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EXHIBIT 10.115
AMENDMENT TO LEASES
This AMENDMENT TO LEASES (the "Amendment") is entered into and
effective as of the 30th day of November, 1998, by and among LTC PROPERTIES,
INC., a Maryland corporation ("LTC"), KANSAS-LTC CORPORATION (formerly known as
Coronado Corporation), a Delaware corporation ("Kansas-LTC"), AND TEXAS-LTC
LIMITED PARTNERSHIP, a Texas limited partnership ("Texas-LTC"), (LTC, Kansas-LTC
and Texas-LTC are sometimes hereinafter individually and collectively referred
to as "Lessor"), on the one hand, and ALTERNATIVE LIVING SERVICES, INC., a
Delaware corporation ("ALS"), and STERLING HOUSE CORPORATION, a Kansas
corporation ("SHC"), (ALS and SHC are sometimes hereinafter individually and
collectively referred to as "Lessee"), on the other hand.
RECITALS
A. Lessor and Lessee have heretofore entered into those certain
leases demising those certain real properties improved with assisted living
facilities in the locations and as otherwise described on the Schedule of Leases
attached hereto as EXHIBIT "A" and incorporated herein by this reference (each
individually a "Lease" and collectively, the "Leases").
B. Concurrently herewith, Lessor and Lessee are entering into those
certain Assignment and Assumptions of approximately even date herewith, whereby
SHC is assigning to ALS all of SHC's right, title, interest and estate under the
Leases described in Items 17, 18, 19, 20, 21, 22, 26, 28 and 29 of EXHIBIT "A"
attached hereto (the "Assumed Leases"), and ALS is assuming the obligations and
liabilities of SHC under the Assumed Leases.
C. Lessor and Lessee desire to amend all of the Leases as set forth
herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Lessor and Lessee hereby agree as
follows:
1. LESSOR MAY GRANT LIENS. The Leases are hereby amended to delete
in its entirety Article XXXII containing Paragraphs 32.1, 32.2 and 32.3, and to
replace it with the following:
"ARTICLE XXXII
32.1 LESSOR MAY GRANT LIENS. Without the consent of Lessee, but
subject to the terms and conditions set forth below in this Paragraph 32.1,
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Lessor may, from time-to-time, directly or indirectly, create or otherwise cause
to exist any lien or encumbrance or any other change of title ("Encumbrance")
upon the Leased Property, or any portion thereof or interest therein, whether to
secure any borrowing or other means of financing or refinancing or other-wise.
Provided that Lessee receives the non-disturbance agreement described below,
this Lease is and at all times shall be subject and subordinate to any such
Encumbrance which may now or hereafter affect the Leased Property and to all
renewals, modifications, consolidations, replacements and extensions thereof.
This clause shall be self-operative and no further instruments of subordination
shall be required; provided, however that, at any time from time to time, within
ten (10) days after the request by Lessor or any holder of any Encumbrance,
Lessee shall execute an agreement to the effect that this Lease shall be subject
and subordinate to the lien of any such new Encumbrance on the Leased Property,
and that in the event of any default or foreclosure under such Encumbrance,
Lessee shall attorn to the holder of such lien, and as otherwise requested by
Lessor; provided further, however, that the subjection and subordination of this
Lease and Lessee's leasehold interest hereunder to any Encumbrance hereafter
imposed by Lessor shall be conditioned upon the execution by the holder of such
Encumbrance and delivery to Lessee of a commercially reasonable non-disturbance
agreement specifying, among other things, that (a) so long as Lessee is not in
default and no event has occurred which with the passage of time or the giving
of notice or both would constitute a default under this Lease, in the event of
any foreclosure, judicial sale or deed in lieu of foreclosure, Lessee's rights
and leasehold estate hereunder shall not be disturbed by the holder of such
Encumbrance, its successors or assigns or any successful bidder; and (b)
notwithstanding such subordination, so long as Lessor is not in default and no
event has occurred which with the passage of time or the giving of notice or
both would constitute a default under such Encumbrance, the holder of such
Encumbrance will recognize the rights of the parties under the terms of this
Lease with respect to the disposition of insurance payments and condemnation
proceeds in the event of any casualty or condemnation.
