FIRST AMENDMENT TO MASTER LEASE
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(Phase II)
THIS FIRST AMENDMENT TO MASTER LEASE (this "Agreement") is made and entered
into as of this ___ day of September, 2003 (the "Effective Date"), by and
between Fort Austin Real Estate Holdings, LLC, a Delaware limited liability
company; ARC Santa Catalina Real Estate Holdings, LLC, a Delaware limited
liability company; ARC Richmond Place Real Estate Holdings, LLC, a Delaware
limited liability company; ARC Holland Real Estate Holdings, LLC, a Delaware
limited liability company; ARC Sun City Center Real Estate Holdings, LLC, a
Delaware limited liability company; ARC Lake Seminole Square Real Estate
Holdings, LLC, a Delaware limited liability company; and ARC Brandywine Real
Estate Holdings, LLC, a Delaware limited liability company (collectively, as
their interests may appear, "Lessor"), on the one hand, and Fort Austin Limited
Partnership, a Texas limited partnership; ARC Santa Catalina, Inc., a Tennessee
corporation; ARC Richmond Place, Inc., a Delaware corporation; Freedom Village
of Holland, Michigan, a Michigan general partnership; Freedom Village of Sun
City Center, Ltd., a Florida limited partnership; Lake Seminole Square
Management Company, Inc., a Tennessee corporation; Freedom Group-Lake Seminole
Square, Inc., a Tennessee corporation; and ARC Brandywine, LLC, a Tennessee
limited liability company (collectively and jointly and severally, "Lessee"), on
the other hand.
RECITALS
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A. Lessor is the "Lessor" and Lessee is the "Lessee" pursuant to that
certain Master Lease dated September 30, 2002 (as amended to date, the "Lease"),
covering certain "Leased Property," as more particularly described in the Lease.
▇. ▇▇▇▇▇▇ desires to execute this amendment to the Lease pursuant to and in
accordance with Section 31.2 of the Lease to separate and remove the Tucson
Facility, Austin Facility and Ft. Worth Facility (collectively, the "Separated
Properties") from the Lease. ARC Santa Catalina Real Estate Holdings, LLC ("ARC
Santa Catalina") and ARC Fort Austin Real Estate Holdings, LLC ("ARC Fort
Austin") are the respective fee owners of the Tucson Facility and the Austin and
Ft. Worth Facilities, and in connection with Lessor's desire to separate and
remove such Facilities from the Lease, desire to execute a New Lease (as defined
in the Lease) covering the Tucson Facility, Austin Facility and Ft. Worth
Facility.
C. Additionally, Lessor and Lessee desire to terminate the Lease with
respect to the Denver Facility (the "Terminated Property"), as more particularly
set forth below.
D. Capitalized terms used herein and not defined herein shall have the
meanings given such terms in the Lease.
AGREEMENT
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IN CONSIDERATION OF the foregoing recitals, the mutual promises contained
herein, and other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, Lessor and Lessee hereby agree as follows:
1. Separated Properties.
(a) Separation of Separated Properties. Subject to all of the terms
and conditions of this Agreement and the Lease, the Separated
Properties shall be separated and removed from the Lease upon the
Effective Date. Except as set forth in this Agreement, neither
Lessor nor Lessee shall have any further obligations to the other
pursuant to the Lease with respect to the Separated Properties
subsequent to the Effective Date.
(b) New Lease. Concurrently herewith, ARC Santa Catalina and ARC Fort
Austin, on the one hand, and Fort Austin Limited Partnership, a
Texas limited partnership ("Fort Austin Lessee") and ARC Santa
Catalina, Inc., a Tennessee corporation ("Santa Catalina
Lessee"), on the other hand, shall concurrently execute a New
Lease with respect to the Tucson Facility, Austin Facility and
Ft. Worth Facility.
2. Terminated Property.
(a) Termination of Lease With Respect to Terminated Property. Subject
to all of the terms and conditions of this Agreement, the
respective obligations of Lessor and Lessee under the Lease with
respect to the Terminated Property shall terminate upon the
Effective Date. Except as set forth in this Agreement, neither
Lessor nor Lessee shall have any further obligations to the other
pursuant to the Lease with respect to the Terminated Property
subsequent to the Effective Date.
