THIRD AMENDMENT TO AMENDED
AND RESTATED MASTER LEASE
THIS
THIRD AMENDMENT TO AMENDED AND RESTATED MASTER LEASE (this
"Amendment") is made and entered into as of January 31, 2006
(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 CY-FAIR
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"),
SUMMERVILLE AT IRVING ASSOCIATES, L.P., a Delaware limited
partnership ("Irving LP"), and SUMMERVILLE AT CHESTNUT HILL,
LLC, a Delaware limited liability company ("Chestnut Hill
LLC") (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,
Irving LP, and Chestnut Hill LLC 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, Venice LLC, Lakeland
Hills LP, and Irving LP (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"), as
further amended by that certain Second Amendment to Amended
and Restated Master Lease dated as of December 22, 2005 (the
"Second Amendment", and together with the Original Master
Lease and the First Amendment, the "Master Lease"), covering
the Leased Property of twenty-one (21) 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. 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 "Chestnut Hill Facility Contract of
Acquisition"), pursuant to which HCP is purchasing and
acquiring from Guarantor (or pursuant to which Guarantor is
causing to be transferred and conveyed to HCP) on and
effective as of the Effective Date, the real property located
in Columbus, Ohio and more particularly described on
Exhibit A 22 attached hereto, together with all
improvements and fixtures thereon, related rights and certain
Personal Property relating thereto (the "Chestnut Hill
Facility").
D. Effective
immediately upon the Effective Date and Closing Date (as
defined in the Chestnut Hill Facility Contract of
Acquisition), Lessor desires to add to the Leased Property and
lease to Lessee, and Lessee desires to lease from Lessor, the
Chestnut Hill Facility 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
the matters 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 Chestnut
Hill Facility 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 Chestnut Hill
Facility.
2.
Joint and Several Liability of Lessee. From and after the
Effective Date, Chestnut Hill LLC 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 unless the 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 and
the Second Amendment) to read, in their entireties, as
follows:
"Chestnut Hill Facility: That certain Facility located in
Columbus, Ohio."
"Chestnut Hill Facility Buyer's Contribution to Seller's Costs:
The `Buyer's Contribution to Seller's Costs' as defined in the
Chestnut Hill Facility Contract of Acquisition."
"Chestnut
Hill Facili Contract of Ac• uisition: As defined in
Recital C of this Amendment."
"Chestnut Hill 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%)."
"Chestnut Hill Facility Purchase Price: The sum of (I) the
Minimum Repurchase Price for the Chestnut Hill 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 the
Chestnut Hill Facility accruing from and after the Restatement Date
for the Chestnut Hill Facility and (B) any Capital Addition Costs
funded by Lessor for the Chestnut Hill Facility accruing from and
after the date of funding."
"Chestnut Hill Facility Put Event Price: The sum of (i) the
Minimum Repurchase Price for the Chestnut Hill Facility,
plus (ii) an amount which, upon the closing, equals an
annually compounded return equal to the Chestnut Hill Facility
Escalator per year on (A) the Allocated Initial Investment for the
Chestnut Hill Facility accruing from and after the Restatement Date
for the Chestnut Hill Facility and (B) any Capital Addition Costs
funded by Lessor for the Chestnut Hill Facility accruing from and
after the date of funding."
"Chestnut Hill Facility Transaction Costs: The 'Buyer's
Transaction Costs' as defined in the Chestnut Hill Facility
Contract of Acquisition."
(b)
Supplemented Definitions. The following definitions
appearing in Article II of the Original Master Lease (as
amended by the First Amendment and the Second Amendment) shall
be supplemented as follows:
Annual Minimum Capital Project Amount: With respect to the
Chestnut Hill Facility, during each Lease Year with respect to such
Facility, an amount equal to Forty-Four Thousand Dollars
($44,000.00).