32.2 ATTORNMENT. If Lessor's interest in the Leased Property is
sold or conveyed upon the exercise of any remedy provided for in any
Encumbrance, or otherwise by operation of law: (i) at the new owner's option,
Lessee shall attorn to and recognize the new owner as Lessee's lessor under this
Lease, in which case this Lease shall automatically become a new lease between
Lessee and the new owner upon all of the terms and conditions hereof, or enter
into a new lease in the exact form and substance of this Lease with the new
owner, and Lessee shall take such actions to confirm the foregoing within ten
(10) Business Days after request; and (ii) the new owner (other than any new
owner or other entity which is an Affiliate of Lessor) (provided that LTC
Healthcare, Inc. and its subsidiaries and affiliates shall not be deemed an
Affiliate of Lessor) shall not be (a) liable for any act or omission of Lessor
under
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this Lease occurring prior to such sale or conveyance, or (b) subject to any
offset, abatement or reduction of rent because of any default of Lessor under
this Lease occurring prior to such sale or conveyance.
32.3 LESSEE'S RIGHT TO CURE. Subject to the provisions of
Paragraph 32.4, if Lessor breaches any covenant to be performed by it under this
Lease, Lessee, after Notice to and demand upon Lessor, without waiving or
releasing any obligation hereunder, and in addition to any other remedies
available to Lessee, may (but shall be under no obligation at any time
thereafter to) make such payment or perform such act for the account and at the
expense of Lessor. All sums so paid by Lessee and all costs and expenses
(including, without limitation, reasonable attorneys' fees) so incurred,
together with interest thereon from the date on which such sums or expenses are
paid or incurred by Lessee, shall be paid by Lessor to Lessee on demand, but may
not be offset by Lessee against payments of Rent hereunder.
32.4 BREACH BY LESSOR. It shall be a breach of this Lease if
Lessor fails to observe or perform any term, covenant or condition of this Lease
on its part to be performed, and such failure shall continue for a period of
thirty (30) days after Notice thereof from Lessee unless such failure cannot
with due diligence be cured within a period of thirty (30) days, in which case
such failure shall not be deemed to continue if Lessor, within said thirty (30)
day period, proceeds promptly, continuously and with due diligence to cure the
failure and diligently completes the curing thereof. The time within which
Lessor shall be obligated to cure any such failure shall also be subject to
extension of time due to the occurrence of any Unavoidable Delay."
2. EVENT OF DEFAULT; CHANGE IN CONTROL. The Leases are hereby
amended by adding the following subparagraph (m) in Paragraph 16.1 as an "Event
of Default" under each of the Leases:
"(m) any Change in Control (as defined below) of Lessee
following the Commencement Date of this Lease. As used in this Paragraph
16.1(m), the term "Change of Control" shall mean any change (voluntary or
involuntary, by operation of law or otherwise) in the Person or Persons (as
defined below) which ultimately exert effective control over the management of
the affairs of Lessee (a "Controlling Entity") as of the date hereof. A Change
of Control shall specifically include, but not be limited to, any of the
occurrences described in subparagraphs (i) through (iii) below in this Paragraph
16.1(m).
Notwithstanding anything to the contrary set forth in this
Paragraph 16.1(m), any Change of Control which either (a) has been previously
agreed to in writing by Lessor, or (b) constitutes a Permitted Transaction (as
defined below), shall not constitute an Event of Default under this Lease. For
the purpose of this
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Paragraph 16.1(m), the term "Permitted Transaction" shall mean any transaction,
whether by operation of law or otherwise, resulting in a Change in Control in
which, immediately following such Change in Control, the Person or Persons which
ultimately exert effective control over the management of the affairs of Lessee
and/or Lessee's Controlling Entity (such Person or Persons, the "Successor
Person") meet both of the following tests: (A) such Successor Person or Persons
has or have an audited consolidated tangible net worth, determined in accordance
with generally accepted accounting principles consistently applied ("GAAP"),
equal to or greater than One Hundred Fifty Million and No/100 Dollars
($150,000,000.00), and (B) such Successor Person or Persons then has or have
issued and outstanding securities which are publicly traded on the New York
Stock Exchange ("NYSE"), the American Stock Exchange ("AMEX"), or the
NASDAQ-National Markets System ("NASDAQ"). From and after the occurrence of a
Permitted Transaction, the failure by the Successor Person or Persons to (AA)
maintain an audited consolidated tangible net worth, determined in accordance
with GAAP, equal to or greater than One Hundred Fifty Million and No/100 Dollars
($150,000,000.00), and (BB) continue to have issued and outstanding securities
which are publicly traded on the NYSE, the AMEX, or the NASDAQ, shall constitute
an Event of Default.
