated closing date
for the consummation of such purchase. The purchase price for the
Canterbury Facility shall be Seven Million Dollars ($7,000,000), as
increased from and after January 1, 2008 by the rate of two and one-half
percent (2'/s%) per annum, compounded annually (the "PURCHASE PRICE").
Within ten (10) days of Tenant's delivery of the Option Exercise Notice,
the parties shall sign the standard sale escrow instructions (the "SALE
INSTRUCTIONS") of a national title company (selected by Tenant) that are
in form and substance reasonably satisfactory to Landlord and Tenant,
which Sale Instructions shall provide (a) for no representations or
warranties (other than a representation and warranty by Landlord that
Landlord has not encumbered title to the Canterbury Facility), due
diligence or other contingencies in favor of Tenant; (b) that Tenant shall
deposit FIVE PERCENT (5%) of the Purchase Price with the title company,
which may be retained by Landlord as liquidated damages solely for any
breach by Tenant of the terms of this Section 28 or the Sale Instructions
(and which in no way shall liquidate or limit Landlord's damages by reason
of any breach of this Master Lease other than as a result of a breach
under this Section 28 or the Sale Instructions); (c) that the escrow shall
close on the date identified in the Option Exercise Notice, at which time
Tenant shall pay the Purchase Price in cash and Landlord shall deliver
title to the Canterbury Facility, subject only to the applicable Permitted
Exceptions (which shall not include any encumbrances created by, through
or under Landlord other than as requested by Tenant in writing during the
term); and (d) that Tenant shall pay all transaction costs. If Tenant
fails to close the escrow for the purchase of the Canterbury Facility for
any reason other than a breach by Landlord, then no Event of Default shall
arise solely as a result of such failure, but the rights granted to Tenant
under this Section 28 with respect to the Canterbury Facility shall
automatically terminate and be of no further force or effect. Concurrently
with the closing of the sale of the Canterbury Facility, (i) the Minimum
Rent shall be reduced by the product of (x) the Purchase Price, and (y)
ten percent (10.00%); and (b) Landlord's Investment shall be reduced by
the amount of the Purchase Price received by Landlord in connection with
the sale."
2. REAFFIRMATION OF OBLIGATIONS. Notwithstanding the modifications to the
Master Lease contained herein, Tenant and Landlord each hereby acknowledges and
reaffirms their respective obligations under the Master Lease (as modified
hereby) and all other documents executed by such party in connection therewith.
Except as specifically amended pursuant to the terms of this Second Amendment,
the terms and conditions of the Master Lease shall remain unmodified and in full
force and effect. In the event of any inconsistencies between the terms of this
Second Amendment and any terms of the Master Lease, the terms of this Second
Amendment shall govern and prevail.
3. 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 Second Amendment.
4. INCORPORATION OF RECITALS. The Recitals to this Second Amendment are
incorporated hereby by reference.
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5. ATTORNEYS' FEES. In the event of any dispute or litigation concerning
the enforcement, validity or interpretation of this Second 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.
6. MISCELLANEOUS. This Second 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 Second 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 Second 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 provided that the laws of
the State of Colorado shall govern procedures for enforcing provisions and other
remedies related to the Canterbury Facility. This Second 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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WITNESS WHEREOF, the parties have executed this Second Amendment as of the
date first above written.
TENANT:
ALTERRA HEALTHCARE CORPORATION,
a Delaware corporation
By: /s/ Xxxx Xxxxxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxxxxx
---------------------------
Title: President
-----------------------------------
Witness: /s/ Illegible Witness: /s/ X.X. Xxxxxx
--------------------------- ---------------------------
LANDLORD:
NATIONWIDE HEALTH PROPERTIES, INC.,
a Maryland corporation
By: /s/ Xxxx X. Xxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxx
-----------------------------------
Title: Chief Portfolio Officer & Senior
-----------------------------------
Vice President
-----------------------------------
Witness: /s/ Illegible Witness: /s/ Illegible
--------------------------- ---------------------------
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NH TEXAS PROPERTIES LIMITED PARTNERSHIP,
a Texas limited partnership
By: MLD TEXAS CORPORATION,
a Texas corporation,
its General Partner
By: /s/ Xxxx X. Xxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxx
-----------------------------------
Title: Chief Portfolio Officer & Senior
-----------------------------------
Vice President
-----------------------------------
Witness: /s/ Illegible Witness: /s/ Illegible
--------------------------- ---------------------------
MLD PROPERTIES, LLC,
a Delaware limited liability company
BY: MLD PROPERTIES, INC.,
a Delaware corporation,
its Sole Member
By: /s/ Xxxx X. Xxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxx
-----------------------------------
Title: Chief Portfolio Officer & Senior
-----------------------------------
Vice President
-----------------------------------
Witness: /s/ Illegible Witness: /s/ Illegible
--------------------------- ---------------------------
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MLD DELAWARE TRUST,
a Delaware business trust
By: /s/ Xxxx Xxxxxx
---------------------------
, not in his individual capacity,
------------------------------------
but solely as Trustee
Witness: /s/ Illegible Witness: /s/ Illegible
--------------------------- ---------------------------
NHP SILVERWOOD INVESTMENTS, INC.,
a Nevada corporation
By: /s/ Xxxx X. Xxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxx
-----------------------------------
Title: Chief Portfolio Officer & Senior
-----------------------------------
Vice President
-----------------------------------
Witness: /s/ Illegible Witness: /s/ Illegible
--------------------------- ---------------------------
NHP WESTWOOD INVESTMENTS, INC.,
a Nevada corporation
By: /s/ Xxxx X. Xxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxx
-----------------------------------
Title: Chief Portfolio Officer & Senior
-----------------------------------
Vice President
-----------------------------------
Witness: /s/ Illegible Witness: /s/ Illegible
--------------------------- ---------------------------
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