Notwithstanding
the foregoing, Lessor and Lessee acknowledge that the initial
Annual Minimum Capital Project Amount for the Chestnut Hill
Facility represents an amount equal to (A) the number of
licensed units located at such Facility times (B) Four
Hundred Dollars ($400.00). In the event that the number of
licensed units for the Chestnut Hill Facility is increased or
decreased in accordance with the terms of the Master Lease, as
hereby amended, the Annual Minimum Capital Project Amount for
the Chestnut Hill 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 Facility
times (2) Four Hundred Dollars ($400.00).
Annual Minimum Capital Project Amount Overage: With respect to
the Chestnut Hill 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 the Chestnut Hill 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
the Chestnut Hill 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 the Chestnut Hill
Facility for such prior two (2) Lease Year period.
Deed: With respect to the Chestnut Hill Facility, "Deed" as
defined in the Chestnut Hill Facility Contract of
Acquisition.
Fair Market Rental: With respect to the Chestnut Hill Facility,
the definition of Fair Market Rental applicable to the Group 2
Facilities, the Group 3 Facilities, the Group 4 Facilities, and the
Group 5 Facilities but in each instance relating to the Chestnut
Hill Facility.
Lease Year: With respect to the Chestnut Hill Facility, the
first Lease Year for such Facility shall be the period commencing
on the Restatement Date with respect to such Facility and ending
January 31, 2007, and each subsequent Lease Year for such Facility
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 the Chestnut Hill 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 Chestnut Hill Facility,
the Effective Date of this Amendment, which shall also be the
commencement date of the Master Lease, as hereby amended, with
respect to such Facility.
Transaction Documents: The meaning given to such term in the
Original Master Lease (as amended by the First Amendment and the
Second Amendment), together with this Amendment and the Chestnut
Hill Facility 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 and the Second 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 "8.02%" 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 and the Second Amendment) shall read
"7.7%".
(e)
Leased Property; Tenn. The phrase "Group 3 Facilities, the
Group 4 Facilities and the Group 5 Facilities, the applicable
Restatement Date" appearing in the last paragraph of Article I of
the Original Master Lease (as amended by the First Amendment and
the Second Amendment) is hereby amended to read "Group 3
Facilities, the Group 4 Facilities, the Group 5 Facilities and the
Chestnut Hill Facility, the applicable Restatement
Date."
(f)
Minimum Rent. With respect to the Chestnut Hill
Facility:
(i) For
the period from the Effective Date through the expiration of
the first (0) Lease Year with respect to the Chestnut Hill
Facility, Lessee shall pay to Lessor as monthly "Allocated
Minimum Rent" for such 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 such Facility
shall be payable on the Effective Date (prorated as to any
partial calendar month at the beginning of the Term with
respect to such Facility); and
(ii) Commencing
upon the expiration of the first (1 st )
Lease Year for the Chestnut Hill Facility and upon the
expiration of each Lease Year thereafter during the Fixed Term
for such Facility, the then current monthly Allocated Minimum
Rent for such Facility for such Lease Year shall be increased
by an amount equal to the applicable Chestnut Hill Facility
Escalator.
(iii) For
the first (1 st )
Lease Year of each Extended Term for the Chestnut Hill
Facility, if any, the monthly Allocated Minimum Rent for such
Facility shall be equal to the greater of (a) the then current
monthly Fair Market Rental for such Facility and (b) the
monthly Allocated Minimum Rent payable for such Facility
during the last Lease Year of the immediately preceding Term,
as increased by the Chestnut Hill Facility
Escalator.
(iv)
Commencing upon the expiration of the first OM Lease Year of each
Extended Term, if any, for the Chestnut Hill Facility and upon the
expiration of each Lease Year thereafter during such Extended Term,
the then current monthly Allocated Minimum Rent for such Facility
shall be increased by an amount equal to the Chestnut Hill Facility
Escalator.
(v) The
last paragraph of 3.1 of the Original Master Lease shall apply
with respect to any adjustment of the Allocated Minimum Rent
with respect to the Chestnut Hill Facility pursuant to clauses
(ii), (iii), and (iv) above.
(vi) Lessee
shall continue to pay all Minimum Rent with
respec