For purposes of this Paragraph 16.1(m), a Change of Control shall
include, but not be limited to, any of the following occurrences:
(i) any Person (defined below) is or becomes the
Beneficial Owner (defined below), directly or indirectly, of securities of
Lessee and/or Lessee's Controlling Entity, whether by operation of law or
otherwise, representing thirty percent (30%) or more of the combined voting
power of the then outstanding securities of Lessee and/or its Controlling Entity
(whereupon such Person shall be deemed a Successor Person hereunder); or
(ii) the stockholders of Lessee or its Controlling
Entity approve a merger or consolidation of Lessee or its Controlling Entity (as
applicable) with any other corporation (or other entity), other than a merger or
consolidation which would result in the voting securities of Lessee or its
Controlling Entity (as applicable) which are outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more than fifty
percent (50%) of the combined voting power of the voting securities of Lessee or
its Controlling Entity or such surviving entity immediately after such merger or
consolidation; provided, however, that a merger or consolidation effected to
implement a recapitalization of Lessee or its Controlling Entity (or similar
transaction) in which no Person acquires more than thirty percent (30%) of the
combined voting power of the then outstanding securities of Lessee and/or its
Controlling Entity shall not constitute a Change in Control; or
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(iii) the stockholders of Lessee or its Controlling
Entity approve a plan of complete liquidation of Lessee or its Controlling
Entity (as applicable) or an agreement for the sale or disposition by Lessee or
its Controlling Entity of all or substantially all of the assets of Lessee or
its Controlling Entity.
For purposes of this Paragraph 16.1(m), the term "Person"
shall have the meaning ascribed thereto in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the term
"Beneficial Owner" shall have the meaning ascribed thereto in Rule 13d-3 of the
Exchange Act."
3. FURTHER ASSURANCES. Lessee agrees to execute and deliver such
other instruments as may be requested by Lessor from time to time to effect and
confirm the transactions described herein and contemplated hereby, including
without limitation, individual amendments to each of the individual Leases.
4. MISCELLANEOUS. The Leases, each as amended by this Amendment,
shall otherwise remain unchanged and in full force and effect. This Amendment
may be executed in one or more counterparts, which shall together constitute one
and the same instrument. Facsimile signatures shall have the same binding effect
as originals.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first above written.
"LESSOR" LTC PROPERTIES, INC.,
a Maryland corporation
By: /s/ Pamela Privett
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Its: Senior VP and General Counsel
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TEXAS-LTC LIMITED PARTNERSHIP,
a Texas limited partnership
By: L-Tex GP, Inc.,
a Delaware corporation,
Its General Partner
By: /s/ Pamela Privett
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Its: Senior VP and General Counsel
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KANSAS-LTC CORPORATION,
a Delaware corporation (formerly known as
Coronado Corporation)
By: /s/ Pamela Privett
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Its: Senior VP and General Counsel
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[signatures continued on next page]
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[signatures continued from previous page]
"LESSEE" ALTERNATIVE LIVING SERVICES, INC.,
A DELAWARE CORPORATION
By: /s/ Mark W. Ohlendorf
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Its: Senior Vice President
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STERLING HOUSE CORPORATION,
A KANSAS CORPORATION
By: /s/ Mark W. Ohlendorf
-------------------------
Its: Vice President
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EXHIBIT "A"
SCHEDULE OF LEASES
1. ARVADA, COLORADO. That certain Lease dated as of August 15, 1997, between
LTC Properties, Inc., a Maryland corporation (hereinafter "LTC"), as lessor, and
Sterling House Corporation, a Kansas corporation (hereinafter "SHC"), as lessee,
demising certain real property improved with an assisted living facility
commonly known as Sterling House of Arvada and located in the City of Arvada,
State of Colorado, and as assigned from SHC to Alternative Living Services,
Inc., a Delaware corporation ("ALS") pursuant to that certain Assignment and
Assumption of Lease dated July 21, 1998.
2. GREELEY, COLORADO. That certain Lease dated as of July 31, 1997, as amended
by that certain Amendment to Lease dated May 1, 1998, between LTC, as lessor,
and SHC, as lessee, demising certain real property improved with an assisted
living facility commonly known as Sterling House of Greeley and located in the
City of Greeley, State of Colorado, and as assigned from SHC to ALS pursuant to
that certain Assignment and Assumption of Lease dated July 21, 1998.