3. Cessation of Obligations Under Lease and Reservations. Notwithstanding
anything to the contrary herein, the following obligations of Lessee with
respect to the Separated Properties and the Terminated Property shall be
reserved and continue subsequent to the Effective Date (as used in this Sections
3 and 5 of this Agreement, "Lessee" shall have the meaning given to it under the
Lease, without reference to this Agreement):
(a) Lessee agrees to defend, indemnify and hold harmless Lessor from
and against any and all liens, claims, costs, losses, expenses,
damages, actions and causes of action for which Lessee is
responsible under the Lease with respect to the Separated
Properties and the Terminated Property and which accrue or
accrued on or before the Effective Date or result from a breach
of representation or warranty of Lessee as set forth herein.
(b) Lessee shall remain liable for (i) the cost of any and all
Impositions, insurance premiums, utilities charges and other
expenses incurred in connection with the operation, maintenance
and use of the Separated Properties and the Terminated Property
through and including the Effective Date until full payment
thereof and (ii) all Minimum Rent and Additional Rent payable
under the Lease through and including the Effective Date
(prorating such Minimum Rent and Additional Rent as applicable)
until full payment thereof. Without limiting the foregoing,
Lessee shall remain responsible for and shall pay all 2002
assessments for real estate taxes due and payable in 2003, and
for all prior years. Lessee shall also be responsible for and pay
its proportionate share of all real estate taxes which are
assessed in 2003 and which are due and payable in 2003, based
upon the number of days between January 1, 2003 and the Effective
Date.
(c) Lessee shall remain responsible for any personal property tax
liens assessed against the Separated Properties and the
Terminated Property or any personal property of Lessee therein
with a lien date prior to the Effective Date (including all
personal property taxes assessed in 2003 which are due and
payable in 2004, and for all prior years), irrespective of the
date of the billing therefor, and shall indemnify and hold Lessor
harmless with respect to any claims for such taxes or resulting
from non-payment thereof.
4. Amendments.
(a) The following definitions shall be amended and restated in their
entirety as follows effective as of the Effective Date:
"Lessee: Collectively, and jointly and severally, ARC Richmond Place,
Inc., a Delaware corporation; Freedom Village of Holland, Michigan, a Michigan
general partnership; Freedom Village of Sun City Center, Ltd., a Florida limited
partnership; Lake Seminole Square Management Company, Inc., a Tennessee
corporation; Freedom Group-Lake Seminole Square, Inc., a Tennessee corporation;
and ARC Brandywine, LLC, a Tennessee limited liability company; 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."
"Lessor: Collectively, as their interests may appear, ARC Richmond
Place Real Estate Holdings, LLC, a Delaware limited liability company; ARC
Holland Real Estate Holdings, LLC, a Delaware limited liability company; ARC Sun
City Center Real Estate Holdings, LLC, a Delaware limited liability company; ARC
Lake Seminole Square
Real Estate Holdings, LLC, a Delaware limited liability company; and ARC
Brandywine Real Estate Holdings, LLC, a Delaware limited liability company;
provided, however, that with respect to any matter as it relates to a particular
Facility (including, but not limited to, any matter in which Lessor's consent or
approval is required for a particular Facility), as used herein, "Lessor" shall
mean only that Lessor which is the fee owner of such Facility. As of the date
hereof, the "Lessor" for each Facility is as set forth on Exhibit H attached
hereto."
(b) Santa Catalina Lessee and Fort Austin Lessee shall be released
from any duties, obligations and liabilities under the Lease, as
hereby amended, as to the balance of the Leased Property (i.e.,
all Leased Property other than the Separated Properties and the
Terminated Property) first accruing after the Effective Date;
provided, however, that the foregoing shall not be construed to
release Santa Catalina Lessee and Fort Austin Lessee from (i) any
duties, obligations and liabilities under the Lease, as hereby
amended, or the New Lease relating to the Separated Properties
(including, without limitation, the duties, obligations and
liabilities relating to the Separated Properties and Terminated
Property resulting pursuant to Section 3 above) or (ii) any
duties, obligations and liabilities under the Lease, as hereby
amended, as to all of the Leased Property, to the extent any such
duties, obligations and liabilities relate to the period prior to
the Effective Date.
