Exhibit 10.1
OP CONTRIBUTION
AGREEMENT
OP CONTRIBUTION AGREEMENT, dated as
of April 12, 2005 (this “ Agreement ”), among
VENTAS, INC. (“ Parent ”), ELDERTRUST OPERATING
LIMITED PARTNERSHIP (“ Parent OP ”) and the
undersigned holder (the “ Holder ”) of common
units of limited partnership interests (the “ LTIP
Units ”) issued pursuant to the Long Term Incentive Plan
of PROVIDENT SENIOR LIVING TRUST (the “ Company
”).
WHEREAS, as of the date hereof,
Holder beneficially owns the number of LTIP Units set forth on the
Holder signature page hereto (the “ Contributed LTIP
Units ”);
WHEREAS, Parent, VTRP MERGER SUB,
LLC (“ Merger Sub ”) and the Company have
entered into an Agreement and Plan of Merger, dated as of April 12,
2005 (the “ Merger Agreement ”), which provides,
among other things, for the merger of the Company with and into
Merger Sub, upon the terms and subject to the conditions set forth
therein (the “ Merger ”);
WHEREAS, the Merger Agreement
provides that (i) Parent shall cause Parent OP to amend the limited
partnership agreement of Parent OP (the “ Class D
Amendment ”) in order to create Parent OP Units having
terms and conditions substantially as described in this Agreement
and (ii) Parent shall register the shares of Parent Common Stock
issuable upon conversion of the Parent OP Units pursuant to and in
accordance with the terms of the Registration Rights Agreement to
be executed and delivered by Parent as provided in the Merger
Agreement; and
WHEREAS, as a condition to the
willingness of Parent and Merger Sub to enter into the Merger
Agreement, and in order to induce Parent, Merger Sub and the
Company to enter into the Merger Agreement, Parent and Merger Sub
have required that Holder agree to enter into this
Agreement.
Capitalized terms used but not
otherwise defined in this Agreement have the meanings assigned to
such terms in the Merger Agreement.
NOW, THEREFORE, in consideration of
the representations, warranties, covenants and agreements contained
in this Agreement, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, and
intending to be legally bound hereby, the parties hereto agree as
follows:
Article I.
CONTRIBUTION OF CONTRIBUTED LTIP
UNITS
Section 1.1. Contribution of LTIP
Units and Issuance of OP Consideration. At the Effective Time, Holder shall contribute
all of the Contributed LTIP Units to Parent OP in exchange for the
issuance to Holder of the OP Consideration as set forth in Section
2.2(a) of the Merger Agreement. Holder agrees to convert any LTIP
Units issued to such Holder after the date hereof into shares of
Company Common Stock prior to the Effective Time. The
Company
may execute and deliver such instruments of
contribution or conversion on behalf of Holder at the Effective
Time if necessary in order to effectuate the intent and purposes of
this Agreement (it being understood that the Company is a third
party beneficiary of this provision).
Section 1.2. Issuance to Holder
of OP Consideration. At
the Effective Time, (i) Parent OP shall issue to Holder the OP
Consideration as set forth in Section 2.2(a) of the Merger
Agreement and (ii) Parent shall enter into the Registration Rights
Agreement substantially in the form attached as Exhibit E to the
Merger Agreement.
Section 1.3. Amendment to
Partnership Agreement.
(a) At the Effective Time, Parent OP
and Holder shall enter into the Class D Amendment to create the
Parent OP Units to be issued to Holder and to admit Holder as a
limited partner of Parent OP.
(b) The Class D Amendment shall
provide, among other things, that (i) each Parent OP Unit shall be
convertible at any time, at the holder’s election, initially
into one (1) share of Parent Common Stock (subject to customary
adjustments for stock splits, dividends, etc.); (ii) upon a
liquidation of Parent OP, distributions shall be made to holders of
the Parent OP Units in accordance with their respective capital
accounts (with capital accounts subject to the usual book-up
provisions); (iii) each Parent OP Units shall be freely
transferable by the holders thereof subject only to (A) federal and
applicable state securities laws (and that the only requirement to
any transferee being admitted as a limited partner in Parent OP
shall be the execution of a counterpart to Parent OP’s
limited partnership agreement) and (B) Parent OP not becoming
classified as a “publicly traded partnership” within
the meaning of Section 7704 of the Code as a consequence of such
transfer; (iv) each holder of a Parent OP Unit shall be entitled to
at least 30 days advance notice prior to the scheduled closing date
in the event that Parent OP intends to sell or otherwise dispose of
any of the properties acquired pursuant to the FBA SPA or the AHC
SPA in a manner that would result in taxable income or gain being
allocated to such holder in accordance with the requirements of
Section 704(c) of the Code; and (v) after the first anniversary of
the grant of the Parent OP Units, Parent OP may elect to cause the
redemption of such Parent OP Units for the number of shares of
Parent Common Stock that such Parent OP Units could then be
converted into.
(c) The Class D Amendment shall also
provide that each Parent OP Unit shall entitle the holder thereof
to distributions equal to the dividends payable on one (1) share of
Parent Common Stock at the same time as such dividends are payable
and for the same periods covered by such dividends. Parent OP Units
will be allocated federal taxable income of the Parent OP each
taxable year in an amount equal to (i) the amount of cash so
distributed to such Parent OP Units with respect to such taxable
year, plus (ii) the amount of any aggregate net losses of the
Parent OP allocated to such Parent OP Units in prior taxable years.
For this purpose, amounts distributed in accordance with
Parent’s dividend policy after the close of a taxable year,
but declared prior to the close of such taxable year, shall be
taken into account in determining the federal taxable income to be
allocated to the Parent OP Units with respect to such taxable
year.
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(d) The Class D Amendment (i) shall
not include any provision adversely affecting the rights of Holder
described in this Section 1.3 and (ii) shall provide that such
rights may not be amended with respect to a Holder without such
Holder’s consent.
Section 1.4. Transfer of
Contributed LTIP Units.
(a) Holder agrees that, during the
period from the date of this Agreement through the earlier of the
Effective Time and the Expiration Date (as defined below), Holder
shall not cause or permit any Transfer (as defined below) of any of
the Contributed LTIP Units to be effected without Parent’s
prior written consent. A Person shall be deemed to have effected a
“ Transfer ” of a security if such person
directly or indirectly: (i) sells, pledges, encumbers, grants an
option with respect to, transfers or disposes of such security or
any interest in such security; or (ii) enters into an agreement or
commitment providing for the sale of, pledge of, encumbrance of,
grant of an option with respect to, the transfer or disposition of
such security or any interest therein.
(b) Notwithstanding anything to the
contrary contained in Section 1.4(a), Holder may Transfer all or a
portion of the Contributed Units to any Eligible Transferee (as
defined below) without Parent’s consent, provided that such
Eligible Transferee agrees to be bound by this Agreement as a
Holder. For the purposes of this Section 1.4, an “
Eligible Transferee ” shall mean any corporation,
partnership, limited liability company or trust (or other
custodianship), the stockholders, partners, members or trustees, as
the case may be, of which include and may include only Holder and
his Eligible Persons; and “ Eligible Person ”
shall mean (x) the spouse of Holder, (y) the father or mother or
any brother or sister of Holder or (z) any lineal descendant of
Holder or of the spouse of such descendant.
Section 1.5. No Inconsistent
Actions by Holder. While
this Agreement is in effect, no party hereto shall take any action
inconsistent with the provisions of this Agreement.
Section 1.6. Additional
Documents. Parent and
Parent OP, on the one hand, and Holder (in its capacity as such),
on the other hand, each hereby covenants and agrees to execute and
deliver any additional docum
