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Exhibit 10.24.3
[Twelve
Oaks East, Texas]
[Twelve
Oaks Irving, Texas]
SECOND AMENDMENT TO AMENDED
AND RESTATED MASTER LEASE
THIS
SECOND AMENDMENT TO AMENDED AND RESTATED MASTER LEASE (this
"Amendment") is made and entered into as of December 21, 2005,
and deemed effective as of December 22, 2005 (the "Effective
Date"), by and among HEALTH CARE PROPERTY INVESTORS, INC., a
Maryland corporation ("HCP"), WESTMINSTER HCP, LLC, a Delaware
limited liability company ("Westminster HCP"), TEXAS HCP
HOLDING, L.P., a Delaware limited partnership ("Texas HCP"),
HCP AL OF FLORIDA, LLC, a Delaware limited liability company
("HCP AL") (HCP, Westminster HCP, Texas HCP, and HCP AL shall
be referred to herein, collectively, as their interests may
appear, as "Lessor"), on the one hand, and LH ASSISTED LIVING,
LLC, a Delaware limited liability company ("LHAL LLC"),
SUMMERVILLE AT COBBCO, INC., a California corporation ("Cobbco
Inc."), SUMMERVILLE AT HILLSBOROUGH, L.L.C., a New Jersey
limited liability company ("Hillsborough LLC"), SUMMERVILLE AT
OCOEE, INC., a Delaware corporation ("Ocoee Inc."),
SUMMERVILLE AT PORT ORANGE, INC., a Delaware corporation
("Port Orange Inc."), SUMMERVILLE AT PRINCE WILLIAM, INC., a
Delaware corporation ("Prince William Inc."), SUMMERVILLE AT
STAFFORD, L.L.C., a New Jersey limited liability company
("Stafford LLC"), SUMMERVILLE AT VOORHEES, L.L.C., a New
Jersey limited liability company ("Voorhees LLC"), SUMMERVILLE
AT WESTMINSTER, INC., a Maryland corporation ("Westminster
Inc."), SUMMERVILLE AT PINELLAS PARK, LLC, a Delaware limited
liability company ("Pinellas LLC"), SUMMERVILLE AT OCALA WEST,
LLC, a Delaware limited liability company ("Ocala West LLC"),
SUMMERVILLE AT CYFAIR ASSOCIATES, L.P., a Delaware
limited partnership ("Cy-Fair LP"), SUMMERVILLE AT FRIENDSWOOD
ASSOCIATES, L.P., a Delaware limited partnership ("Friendswood
LP"), SUMMERVILLE AT NEW PORT RICHEY, LLC, a Delaware limited
liability company ("New Port Richey LLC"), SUMMERVILLE AT
LAKELAND, LLC, a Delaware limited liability company ("Lakeland
LLC"), SUMMERVILLE AT ST. AUGUSTINE LLC, a Delaware limited
liability company ("St. Augustine LLC"), SUMMERVILLE AT OCALA
EAST, LLC, a Delaware limited liability company ("Ocala East
LLC"), SUMMERVILLE AT VENICE, LLC, a Delaware limited
liability company ("Venice LLC"), SUMMERVILLE AT LAKELAND
HILLS ASSOCIATES, L.P., a Delaware limited partnership
("Lakeland Hills LP"), and SUMMERVILLE AT IRVING ASSOCIATES,
L.P., a Delaware limited partnership ("Irving LP") (LHAL LLC,
Cobbco Inc., Hillsborough LLC, Ocoee Inc., Port Orange Inc.,
Prince William Inc., Stafford LLC, Voorhees LLC, Westminster
Inc., Pinellas LLC, Ocala West LLC, Cy-Fair LP, Friendswood
LP, New Port Richey LLC, Lakeland LLC, St. Augustine LLC,
Ocala East LLC, Venice LLC, Lakeland Hills LP, and Irving LP
shall be collectively, and jointly and severally, referred to
herein as "Lessee"), on the other hand, with respect to the
following:
RECITALS
A. Lessor,
as "Lessor," and LHAL LLC, Cobbco Inc., Hillsborough LLC,Ocoee
Inc., Port Orange Inc., Prince William Inc., Stafford LLC,
Voorhees LLC, Westminster Inc., Pinellas LLC, Ocala West LLC,
Cy-Fair LP, Friendswood LP, New Port Richey LLC, Lakeland LLC,
St. Augustine LLC, Ocala East LLC, and Venice LLC
(collectively, and jointly and severally, "Current Lessee"),
as "Lessee", are parties to that certain Amended and Restated
Master Lease dated as of April 20, 2005 (the "Original Master
Lease"), as amended by that certain First Amendment to Amended
and Restated Master Lease dated as of September 1, 2005 (the
"First Amendment," and together with the Original Master
Lease, the "Master Lease"), covering the Leased Property of
nineteen (19) mixed skilled nursing and assisted living care
Facilities located in California, Connecticut, Florida,
Maryland, New Jersey, Texas and Virginia. All capitalized
terms used in this Amendment and not otherwise defined or
modified herein shall have the meanings assigned to such terms
in the Master Lease.