(c) Exhibits ▇-▇, ▇-▇, ▇-▇ and A-9 shall be deleted in their
entirety.
(d) Exhibit B shall be amended and restated with the information on
Schedule 1 attached hereto.
(e) Exhibit F shall be amended and restated with the information on
Schedule 2 attached hereto.
(f) Exhibit G shall be amended and restated with the information on
Schedule 3 attached hereto.
(g) Exhibit H shall be amended and restated with the information on
Schedule 4 attached hereto.
(h) Exhibit K shall be amended and restated with the information on
Schedule 5 attached hereto.
(i) With respect to calculating Allocated Minimum Rent increases for
the Sun City Facility, the words "the applicable CPI Increase
(expressed as a decimal) for such Lease Year" in the first
sentence of Section 3.1.2 shall be replaced with "0.025".
Additionally, Section 3.13 of the Lease shall have no application
to the Sun City Facility (i.e., from and after the Effective
Date, there will be no Allocated Additional Rent due for the Sun
City Facility).
5. Representations and Covenants. Lessee represents, warrants and covenants
as follows:
(a) That Lessee shall neither take any action nor fail to take any
action the result of which will be the imposition of any liens
upon the Separated Properties or the improvements or fixtures
thereon or therein or the creation of any claims against Lessor.
It is hereby mutually agreed that this provision is not intended
to bestow any benefit upon any person who is not a party to this
Agreement.
(b) The Separated Properties and all improvements and fixtures
therein are free and clear of any liens, claims or encumbrances
created or suffered by, through or under Lessee, or its
Affiliates, sublessees or other third parties for whom Lessee is
responsible.
(c) Neither Lessor nor Lessee is in default under the Lease, and
Lessee does not claim any offsets, credits or defenses against
rents or other amounts payable under the Lease or the calculation
thereof, nor does Lessee have any other claim against Lessor
under the Lease or with respect to the Leased Property.
6. Consent of Lessor. Lessor hereby consents to each of the following:
(a) Guarantor's execution of that certain Guaranty of Obligations
dated of even date herewith in favor of ARC Santa Catalina, ARC
Fort Austin, Health Care Property Investors, Inc. ("HCPI"), and
Texas HCP Holdings, L.P., a Delaware limited partnership ("Texas
HCP"), with respect to the New Lease for the Tucson Facility,
Austin Facility and Ft. Worth Facility;
(b) Guarantor's acquisition of the Summit Vacant Property and the
Broadway Vacant Property (as such terms are defined in that
certain Secured Promissory Note dated of even date herewith by
Guarantor for the benefit of HCPI (the "Land Loan Note"));
(c) Guarantor's execution of the Land Loan Note, the related Deed of
Trust with respect to the Summit Vacant Property and the related
Deed of Trust with respect to the Broadway Vacant Property;
(d) Guarantor's execution of the amendments to its organizational
documents in a form reasonably acceptable to Lessor, as each such
document is described on Exhibit A;
(e) The dissolution of ARC Santa Catalina following the consummation
of the transactions contemplated by that certain Contract of
Acquisition dated of even date herewith by and between Guarantor,
as seller, and HCPI, as buyer ("Contract of Acquisition");
(f) The dissolution of ARC Fort Austin following the consummation of
the transactions contemplated by that certain Contract of
Acquisition;
(g) ARC Santa Catalina, Inc.'s execution of the amendments to its
organizational documents in a form reasonably acceptable to
Lessor, as each such document is described on Exhibit B; and
(h) Fort Austin Limited Partnership's execution of the amendments to
its organizational documents in a form reasonably acceptable to
Lessor, as each such document is described on Exhibit C;
7. Effect of Agreement. Except as expressly amended hereby, the Lease
remains in full force and effect. In other words, nothing herein shall affect
the validity of the Lease or Lessee's (as the definition of Lessee has been
amended hereby) continued obligations thereunder with respect to the Seminole
Facility, Sun City Facility, Lexington Facility, Holland Facility and Brandywine
Facility.