3. LONGMONT, COLORADO. That certain Lease dated as of April 3, 1998, as
amended by that certain Amendment to Lease dated April 30, 1998, between LTC, as
lessor, and SHC, as lessee, demising certain real property improved with an
assisted living facility commonly known as Sterling House of Longmont and
located in the City of Longmont, State of Colorado, and as assigned from SHC to
ALS pursuant to that certain Assignment and Assumption of Lease dated July 21,
1998.
4. LOVELAND, COLORADO. That certain Lease dated as of September 5, 1997, as
amended by that certain Amendment to Lease dated May 1, 1998, between LTC, as
lessor, and SHC, as lessee, demising certain real property improved with an
assisted living facility commonly known as Sterling House of Loveland and
located in the City of Loveland, State of Colorado, and as assigned from SHC to
ALS pursuant to that certain Assignment and Assumption of Lease dated July 21,
1998.
5. BLUEWATER BAY, FLORIDA. That certain Lease dated as of June 2, 1998,
between LTC, as lessor, and SHC, as lessee, demising certain real property
improved with an assisted living facility commonly known as Sterling House of
Bluewater Bay and located in the City of Bluewater Bay, State of Florida.
6. FORT MYERS, FLORIDA. That certain Lease dated as of March 30, 1998, as
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amended by that certain Amendment to Lease dated April 30, 1998, between LTC, as
lessor, and SHC, as lessee, demising certain real property improved with an
assisted living facility commonly known as Sterling House of Fort Myers and
located in the City of Fort Myers, State of Florida.
7. SPRING HILL, FLORIDA. That certain Lease dated as of June 12, 1998, between
LTC, as lessor, and SHC, as lessee, demising certain real property improved with
an assisted living facility commonly known as Sterling House of Spring Hill and
located in the City of Spring Hill, State of Florida.
8. TALLAHASSEE, FLORIDA. That certain Lease dated as of April 23, 1998,
between LTC, as lessor, and SHC, as lessee, demising certain real property
improved with an assisted living facility commonly known as Sterling House of
Tallahassee and located in the City of Tallahassee, State of Florida.
9. DODGE CITY, KANSAS. That certain Lease dated as of December 22, 1995, as
amended by that certain Amendment to Lease dated June 25, 1996, between
Kansas-LTC Corporation, a Delaware corporation (formerly known as Coronado
Corporation) (hereinafter "Kansas-LTC") as lessor, and SHC, as lessee, demising
certain real property improved with an assisted living facility commonly known
as Sterling House of Dodge City and located in the City of Dodge City, State of
Kansas.
10. GREAT BEND, KANSAS. That certain Lease dated as of December 22, 1995, and
amended by that certain Amendment to Lease dated June 25, 1996, between
Kansas-LTC, as lessor, and SHC, as lessee, demising certain real property
improved with an assisted living facility commonly known as Sterling House of
Great Bend and located in the City of Great Bend, State of Kansas.
11. MCPHERSON, KANSAS. That certain Lease dated as of December 22, 1995, as
amended by that certain Amendment to Lease dated June 25, 1996, between
Kansas-LTC, as lessor, and SHC, as lessee, demising certain real property
improved with an assisted living facility commonly known as Sterling House of
McPherson and located in the City of McPherson, State of Kansas.
12. SALINA, KANSAS. That certain Lease dated as of December 22, 1995, as
amended by that certain Amendment to Lease dated June 25, 1996, between
Kansas-LTC, as lessor, and SHC, as lessee, demising certain real property
improved with an assisted living facility commonly known as Sterling House of
Salina and located in the City of Salina, State of Kansas.
13. GREENVILLE, NORTH CAROLINA. That certain Lease dated as of June 2, 1998,
between LTC, as lessor, and SHC, as lessee, demising certain real property
improved with an assisted living facility commonly known as Sterling
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House of Greenville and located in the City of Greenville, State of North
Carolina.
14. ROCKY MOUNT, NORTH CAROLINA. That certain Lease dated as of July 17, 1998,
between LTC, as lessor, and SHC, as lessee, demising certain real property
improved with an assisted living facility commonly known as Sterling House of
Rocky Mount and located in the City of Rocky Mount, State of North Carolina.
15. SHELBY, NORTH CAROLINA. That certain Lease dated as of April 23, 1998,
between LTC, as lessor, and SHC, as lessee, demising certain real property
improved with an assisted living facility commonly known as Sterling House of
Shelby and located in the City of Shelby, State of North Carolina.