B. Pursuant
to the terms of that certain Guaranty of Obligations dated as
of April 20, 2005 (as the same has been or may hereafter be
amended or reaffirmed from time to time in writing, the
"Guaranty"), made by Summerville Senior Living, Inc., a
Delaware corporation ("Guarantor") in favor of Lessor,
Guarantor guaranteed the obligations of Current Lessee under
the Master Lease, all as more particularly described
therein.
C. Texas
HCP, as Buyer, and Guarantor, as Seller, have entered into to
that certain Contract of Acquisition of even date herewith (as
the same may be amended or modified in accordance with the
terms thereof, the "Group 5 Facilities Contract of
Acquisition"), pursuant to which Texas HCP is purchasing and
acquiring from Guarantor (or pursuant to which Guarantor is
causing to be transferred and conveyed to Texas HCP) on and
effective as of the Effective Date, the
following:
(i) the
real property located in Dallas, Texas and more particularly
described on Exhibit A-20 attached hereto, together
with all improvements and fixtures thereon, related rights and
certain Personal Property relating thereto (the "Twelve Oaks
East Facility"); and
(ii) the
real property located in Irving, Texas and more particularly
described on Exhibit A-21 attached hereto, together
with all improvements and fixtures thereon, related rights and
certain Personal Property relating thereto (the "Twelve Oaks
Irving Facility").
The
Twelve Oaks East Facility and the Twelve Oaks Irving Facility
are sometimes referred to herein, individually, as a "Group 5
Facility," and collectively, as the "Group 5
Facilities."
D. Effective
immediately upon the Effective Date and Closing Date (as
defined in the Group 5 Facilities Contract of Acquisition),
Lessor desires to add to the Leased Property and lease to
Lessee, and Lessee desires to lease from Lessor, the Group 5
Facilities, and each of them, upon the terms and conditions
set forth in the Master Lease, as amended by this
Amendment.
G. Lessor
and Lessee desire to enter into this Amendment to effectuate
thematters set forth in the above Recitals, all as more
particularly described herein.
AMENDMENT
NOW
THEREFORE, in consideration of the foregoing Recitals and for
other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Lessor and
Lessee hereby agree as follows:
1.
Leasing. Lessor hereby leases to Lessee and Lessee hereby
leases from Lessor, the Leased Property of the Group 5 Facilities
upon all of the terms and conditions set forth in the Master Lease,
as amended by this Amendment. All references herein and in the
Master Lease to a "Facility" or "Facilities" shall mean each
Facility (as defined in the Master Lease) together with the Group 5
Facilities, and each of them.
2.
Joint and Several Liability of Lessee. From and after the
Effective Date, Lakeland Hills LP and Irving LP shall (i) be
jointly and severally liable for all of the obligations of the
"Lessee" under the Master Lease, as hereby amended, and (ii) assume
jointly and severally with Current Lessee, all obligations of
"Lessee" arising under the Master Lease, as hereby amended, on,
prior to or after the Effective Date.
3. [Intentionally
Omitted]
4.
