FIFTH AMENDMENT TO MASTER LEASE (Phase I)
Exhibit
10.10
[Boynton
Beach, Florida]
[Delray,
Florida]
[Jacksonville,
Florida]
[Cleveland,
Ohio]
[Houston,
Texas]
[San
Antonio, Texas]
[Victoria,
Texas]
FIFTH
AMENDMENT TO MASTER LEASE
(Phase
I)
THIS
FIFTH AMENDMENT TO MASTER LEASE (PHASE I) (this “Amendment”)
is
made and entered into as of this 30th day of June, 2005 (the “Effective
Date”),
by
and between HEALTH CARE PROPERTY INVESTORS, INC., a Maryland corporation
(“HCP”)
and
TEXAS HCP HOLDING, L.P., a Delaware limited partnership (collectively, as their
interests may appear, “Lessor”),
on
the one hand, and ARC
RICHMOND HEIGHTS, LLC, a Tennessee limited liability company, ARC BOYNTON BEACH,
LLC, a Tennessee limited liability company, ARC DELRAY BEACH, LLC, a Tennessee
limited liability company, ARC VICTORIA, L.P., a Tennessee limited partnership,
ARC CARRIAGE CLUB OF JACKSONVILLE, INC., a Tennessee corporation, ARC SHAVANO,
L.P., a Tennessee limited partnership and ARC POST OAK, L.P., a Tennessee
limited partnership (collectively and jointly and severally, “Lessee”),
on
the other hand.
RECITALS
A. Lessor
is
the “Lessor” and Lessee is the current “Lessee” pursuant to that certain Master
Lease dated March 29, 2002 (the “Original
Lease”),
as
amended by that certain First Amendment to Lease dated September 30, 2002 (the
“First
Amendment”),
that
certain Second Amendment to Lease (Phase I) dated February 28, 2003 (the
“Second
Amendment”),
that
certain Third Amendment to Lease (Phase I) dated September 23, 2003 (the
“Third
Amendment”)
and
that certain Fourth Amendment to Master Lease (Phase I) dated July 15, 2004
(the
“Fourth
Amendment”).
The
Original Lease, as amended by the First Amendment, Second Amendment, Third
Amendment and Fourth Amendment shall be referred to herein, collectively, as
the
“Lease.”
B. The
Lessee’s obligations under the Lease are guaranteed by (i) ARCPI Holdings, Inc.,
a Delaware corporation (“ARCPI”)
pursuant to a written Guaranty of Obligations dated as of March 29, 2002, as
amended by that certain First Amendment to Guaranty of Obligations dated as
of
February 28, 2003 (the “First
Amendment to ARCPI Guaranty”),
and
that certain Second Amendment to Guaranty of Obligations of even date herewith
(the “Second
Amendment to ARCPI Guaranty”)
(as the same may be further amended and reaffirmed from time to time in
accordance with the terms thereof, the “ARCPI
Guaranty”),
and
(ii) American Retirement Corporation, a Tennessee corporation (“ARC”),
pursuant to that certain written Guaranty of Obligations (Phase I) of even
date
herewith (as the same may be further amended and reaffirmed from time to time
in
accordance with the terms thereof, the “ARC
Guaranty”).
ARCPI
and ARC shall sometimes be referred to herein and in the Lease, collectively,
as
“Guarantors,”
and
individually as a “Guarantor,”
and
the ARCPI Guaranty and the ARC Guaranty shall sometimes be referred to herein
and in the Lease, collectively, as “Guaranties,”
and
individually as a “Guaranty.”
-1-
C. The
Lease
covers the “Leased
Property”
of four
(4) separate assisted living facilities located in Cleveland, Ohio, Delray,
Florida, Boynton Beach, 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.
▇. ▇▇▇▇▇▇
and Lessee desire to amend the Lease, but only on the terms and conditions
set
forth herein.
E. Capitalized
terms used herein and not defined herein shall have the meanings given such
terms in the Lease.
AMENDMENT
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.
Addition
of ARC Guaranty.
Notwithstanding anything to the contrary in the Lease, as hereby amended,
including the prior release of ARC as a “Guarantor”
pursuant to the First Amendment, from and after the Effective Date ARC is hereby
added as a “Guarantor”
under
the Lease, as hereby amended, pursuant to the ARC Guaranty, and the definitions
of “Guarantor”
and
“Guaranty”
appearing in Article II of the Original Lease shall include, respectively,
(i)
ARCPI and ARC and (ii) the ARCPI Guaranty and the ARC
Guaranty.
2.