16. SPRINGFIELD, OHIO. That certain Lease dated as of August 8, 1997, as amended
by that certain Amendment to Lease dated May 1, 1998, between LTC, as lessor,
and SHC, as lessee, demising certain real property improved with an assisted
living facility commonly known as Sterling House of Springdale and located in
the City of Springfield, State of Ohio.
17. ADA, OKLAHOMA. That certain Lease dated as of December 27, 1996, between
LTC, as lessor, and SHC, as lessee, demising certain real property improved with
an assisted living facility commonly known as Sterling House of Ada and located
in the City of Ada, State of Oklahoma.
18. DURANT, OKLAHOMA. That certain Lease dated as of April 21, 1997, as amended
by that certain Amendment to Lease" dated February 27, 1998, between LTC, as
lessor, and SHC, as lessee, demising certain real property improved with an
assisted living facility commonly known as Sterling House of Durant and located
in the City of Durant, State of Oklahoma.
19. EDMOND, OKLAHOMA. That certain Lease dated as of August 29, 1997, between
LTC, as lessor, and SHC, as lessee, demising certain real property improved with
an assisted living facility commonly known as Sterling House of Santa Fe Square
and located in the City of Edmond, State of Oklahoma.
20. TULSA, OKLAHOMA (MINGO ROAD). That certain Lease dated as of February 28,
1996, between LTC, as lessor, and SHC, as lessee, demising certain real property
improved with an assisted living facility commonly known as Sterling House of
Tulsa-Mingo and located in the City of Tulsa, State of Oklahoma.
21. TULSA, OKLAHOMA. That certain Lease dated as of June 13, 1997, as amended by
that certain Amendment to Lease dated May 1, 1998, between LTC, as lessor, and
SHC, as lessee, demising certain real property improved
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with an assisted living facility commonly known as Sterling House of Tulsa and
located in the City of Tulsa, State of Oklahoma.
22. WEATHERFORD, OKLAHOMA. That certain Lease dated as of August 29, 1997,
between LTC, as lessor, and SHC, as lessee, demising certain real property
improved with an assisted living facility commonly known as Sterling House of
Legacy Square and located in the City of Weatherford, State of Oklahoma.
23. SUMTER, SOUTH CAROLINA. That certain Lease dated as of July 16, 1998,
between LTC, as lessor, and SHC, as lessee, demising certain real property
improved with an assisted living facility commonly known as Sterling House of
Sumter and located in the City of Sumter, State of South Carolina.
24. SAN ANTONIO, TEXAS (MALTSBERGER). That certain Lease dated as of June 13,
1997, as amended by that certain Amendment to Lease dated May 1, 1998, between
Texas-LTC Limited Partnership, a Texas Limited Partnership (hereinafter
"Texas-LTC"), as lessor, and SHC, as lessee, demising certain real property
improved with an assisted living facility commonly known as Sterling House of
San Antonio Maltsberger and located in the City of San Antonio, State of Texas.
25. SAN ANTONIO, TEXAS. That certain Lease dated as of May 1, 1997, between
Texas-LTC, as lessor, and SHC, as lessee, demising certain real property
improved with an assisted living facility commonly known as Sterling House of
San Antonio and located in the City of San Antonio, State of Texas.
26. TYLER, TEXAS. That certain Lease dated as of December 27, 1996, between
Texas-LTC, as lessor, and SHC, as lessee, demising certain real property
improved with an assisted living facility commonly known as Sterling House of
Tyler and located in the City of Tyler, State of Texas.
27. WACO, TEXAS. That certain Lease dated as of June 13, 1997, and amended by
that certain amendment entitled "Amendment to Lease" dated May 1, 1998, between
Texas-LTC, as lessor, and SHC, as lessee, demising certain real property
improved with an assisted living facility commonly known as Sterling House of
Waco and located in the City of Waco, State of Texas.
28. WATAUGA, TEXAS. That certain Lease dated as of August 29, 1997, between
Texas-LTC, as lessor, and SHC, as lessee, demising certain real property
improved with an assisted living facility commonly known as Savannah Square
Watauga and located in the City of Watauga, State of Texas.
29. WICHITA FALLS, TEXAS. That certain Lease dated as of December 27,
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1996, between Texas-LTC, as lessor, and SHC, as lessee, demising certain real
property improved with an assisted living facility commonly known as Sterling
House of Wichita Falls and located in the City of Wichita Falls, State of Texas.
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