Modifications to Terms of the Master Lease. Effective as of
the Effective Date, the Master Lease shall be amended and
supplemented in the following particulars:
(a)
New Definitions. Except as otherwise expressly provided or
unlessthe context otherwise requires, for all purposes of the
Master Lease, as hereby amended, the terms defined in this Section
4(a) shall have the meanings assigned to them as provided below and
shall be added to Article II of the Original Master Lease (as
amended by the First Amendment) to read, in their entireties, as
follows:
"Aggregate Costs of the Group 5 Facility Capital Renovation
Project(s): With respect to the Group 5 Facilities, the actual
out-of-pocket costs actually incurred by Lessee pursuant to the
provisions of the Master Lease, as hereby amended, in connection
with the Group 5 Facility Capital Renovation Project(s) for such
Facilities, including all costs of design, construction,
installation and obtaining all governmental approvals and permits
with respect to such Group 5 Facility Capital Renovation Project(s)
for such Facilities, the Group 5 Facility Capital Renovation Site
Review Fees for such Facilities and the Group 5 Facility Capital
Renovation Lessor Costs with respect to such
Facilities."
"Allocated Group 5 Buyer's Contribution to Seller's Costs: With
respect to each Group 5 Facility, an amount equal to the total
Group 5 Buyer's Contribution to Seller's Costs, multiplied by the
following applicable percentages relating such
Facility:
(a) Twelve
Oaks East Facility:
39.33%
(b) Twelve
Oaks Irving
Facility:
60.67%
Total: 100%
"Allocated Group 5 Buyer's Transaction Costs: With respect to
each Group 5 Facility, an amount equal to the total Group 5 Buyer's
Transaction Costs, multiplied by the following applicable
percentages relating such Facility:
(a) Twelve
Oaks East Facility:
39.33%
(b) Twelve
Oaks Irving
Facility:
60.67%
Total: 100%
"Group 5 Buyer's Contribution to Seller's Costs: The 'Buyer's
Contribution to Seller's Costs' as defined in the Group 5
Facilities Contract of Acquisition."
"Group 5 Buyer's Transaction Costs: The 'Buyer's Transaction
Costs' as defined in the Group 5 Facilities Contract of
Acquisition."
"Group 5 Facilities: Each of those Facilities identified as a
Group 5 Facility on Exhibit C attached hereto."
"Group 5 Facilities Contract of Acquisition: As defined in
Recital C of this Amendment."
"Group 5 Facility Capital Renovation Project(s): With respect
to the Group 5 Facilities, any capital refurbishment to either or
both such Facilities, the scope, plans and specifications, and a
detailed final cost budget of which is to be mutually agreed upon
by Lessor and Lessee after the Effective Date.
"Group 5 Facility Capital Renovation Project Allowance: With
respect to the Group 5 Facilities, a total aggregate allowance for
all Group 5 Facility Capital Renovation Project(s) equal to the
lesser of (i) Six Hundred Thousand and No/100 Dollars
($600,000.00), or (ii) the Aggregate Costs of the Group 5 Facility
Capital Renovation Project(s) with respect to such Facilities. The
Group 5 Facility Capital Renovation Project Allowance shall be
allocated to the Group 5 Facility Capital Renovation Project(s) at
each of the Group 5 Facilities as reasonably determined by Lessee.
Lessee shall deliver to Lessor written confirmation of such
allocation prior to Lessor's disbursement of the Group 5 Facility
Capital Renovation Project Allowance, or any portion thereof.
Notwithstanding anything to the contrary in the Master Lease, as
amended by this Amendment, the portion of the Group 5 Facility
Capital Renovation Project Allowance allocated to each of the Group
5 Facilities shall not count towards the Annual Minimum Capital
Project Amount with respect to each such Facility, and Lessee's
expenditure and reimbursement, if any, of all or a portion of the
Group 5 Facility Capital Renovation Project Allowance shall be in
addition to the Annual Minimum Capital Project Amount with respect
to each such Facility."