Release
of Letter of Credit and Provisions Relating to Cash Security Deposit.
(a) Effective
as of the Effective Date, the provisions of Article XXI of the Original Lease
shall have no further force or effect and Lessor shall promptly return to Lessor
the letters of credit currently being held by Lessor pursuant to such Article
XXI. Additionally, the Lease shall be further amended in the following
particulars:
(i) The
definitions of “Letter
of Credit Amount,”“Victoria
Letter of Credit Amount”
and
“Letter
of Credit Date”
shall
be deleted from Article II of the Original Lease, as amended by the Second
Amendment, and the following new definitions shall be added to such Article
II:
“Cash
Security Deposit:
A cash
security deposit with Lessor in the amount of the Cash Security Deposit Amount,
as may be required pursuant to the provisions of this Lease”
“Cash
Security Deposit Amount:
The sum
of Five Million Dollars ($5,000,000.00).”
(ii) The
phrase “Lessee shall fail to obtain a letter of credit as required by
Article XXI” appearing in Section 16.1(d) of the Original Lease is hereby
amended to read “Lessee shall fail to deposit with Lessor any Cash Security
Deposit required by this Lease.”
-2-
(iii) Section
31.2.5 of the Original Lease is hereby amended to read, in its entirety, as
follows:
“31.2.5 Lessee’s
obligation to provide any Cash Security Deposit pursuant to any provision of
this Lease shall be segregated so that (a) the applicable Lessee shall be
required to provide a Cash Security Deposit (if any) pursuant to the New Lease,
on the same terms and conditions as set forth in this Lease, except that “Cash
Security Deposit Amount” under the New Lease shall mean an amount equal to the
then existing Cash Security Deposit Amount under this Lease (prior to the
amendment contemplated in Section 31.2.2 above), times a fraction, the numerator
of which is the then existing annual Allocated Minimum Rent for the Separated
Propert(ies), and the denominator of which is the then existing total annual
Minimum Rent payable for all Facilities (including the Separated Propert(ies)),
and (b) the “Cash Security Deposit Amount” under this Lease (as amended) shall
be reduced by the “Cash Security Deposit Amount” for the New Lease determined in
accordance with subsection (a) above.”
(iv) Exhibit
D
to the
Original Lease is hereby deleted.
(v) Section
4
of the Second Amendment shall have no further force or effect.
(b) Quarterly
Cash Flow Coverage; Cash Security Deposit and Impound Accounts for Added
Facilities.
(i) Without
in any way limiting Lessee’s obligations under Section 25.1.2 of the Original
Lease, within thirty (30) days of the end of each Quarter during the Term for
each Facility commencing with the first Quarter following the Effective Date
of
this Amendment, Lessee shall provide such information to Lessor as necessary
for
Lessor to ascertain Lessee’s Cash Flow Coverage for such Quarter. If for any two
(2) consecutive Quarters following the Effective Date, the average Cash Flow
Coverage for all Facilities is less than 1.1 or upon the occurrence of any
monetary Event of Default (i.e., following any applicable notice and cure
period)(in either case, a “Triggering
Event”),
then
Lessee shall deposit with Lessor the Cash Security Deposit as additional
security for Lessee’s obligations under the Lease, as hereby amended, in the
Cash Security Deposit Amount; provided, however, that at Lessee’s option, Lessee
shall be entitled to fund such Cash Security Deposit in ten (10) equal monthly
installments commencing upon the first (1st)
day of
the first calendar month following such Triggering Event and continuing
thereafter on the first (1st)
day of
each month until funded in its entirety. Lessor shall either keep the Cash
Security Deposit in a separate interest-bearing account as may be selected
by
Lessor from time to time, or may commingle the Cash Security Deposit with its
general funds so long as Lessor credits and adds to the Cash Security Deposit
each month an amount equal to the interest that would have been earned on the
Cash Security Deposit had Lessor invested the same in an interest-bearing
account, as reasonably determined by Lessor. In either case, all earned interest
or deemed interest on such Cash Security Deposit shall be added to and become
part of the Cash Security Deposit and held and applied by Lessor in accordance
with the provisions of this Section 2(b). All interest or deemed interest earned
on the Cash Security Deposit shall be for the account of Lessee and Lessee
shall
promptly deliver to Lessor upon request any Internal Revenue Service Form W-9
or
such other certification as Lessor may reasonably request in connection with
the
investment of such Cash Security Deposit. No notice to Lessee shall be required
to enable Lessor to draw upon or apply such Cash Security Deposit. In the event
of a transfer of Lessor’s interest in the Leased Property, Lessor shall 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 agreed that the provisions hereof shall apply to every
transfer or assignment of such Cash Security Deposit to a new Lessor.