8. Consent of Guarantor. Guarantor hereby (a) consents to this Amendment
and the separation of the Separated Properties, and (b) re-affirms its
obligations under the Guaranty.
9. Miscellaneous.
(a) This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
(b) This Agreement shall be governed by and construed in accordance
with the internal laws of the State of California.
(c) There are no agreements, understandings, commitments,
representations or warranties with respect to the subject matter
hereof except as expressly set forth in this Agreement. This
Agreement supersedes all prior oral or written negotiations,
understandings and agreements with respect to the subject matter
hereof.
(d) Neither anything contained herein nor the transaction provided
for herein shall be deemed or construed to constitute a "bulk
sale" or an assumption by Lessor of any obligations of Lessee.
(e) Each of the parties hereto acknowledges that it has negotiated
for the specific considerations to be received by it hereunder
and that damages would be an inadequate remedy for the breach of
this Agreement by the other party. Each of the parties hereto
shall be entitled to enforce the terms of this Agreement by an
action either for specific performance or for injunctive relief,
or both, to prevent the breach or continued breach of this
Agreement. The prevailing party in any proceeding pursuant to or
based upon this Agreement or in which this Agreement is asserted
as a defense shall be entitled to recover attorneys' fees and
costs incurred in such proceeding in such amount as the court
shall determine to be reasonable.
(f) Lessor and Lessee hereby reaffirm Section 46.2 of the Lease and
hereby acknowledge and agree that this Lease, as amended hereby,
shall be treated as an operating lease for all purposes and not
as a synthetic lease, financing lease or loan, and that Lessor
shall be entitled to all the benefits of ownership of the Leased
Property, including but not limited to depreciation for all
federal, state and local tax purposes.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
"Lessor"
ARC RICHMOND PLACE REAL ESTATE HOLDINGS, LLC
ARC HOLLAND REAL ESTATE
HOLDINGS, LLC
ARC SUN CITY CENTER REAL ESTATE HOLDINGS, LLC
ARC LAKE SEMINOLE SQUARE REAL ESTATE HOLDINGS, LLC
ARC BRANDYWINE REAL ESTATE
HOLDINGS, LLC
each, a Delaware limited liability company
WITNESSED: By: ARCPI Holdings, Inc., a Delaware
corporation, its member
---------------------- By:
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Witness Title:
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Witness
WITNESSED: By: Health Care Property Investors, Inc., a
Maryland corporation, its member
---------------------- By:
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Witness ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Senior Vice President,
General Counsel and Corporate Secretary
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Witness
[Signature pages continue]
"Lessee"
FORT AUSTIN LIMITED PARTNERSHIP,
a Texas limited partnership
WITNESSED: By: ARC Fort Austin Properties, LLC, its
general partner
---------------------- By:
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Witness Title:
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Witness
ARC SANTA CATALINA, INC., a Tennessee corporation
ARC RICHMOND PLACE, INC., a Delaware corporation
LAKE SEMINOLE SQUARE
MANAGEMENT COMPANY, INC., a Tennessee corporation
FREEDOM GROUP-LAKE SEMINOLE
SQUARE, INC., a Tennessee corporation
ABC BRANDYWINE, LLC, a Tennessee
limited liability company
WITNESSED: By:
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Title:
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Witness
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Witness
FREEDOM VILLAGE OF HOLLAND,
MICHIGAN, a Michigan general partnership
FREEDOM VILLAGE OF SUN CITY CENTER,
LTD., a Florida limited partnership
WITNESSED:
By: ARC Freedom, LLC, managing partner
By:
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Witness
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Witness
[Signature pages continue]
"Guarantor"
WITNESSED: ARCPI HOLDINGS, a Delaware corporation
---------------------- By:
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Witness Title:
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Witness