Exhibit 10.4
FIRST AMENDMENT TO AMENDED AND RESTATED
MASTER LEASE AGREEMENT
THIS FIRST AMENDMENT TO AMENDED AND RESTATED MASTER LEASE AGREEMENT ("Amendment") is dated as of July 16, 2001 (the "Effective Date") amongHEALTH CARE REIT, INC., a corporation organized under the laws of the State of Delaware ("HCRI" and a "Landlord"),HCRI NORTH CAROLINA PROPERTIES, LLC, a limited liability company organized under the laws of the State of Delaware ("HCRI-NC" and a "Landlord"),HCRI TENNESSEE PROPERTIES, INC., a corporation organized under the laws of the State of Delaware ("HCRI-TN" and a "Landlord"), andHCRI TEXAS PROPERTIES, LTD., a limited partnership organized under the laws of the State of Texas ("HCRI-TX" and a "Landlord"), each Landlord having its principal office located at One SeaGate, Suite 1500, P.O. Box 1475, Toledo, Ohio 43603-1475, andALTERRA HEALTHC ARE CORPORATION, a corporation organized under the laws of the State of Delaware ("Tenant"), having its chief executive office located at 10000 Innovation Drive, Milwaukee, Wisconsin 53226.
R E C I T A L S
A. Landlord and Tenant entered into an Amended and Restated Master Lease Agreement dated effective as of July 1, 2001 (the "Lease").
B. Landlord and Tenant desire to amend the Lease to include four additional Facilities located in Valparaiso, Indiana and Vero Beach, Florida (the "Additional Facilities") and as otherwise set forth herein.
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 parties hereto agree as follows.
1. Definitions. Any capitalized terms not defined in this Amendment shall have the meaning set forth in the Lease.
2. §1.4 of the Lease is hereby amended to add the following:
"Earnout Amount" means $250,000.00.
3. Effective Date. The definition of Effective Date in §1.4 of the Lease is hereby amended to read in its entirety as follows:
"Effective Date" means the date of this Amendment as set forth in the first paragraph hereof.
4. Lease Advance. The definition of Lease Advance in §1.4 of the Lease is hereby amended to read in its entirety as follows:
"Lease Advance" means [i] the Initial Lease Advance; [ii] the Lease Advance by Landlord to Tenant of even date of $12,750,000.00; [iii] the advance (if any) of the Earnout Amount made pursuant to §2.8; or [iv] any other advance of funds by Landlord to Tenant pursuant to the term of this Lease.
5. Lease Rate. The definition of Lease Rate in §1.4 of the Lease is hereby amended to add the following:
Notwithstanding anything to the contrary set forth in this definition of Lease Rate, commencing on the Effective Date of this Amendment, the Lease Rate for the remainder of the Initial Term is 10.72%.
6. Earnout Disbursement. Article 2 of the Lease is hereby amended to add the following §2.8:
2.8 Earnout Disbursement. If Tenant achieves an Additional Facility Coverage Ratio (hereinafter defined) of not less than 1.30 to 1.00 for eight consecutive quarters during the first four years of the Initial Term (including, if applicable, quarters prior to the commencement of the Initial Term), as evidenced by financial statements satisfactory to Landlord and provided that the Allocated Lease Amount for the Additional Facilities after payment of the Earnout Payment is less than ninety percent (90%) of the appraisal value of the Additional Facilities, Landlord shall disburse the Earnout Amount to Tenant upon Tenant's satisfaction of the following disbursement requirements: [i] Tenant shall pay all of Landlord's reasonable out-of-pocket expenses, including, without limitation, attorneys' fees and expenses, incurred in connection with the Earnout Amount disbursement; [ii] no uncured Event of Default exists under this Lease and no event has occurred which, wit h the giving of notice, the passage of time or both, would constitute an Event of Default; and [iii] no material adverse change in the condition of Landlord or the Leased Property exists. For purposes of this §2.8 only, the Additional Facility Coverage Ratio shall be determined in the same manner as the Portfolio Coverage Ratio (defined in §15.7.1(c)) except all references to Portfolio shall be deleted and shall be replaced with Additional Facilities in both §15.7.1(b) and (c). For purposes of this §2.8, the calculation of the Additional Facility Coverage Ratio shall be made as if the Earnout Amount was included in the Lease Amount at the commencement of the period of 16 consecutive quarters for which the calculation is being made. Landlord shall not be obligated to disburse the Earnout Amount if Tenant does not satisfy the foregoing disbursement requirements within six months after the Additional Facility Coverage Ratio requirement has been satisfied.