"Group 5 Facility Capital Renovation Project Allowance Lease
Rate: A percentage equal to the greater of (a) the average of
the ten-year U.S. Treasury Note rate published in the Wall
Street Journal for each of the five (5) Business Days prior to
that date which is two (2) Business Days prior to the Closing Date
and quoting the rate as of that date which is two (2) Business Days
prior to the Closing Date, plus Three and Ninety Hundredths Percent
(3.90%) and (b) Eight and One-Half Percent (8.5%)."
"Group 5 Facility Capital Renovation Site Review Fees: As
defined in Section 5 of this Amendment."
"Group 5 Facility Escalator: An amount equal to the greater of
(i) Seventy-Five Percent (75%) of the applicable CPI Increase or
(ii) Two and Three-Quarters Percent (2.75%).
"Group 5 Facility Purchase Price: With respect to each Group 5
Facility at any given time, the sum of (1) the Minimum Repurchase
Price for such Facility, plus (2) an amount
which, upon the closing or the applicable date, equals an annually
compounded return equal to Three Percent (3%) per year on (A) the
Allocated Initial Investment for such Facility accruing from and
after the applicable Restatement Date and (B) any Capital Addition
Costs funded by Lessor for such Facility accruing from and after
the date of funding.
"Group 5 Facility Put Event Price: With respect to any Group 5
Facility at any given time, the sum of (i) the Minimum Repurchase
Price for such Facility, plus (ii) an amount which, upon the
closing, equals an annually compounded return equal to the
applicable Group 5 Facility Escalator for such Facility per year on
(A) the Allocated Initial Investment for such Facility accruing
from and after the applicable Restatement Date and (B) any Capital
Addition Costs funded by Lessor for such Facility accruing from and
after the date of funding.
"Group 5 Facility Renovation Lessor Costs: As defined in
Section 5 of this Amendment."
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Texas."
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"Twelve Oaks East Facility: That certain Facility located in
Dallas,
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Texas."
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"Twelve Oaks Irving Facility: That certain Facility located in
Irving,
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(b)
Supplemented Definitions. The following definitions
appearing inArticle II of the Original Master Lease (as
amended by the First Amendment) shall be supplemented as
follows:
Annual Minimum Capital Project Amount: With respect to each
Group 5 Facility, during each Lease Year with respect to such Group
5 Facility, the following amounts:
(i)
With respect
to the Twelve Oaks East Facility, $68,000.00;
and
(ii)
With
respect to the Twelve Oaks Irving Facility, $80,800.00.
Notwithstanding
the foregoing, Lessor and Lessee acknowledge that the initial
Annual Minimum Capital Project Amount for each Group 5
Facility represents an amount equal to (A) the number of
licensed units located at such Group 5 Facility
times (B) Four Hundred Dollars ($400.00).
In the event that the number of licensed units for any Group 5
Facility is increased or decreased in accordance with the
terms of the Master Lease, as hereby amended, the Annual
Minimum Capital Project Amount for such Group 5 Facility shall
be increased, or decreased, as applicable, by an amount equal
to (1) the number of such licensed units increased or
decreased at such Group 5 Facility times (2) Four
Hundred Dollars ($400.00).
Annual Minimum Capital Project Amount Overage: With respect to
each Group 5 Facility for any Lease Year, an amount equal to (a)
the sum of (i) the Capital Project Costs incurred and paid by
Lessee in funding Capital Projects for each Group 5 Facility in the
immediately preceding two (2) Lease Years and for which Lessor has
received paid invoices, receipts or other commercially reasonable
evidence or supporting information as is customary to evidence such
expenditures, verifying the cost and payment of funding such
Capital Projects, and an Officer's Certificate certifying that the
applicable item(s) of Capital Projects have been completed, less
(ii) the amounts disbursed by Lessor to Lessee from any Replacement
Reserve on account of such Capital Projects to such Group 5
Facility in accordance with the terms of Section 9.3.1 of the
Master Lease, as hereby amended, in excess of (b) the Annual
Minimum Capital Project Amount for such Group 5 Facility for such
prior two (2) Lease Year period.
Capital Additions. With respect to each of the Group 5
Facilities, the applicable Group 5 Facility Capital Renovation
Project shall at all times be deemed a Capital Addition for
purposes of the Master Lease, as hereby amended, for such
Facility.