-3-
(ii) If,
at
any time after a Triggering Event, no further monetary Event of Default exists
and the average Cash Flow Coverage for all Facilities for three (3) consecutive
Quarters is greater than 1.1, then Lessor shall release to Lessee the Cash
Security Deposit. Any subsequent Triggering Event shall, however, entitle Lessor
to require that Lessee again fund such Cash Security Deposit in accordance
with
the provisions of this Section 2(b).
(iii) Lessor
shall have the right to apply all or any portion of the Cash Security Deposit
up
to its full amount, as applicable, whenever (A) an Event of Default hereunder
has occurred, (B) an event of default beyond applicable periods of notice and
cure under any other lease or agreement between Lessor or an Affiliate of Lessor
and Lessee or an Affiliate of Lessee or under any other letter of credit,
guaranty, mortgage, deed of trust, or other instrument now or hereafter executed
by Lessee or an Affiliate of Lessee in favor of Lessor or an Affiliate of Lessor
has occurred or (C) an event or circumstance has occurred which with notice
or
passage of time, or both, would constitute an Event of Default hereunder or
an
event of default under any such other lease, agreement, letter of credit,
guaranty, mortgage, deed of trust or other instrument, notwithstanding that
transmittal of any such notice may be barred by applicable law. No such
application of the Cash Security Deposit shall (1) cure or constitute a waiver
of an Event of Default, (2) be deemed to fix or determine the amounts to which
Lessor is entitled to recover under the Lease, as hereby amended, or otherwise,
or (3) be deemed to limit or waive Lessor’s right to pursue any remedies
provided for in the Lease, as hereby amended. If any portion of the Cash
Security Deposit is applied by Lessor, Lessee shall, within two (2) business
days after demand by Lessor, cause an amount equal to the amount of Cash
Security Deposit previously applied to be paid to Lessor in order to replenish
the Cash Security Deposit to the full required amount.
(iv) LESSEE
WAIVES THE PROVISIONS OF ANY APPLICABLE LAWS NOW IN FORCE OR THAT BECOME IN
FORCE AFTER THE EFFECTIVE DATE HEREOF, 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 OF THE LEASE.
-4-
Lessee’s
Initials:
(v) If
Lessee
shall fully and faithfully perform every provision of the Lease, as hereby
amended, to be performed by Lessee, upon the expiration of the Term of the
Lease, as hereby amended, with respect to the last Facility the Cash Security
Deposit shall be applied against any amounts owed by Lessee to Lessor and any
balance thereof shall be returned to Lessee (or at Lessor's option, to the
last
permitted assignee of Lessee’s interest under the Lease, as hereby amended)
within ninety (90) days after the expiration of such Term.
3. 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.
4. 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.
5. 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.
[SIGNATURE
PAGE FOLLOWS]
-5-
IN
WITNESS WHEREOF, the parties hereto have executed this Amendment as of the
day
and year first above written.
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WITNESS
|
“Lessor”
|
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Witness
Witness
|
HEALTH
CARE PROPERTY INVESTORS, INC., a Maryland corporation
By:
Title:
|
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Witness
Witness
|
TEXAS
HCP HOLDING, L.P., a Delaware limited partnership
By: Texas
HCP G.P., INC., a Delaware
corporation,
its sole General Partner
By:
Title:
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[Signature
pages continue]
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-6-
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WITNESS
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“Lessee”
|
|
Witness
Witness
|
ARC
RICHMOND HEIGHTS, LLC,
a
Tennessee limited liability company
ARC
DELRAY BEACH, LLC,
a
Tennessee limited liability company
ARC
BOYNTON BEACH, LLC,
a
Tennessee limited liability company
ARC
CARRIAGE CLUB OF JACKSONVILLE,
INC.,
a Tennessee corporation
By:
Title:
|
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Witness
Witness
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ARC
VICTORIA, L.P., a Tennessee limited partnership
By: ARC
Homewood Victoria, Inc., a Tennessee corporation, its general
partner
By:
Title:
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Witness
Witness
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ARC
POST OAK L.P., a Tennessee limited partnership
By: ARC
Hampton Post Oak, Inc., a Tennessee corporation, its general
partner
By:
Title:
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Witness
Witness
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ARC
SHAVANO, L.P., a Tennessee limited partnership
By: ARC
Shavano Park, Inc., a Tennessee corporation, its general
partner
By:
Title:
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