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7. Repairs. Article 2 of the Lease is hereby amended to add the following §2.9:
a. Roof Repair Escrow. Tenant acknowledges that there are certain roof repairs and other miscellaneous repairs (collectively "Repairs") required at Alterra Sterling House of Valparaiso and Alterra Clare Bridge Cottage at Valparaiso (collectively "Valparaiso Facilities"). Tenant agrees to cause the seller of the Valparaiso Facilities to escrow $150,000.00 ("Escrow Amount") of the proceeds from the sale of the Valparaiso Facilities at the time of the Landlord's purchase of the Valparaiso Facilities.
b. Budget. As soon as possible but in no event later than 30 days after the Effective Date of this Amendment, Tenant shall provide Landlord with a budget setting forth the total cost for the Repairs of the Valparaiso Facilities, together with a construction contract for the Repairs. Upon approval of the budget and the construction contract, Landlord shall release as much of the Escrow Amount as is necessary to retain 125% of the cost of the Repairs in escrow ("Amended Escrow Amount").c. Disbursement of Amended Escrow Amount. Landlord may make disbursements of the Amended Escrow Amount from time to time as repairs progress, but shall not be obligated to disburse more frequently than once in each calendar month and shall not be obligated to disburse until at least five Business Days following receipt of all documentation required for such disbursement.d. Documents Required for Disbursement. Prior to the disbursement of any Amended Escrow Amount, Tenant shall have provided Landlord with the following: [i] budget; [ii] construction contract; [iii] disbursement voucher; and [iv] sworn statements, waivers of lien or such other documents as may be required to ensure Landlord that there are no mechanics liens.e. Disbursement of Remaining Funds. Landlord shall not be obligated to make any disbursement except from the Amended Escrow Amount. In the event that all costs for the Repairs have been paid and upon the earlier of [i] a sufficient amount of time passing to ensure that there are no mechanics liens; or [ii] Landlord receiving the appropriate lien waivers under Indiana law to release any and all mechanics liens, Landlord shall disburse any funds remaining in the Amended Escrow Amount to Tenant.-3-
8. Commitment Fee. Article 2 of the Lease is hereby amended to add the following §2.9:
2.9 Commitment Fee. On the Effective Date of this Amendment, Tenant shall pay a commitment fee to Landlord of $127,500.00.
9. Representations and Warranties. Article 22 of the Lease is hereby amended to make all representations and warranties effective as of the Effective Date.
10. Legal Description. Exhibit A of the Lease is hereby amended by the addition of Exhibit A-37 through Exhibit A-39 hereto.
11. Permitted Exceptions. Exhibit B of the Lease is hereby amended by the addition of Exhibit B-37 through Exhibit B-39 hereto.
12. Facility Information. Exhibit C of the Lease is hereby amended to read in its entirety as set forth on Exhibit C hereto.
13. Government Authorizations; Zoning Permits. Exhibit G of the Lease is hereby amended by the addition of those items set forth on Exhibit G hereto.
14. Affirmation. Except as specifically modified by this amendment, the terms and provisions of the Lease are hereby affirmed and shall remain in full force and effect.
15. Binding Effect. This Amendment will be binding upon and inure to the benefit of the successors and permitted assigns of Landlord and Tenant.
16. Further Modification. The Lease may be further modified only by writing signed by Landlord and Tenant.
17. Counterparts. This Amendment may be executed in multiple counterparts, each of which shall be deemed an original hereof, but all of which will constitute one and the same document.
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IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment as of the date first set forth above.