Capital Addition Costs. With respect to each of the Group 5
Facilities, the applicable portion of the Group 5 Facility Capital
Renovation Project Allowance allocated to each such Facility as
provided for herein shall be treated for all purposes as Capital
Addition Costs financed and paid for by Lessor under the Master
Lease, as hereby amended, for such Facility.
Deeds: With respect to each Group 5 Facility, "Deeds" as
defined in the Group 5 Facilities Contract of
Acquisition.
Fair Market Rental: With respect to each Group 5 Facility, the
definition of Fair Market Rental applicable to the Group 2
Facilities, Group 3 Facilities, and Group 4 Facilities, but in each
instance relating to such Group 5 Facility.
Lease Year: With respect to the Group 5 Facilities, the first
Lease Year for such Facilities shall be the period commencing on
the applicable Restatement Date with respect to such Facilities and
ending November 30, 2006, and each subsequent Lease Year for such
Facilities shall be each period of twelve (12) full calendar months
after the last day of the prior Lease Year; provided, however, that
the last Lease Year for any Group 5 Facility during the Term may be
a period of less than twelve (12) full calendar months and shall
end on the last day of the Term for such Facility.
Restatement Date: With respect to the Group 5 Facilities, the
Effective Date of this Amendment, which shall also be the
commencement date of the Master Lease, as hereby amended, with
respect to each Group 5 Facility.
Transaction Documents: The meaning given to such term in the
Original Master Lease (as amended by the First Amendment), together
with this Amendment and the Group 5 Facilities Contract of
Acquisition.
(c)
Definition of Lessee. The definition of "Lessee" appearing
in Article II of the Original Master Lease (as amended and restated
pursuant to the First Amendment) shall be further amended and
restated to have the meaning given to such term in the preamble of
this Amendment.
(d)
Amendment to Letter of Credit Amount. From and after the
Effective Date hereof, the percentage "8.8%" appearing in the
definition of "Letter of Credit Amount" in Article II of the
Original Master Lease (as amended and restated pursuant to the
First Amendment) shall read "8.02%".
(e)
Leased Property; Term. The phrase "Group 3 Facilities and
the Group 4 Facilities, the applicable Restatement Date" appearing
in the last paragraph of Article I of the Original Master Lease (as
amended by the First Amendment) is hereby amended to read "Group 3
Facilities, Group 4 Facilities and the Group 5 Facilities, the
applicable Restatement Date."
(f)
Minimum Rent. With respect to the Group 5
Facilities:
(i) Subject
to upward adjustments as provided in clause (ii) below, for
the period from the Effective Date through the expiration of
the first (1 st )
Lease Year with respect to such Group 5 Facilities, Lessee
shall pay to Lessor as monthly "Allocated Minimum Rent" for
each Group 5 Facility at the times and in the manner provided
in Section 3.1 of the Master Lease, as hereby amended, the
amount allocated to and set forth or determined pursuant to
the formula opposite such Facility on Exhibit C to the
Master Lease, as hereby amended. The first monthly payment of
Allocated Minimum Rent for each such Group 5 Facility shall be
payable on the Effective Date (prorated as to any partial
calendar month at the beginning of the Term with respect to
each such Facility); and
(ii) The
Allocated Minimum Rent with respect to each Group 5Facility
shall be increased automatically upon the date of disbursement
(if any) of the portion of the Group 5 Facility Capital
Renovation Project Allowance allocated to such Facility, to be
equal to the sum of (1) the monthly Allocated Minimum Rent in
effect immediately prior to such disbursement date,
plus (2) that amount equal to one-twelfth (1/12
th ) of
the product of (x) the portion of the Group 5 Facility Capital
Renovation Project Allowance allocated to such Facility,
times (y) the Group 5 Facility Capital Renovation
Project Allowance Lease Rate. Such monthly Allocated Minimum
Rent as so increased for such Facility shall remain in effect
for the balance of the then current Lease Year with respect to
such Facility. To the extent such increase does not occur on
the first (1 st )
day of a calendar month, then such increase for the applicable
month in which the same occurs shall be prorated
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