Signed and acknowledged in the presence of: | HEALTH CARE REIT, INC. |
Signature/s/ Rita J. Rogge | By:/s/ Eric C. Ibele |
Print NameRita J. Rogge | Title: Vice President and Corporate Secretary |
| | |
Signature/s/ Margaret G. Stick | |
Print NameMargaret G. Stick | |
| | |
| | |
| | HCRI NORTH CAROLINA PROPERTIES, LLC |
| | By: Health Care REIT, Inc. Member |
Signature/s/ Rita J. Rogge | By:/s/ Eric C. Ibele |
Print NameRita J. Rogge | Title: Vice President and Corporate Secretary |
| | |
Signature/s/ Margaret G. Stick | |
Print NameMargaret G. Stick | |
| | |
| | |
| | HCRI TENNESSEE PROPERTIES, INC. |
Signature/s/ Rita J. Rogge | By:/s/ Eric C. Ibele |
Print NameRita J. Rogge | Title: Vice President and Corporate Secretary |
| | |
Signature/s/ Margaret G. Stick | |
Print NameMargaret G. Stick | |
| | |
| | |
| | HCRI TEXAS PROPERTIES, LTD. |
| | By: Health Care REIT, Inc. |
| | General Partner |
Signature/s/ Rita J. Rogge | |
Print NameRita J. Rogge | By:/s/ Eric C. Ibele |
| | Title: Vice President and Corporate Secretary |
Signature/s/ Margaret G. Stick | |
Print NameMargaret G. Stick | |
| | |
| | ALTERRA HEALTHCARE CORPORATION |
Signature/s Peter Ferge | By:/s/ Kristin A. Ferge |
Print Name Peter Ferge | Title:Vice President |
| | |
Signature/s/ Lisa Ulicki | |
Print Name/s/ Lisa Ulicki | TAX I.D. No.: 39-1771281 |
S-1
STATE OF OHIO )
) SS:
COUNTY OF LUCAS )
The foregoing instrument was acknowledged before me this 16th day of July, 2001 by Erin C. Ibele, the Vice President and Corporate Secretary of Health Care REIT, Inc., a Delaware corporation, on behalf of the corporation.
/s/ Rita J. Rogge
Notary Public
My Commission Expires: [SEAL]
STATE OF OHIO )
) SS:
COUNTY OF LUCAS )
The foregoing instrument was acknowledged before me this 16th day of July, 2001 by Erin C. Ibele, the Vice President and Corporate Secretary of Health Cre REIT, Inc., a Delaware corporation and the sole member of HCRI North Carolina Properties, LLC, a limited liability company organized under the laws of the State of Delaware on behalf of the limited liability company.
/s/ Rita J. Rogge
Notary Public
My Commission Expires: [SEAL]
STATE OF OHIO )
) SS:
COUNTY OF LUCAS )
The foregoing instrument was acknowledged before me this 16th day of July, 2001 by Erin C. Ibele, the Vice President and Corporate Secretary of HCRI Tennessee Properties, Inc., a corporation organized under the laws of the State of Delaware on behalf of the corporation.
/s/ Rita J. Rogge
Notary Public
My Commission Expires: [SEAL]
S-2
STATE OF OHIO )
) SS:
COUNTY OF LUCAS )
The foregoing instrument was acknowledged before me this 16th day of July, 2001 by Erin C. Ibele, the Vice President and Corporate Secretary of Health Care REIT, Inc., a Delaware corporation and the general partner of HCRI Texas Properties, Ltd., a limited liability partnership organized under the laws of the State of Texas on behalf of the limited partnership. organized under the laws of the State of Delaware on behalf of the corporation.
/s/ Rita J. Rogge
Notary Public
My Commission Expires: [SEAL]
STATE OF WISCONSIN )
) SS:
COUNTY OF MILWAUKEE)
The foregoing instrument was acknowledged before me this 14th day of July, 2001 by Kristin A. Ferge, the Vice President of Alterra Healthcare Corporation, a Delaware corporation, on behalf of the corporation.
/s/ J. C. Hansen
Notary Public
THIS INSTRUMENT PREPARED BY:
Oksana M. Ludd, Esq.
Shumaker, Loop & Kendrick, LLP
1000 Jackson
Toledo, Ohio 43624
S-3
EXHIBIT C: FACILITY INFORMATION
| | | Allocated Lease | Facility Type (per license) |
| | Facility Name/Address | Amount | Beds/Units |
| 1. | Clare Bridge of Bradenton
6101 Pointe W Blvd.
Bradenton, FL 34209
Manatee County | $3,550,000 | Assisted Living
40 beds
34 units
|
| | | | |
| 2. | Clare Bridge of Sarasota
8450 McIntosh Road
Sarasota, FL 34238
Sarasota County | $3,650,000 | Assisted Living
38 beds
34 units |
| | | | |
| 3. | Sterling House of Ponca City
1500 E. Bradley Avenue
Ponca City, OK 74604
Kay County | $1,650,000 | Assisted Living
39 beds
39 units |
| | | | |
| 4. | Sterling House of Norman
1701 Alameda Street
Norman, OK 73071
Cleveland County | $1,539,000 | Assisted Living
39 beds
39 units |
| | | | |
| 5. | Sterling House of Lawton
6302 W. Lee Road
Lawton, OK 73505
Comanchie County | $1,600,000 | Assisted Living
42 beds
42 units |
| | | | |
| 6. | Sterling House of Bartlesville
5420 S.E. Adams Blvd.
Bartlesville, OK 74006
Washington County | $1,480,000 | Assisted Living
39 beds
39 units |
| | | | |
| 7. | Sterling House of Enid
4613 W. Willow Road
Enid, OK 73703
Garfield County | $1,480,000 | Assisted Living
39 beds
39 units |
| | | | |
| 8. | Sterling House of Stillwater
1616 McElroy Road
Stillwater, OK 74075
Payne County | $1,480,000 | Assisted Living
39 beds
39 units |
| | | | |
| 9. | Sterling House of Shawnee
3947 Kickapoo
Shawnee, OK 74804
Pottowatomie County | $1,480,000 | Assisted Living
39 beds
39 units |
| | | | |
| 10. | Sterling House of Midwest City
615 W. Blue Ridge Drive
Midwest City, OK 73110
Oklahoma County | $1,480,000 | Assisted Living
39 beds
39 units |
| | | | |
| 11. | Sterling House of Claremore
1605 N. Highway 88
Claremore, OK 74017
Rogers County | $1,582,500 | Assisted Living
43 beds
43 units |
| | | | |
| 12. | Sterling House of Waxahachie
2250 Brown Street
Waxahachie, TX 75165
Ellis County | $1,582,500 | Assisted Living
60 beds
50 units |
| | | | |
| 13. | Sterling House of Palestine
101 Trinity Court
Palestine, TX 75801
Anderson County | $1,582,500 | Assisted Living
43 beds
43 units |
| | | | |
| 14. | Sterling House of Muskogee
3211 E. Chandler Road
Muskogee, OK 74403
Muskogee County | $1,582,500 | Assisted Living
43 beds
43 units |
| | | | |
| 15. | Sterling House of Owasso
12807 E. 86th Place N.
Owasso, OK 74055
Tulsa County | $1,595,000 | Assisted Living
43 beds
43 units |
| | | | |
| 16. | Sterling House of Texarkana
4204 Moores Lane
Texarkana, TX 75503
Bowie County | $1,595,000 | Assisted Living
60 beds
50 units |
| | | | |
|
| 17. | Sterling House of N. Oklahoma City
2435 N.W. 122nd Street
N. Oklahoma City, OK 73120
Oklahoma County | $1,595,000 | Assisted Living
43 beds
43 units |
| | | | |
| 18. | Sterling House of Chickasha
801 Country Club Road
Chickasha, OK 74058
Grady County | $1,480,000 | Assisted Living
39 beds
39 units |
| | | | |
| 19. | Sterling House of Desoto
747 W. Pleasant Run
Desoto, TX 75115
Dallas County | $1,595,000 | Assisted Living
60 beds
50 units |
| | | | |
| 20. | Sterling House of Oklahoma City
2500 S.W. 89th Street
Oklahoma City, OK 73159
Oklahoma County | $1,480,000 | Assisted Living
39 beds
39 units |
| | | | |
| 21. | Sterling House of Duncan
915 Plato Road
Duncan, OK 73533
Stephens County | $1,450,000 | Assisted Living
39 beds
39 units |
| | | | |
| 22. | Sterling House of Cedar Hill
602 E. Beltline Road
Cedar Hill, TX 75104
Dallas County | $1,661,000 | Assisted Living
60 beds
50 units |
| | | | |
| 23. | Sterling House of Findlay
725 Fox Run Road
Findlay, OH 45840
Hancock County | $2,000,000 | Assisted Living
37 beds
37 units |
| | | | |
| 24. | Sterling House of Troy
81 S. Stanfield Road
Troy, OH 45373
Miami County | $2,200,000 | Assisted Living
37 beds
37 units |
| | | | |
| 25. | Sterling House of Georgetown
2600 University Drive E
Georgetown, TX 78626
Williamson County | $2,300,000 | Assisted Living
54 beds
54 units |
| | | | |
| 26. | Sterling House of Piqua
1744 W. High Street
Piqua, OH 45356
Miami County | $2,120,000 | Assisted Living
37 beds
37 units |
| | | | |
| 27. | Sterling House of Clarksville
2183 Memorial Drive
Clarksville, TN 37043
Montgomery County | $2,622,279 | Assisted Living
49 beds
49 units |
| | | | |
| 28. | Sterling House of Canton
1119 Perry Drive N.W.
Canton, OH 44708
Stark County | $2,398,100 | Assisted Living
42 beds
42 units |
| | | | |
| 29. | Clare Bridge of Oklahoma City
12401 Dorset Drive
Oklahoma City, OK 73120
Oklahoma County
(Still in retainage) | $3,200,000 | Assisted Living
38 beds
34 units |
| | | | |
| 30. | Sterling House of N. Augusta
105 N. Hills Drive
N. Augusta, SC 29841
Aiken County | $2,890,000 | Assisted Living
52 beds
52 units |
| | | | |
| 31. | Clare Bridge of Salem
1355 Boone Road S.E.
Salem, OR 97306
Marion County | $5,620,298 | Assisted Living
60 beds
60 units |
| | | | |
| 32. | Clare Bridge of Asheville
4 Walden Ridge Drive
Asheville, NC 28803
Buncombe County | $3,692,675 | Assisted Living
38 beds
34 units |
| | | | |
| 33. | Sterling House of Columbia
5011 Trotwood Avenue
Columbia, TN 38401
Maury County | $2,635,620 | Assisted Living
49 beds
49 units |
| | | | |
| 34. | Clare Bridge of Wilmington
3501 Converse Drive
Wilmington, NC 28403
New Hanover County | $3,200,939 | Assisted Living
38 beds
34 units |
| | | | |
| 35. | Clare Bridge of Everett
2015 Lake Heights Drive
Everett, WA 98208
Snohomish County | $6,876,202 | Assisted Living
52 beds
46 units |
| | | | |
| 36. | Sterling House of Edmond
116 W. Danforth Road
Edmond, OK 73003
Oklahoma County | $1,739,000 | Assisted Living
43 beds
43 units |
| | | | |
| 37. | Sterling House of Valparaiso
2601 Valparaiso St.
Valparaiso, IN 46383
Porter County | $2,670,000 | Residential Care
42 beds
42 units |
| | | | |
| 38. | Alterra Clare Bridge Cottage of Valparaiso
2501 Valparaiso St.
Valparaiso, IN 46383
Porter County | $3,070,000 | Residential Care
36 beds
32 units |
| | | | |
| 39. | Alterra Sterling House of Vero Beach
410 4th Court
Vero Beach, FL 32962
Indian River County | $3,560,000 | Residential Care
42 beds
42 units |
| | | | |
| 40. | Alterra Clare Bridge Cottage of Vero Beach
420 4th Court
Vero Beach, FL 32962
Indian River County | $3,450,000 | Residential Care
36 beds
32 units |
| | | | |
| | TOTAL | $94,415,113 | |
