SECOND AMENDMENT TO
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PUT AND PURCHASE AGREEMENT
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(AL II Holdings - 14 Operating Facilities
and 5 Development Facilities)
This Second Amendment to Put and Purchase Agreement (this "Amendment") is
made this 22 day of March, 2001 by and among Daniel R. Baty, individually and on
behalf of his marital community ("Obligor"), AL II Holdings LLC, a Delaware
limited liability company ("AL II Holdings"), AL Investors II LLC, a Delaware
limited liability company ("AL Investors II"), AL Investors Development LLC, a
Delaware limited liability company ("AL Development"), and each of the Facility
Entities which own a Facility. AL Investors II is executing this Amendment for
itself and as the sole managing member on behalf of each of the Facility
Entities which own an Operating Facility or a Refinanced Facility (or in cases
where such Facility Entity is a limited partnership, as sole managing member on
behalf of the general partner thereof) and AL Investors Development is executing
this Amendment for itself and as the sole managing member on behalf of five (5)
of the Facility Entities which own a Development Facility, all as set forth on
and identified on Exhibit A to the Put and Purchase Agreement (as hereinafter
defined).
Recitals
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A. Obligor, AL II Holdings, AL Investors II, and AL Development entered
into that certain Put and Purchase Agreement (AL II Holdings - 14 Operating
Facilities and 5 Development Facilities), dated as of March 26, 1999, as amended
by First Amendment to Put and Purchase Agreement, dated as of March 27, 2000 (as
amended, the "Put Agreement").
B. In connection with the transaction described in the Put Agreement,
AL Investors II and /or its affiliates entered into that (i) that certain
Management Agreement with Option to Purchase (AL II - 14 Operating Facilities),
dated March 26, 1999 (the "AL II Management Agreement"), and (ii) that certain
Management Agreement with Option to Purchase (AL II - 5 Development Facilities),
dated March 26, 1999 (the "AL II Development Management Agreement"). The AL II
Management Agreement was subsequently segregated in connection with the
refinancing of four of the Facilities pursuant to a loan from Teachers Insurance
and Annuity Association of America pursuant to that certain Amendment to
Management Agreement dated March 27, 2000 and the execution of the Management
Agreement with Option to Purchase (Teachers) (the "Management Agreement
(Teachers)", dated March 27, 2000 (collectively with the AL II Management
Agreement and the AL II Development Management Agreement , the "AL II Management
Agreements").
C. The parties hereto or certain affiliates thereof also entered into
that certain Management Agreement with Option to Purchase (Emeritrust 25), dated
December 30, 1998, pursuant to which, among other things, AL Investors LLC, a
Delaware limited liability company, and the Facility Entities defined therein
engaged Manager to manage certain Facilities described therein (as amended, the
"AL I Management Agreement"), as well as that certain related Put and Purchase
Agreement dated December 30, 1998, as amended by First Amendment to Put and
Purchase Agreement dated March 26, 1999 (as amended, the "AL I Put Agreement"),
D. GMAC Commercial Mortgage Corporation ("GMAC") is the lender under
the Senior Loan under both the AL I Management Agreement and the AL II
Management Agreements. The Senior Loan as defined in the AL I Management
Agreement is referred to herein as the "AL I Senior Loan".
E. The parties to the AL I Management Agreement have agreed that it
would be beneficial to restructure the AL I Senior Loan by, among other things,
dividing the loan into three tranches, collateralizing a portion of the tranche
known as "Tranche B" with certain property owned by subsidiaries of AL Investors
II (the "AL II Collateral Properties"), amending the interest rate, and
obtaining two 9-month conditional options to extend the term of the loan (the
"AL I Loan Restructure"). The AL I Loan Restructure is evidenced by, inter
alia, that certain First Amendment to Loan Agreement by and between GMAC
Commercial Mortgage Corporation and AL Investors I, dated on or about the date
hereof (the "GMAC Amendment").
F. As a condition to the AL I Loan Restructure, the parties now desire
to amend the Put Agreement on the terms and conditions contained herein.
NOW, THEREFORE, in consideration of Ten and No/100 Dollars, the agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
Definitions. All terms capitalized herein but not defined shall have the
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meanings given them in the Put Agreement.
Triggering Events. Section 3.1(a) is hereby deleted in its entirety and
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replaced with the following: "(a) If Emeritus does not give notice of its
exercise of its Purchase Options under all three of the AL II Management
Agreements on or before December 12, 2001, or does not close its Purchase
Options under all three of the AL II Management Agreements on or before December
31, 2001, subject to such extension for closing as may be granted in the AL
II Management Agreements". Section 3.1(c) is hereby amended by adding at the
end thereof the following: "or AL Investors II has elected to terminate the AL
II Management Agreement or the Management Agreement (Teachers), or AL Investors
Development has elected to terminate the Development Management Agreement,
pursuant to a right to do so".
Exercise of Option. A sentence is added at the end of section 3.1 as
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follows: Notwithstanding the 6th sentence of the last full paragraph in this
Section 3.1, AL II Holdings may give the Put Notice to Obligor at any time after
the Triggering Event but in any event within 60 days after the expiration of the
Initial Term of the Management Agreement; provided, however, that if the AL II
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Collateral Properties have not been released as additional security for the AL I
Senior Loan as of the occurrence of a Triggering Event under this Agreement,
then AL II Holdings shall have the right to defer delivery of the Put Notice and
exercise of its rights under the Put Agreement to any time until 60 days after
the earlier to occur of (i) a Triggering Event under the AL I Put Agreement, or
(ii) 60 days after the AL II Collateral Properties have been released as
additional security for the AL I Senior Loan (the "Deferred Exercise Date")
Time of Exercise. Subject to the provisions of Paragraph 3 above, the
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clause "one hundred eighty (180) days prior to the expiration of the Initial
Term of the Management Agreement" in the last full paragraph of Section 3.1
shall be deleted and replaced in its entirety with the following: "December 31,
2001, subject to such extension for closing as may be granted in the AL II
Management Agreements".
Selection of Facilities. If and only if (a) the AL II Collateral
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Properties have not been released as additional security for the AL I Senior
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Loan and (b) a Triggering Event has occurred under and as defined in the AL I
Put Agreement or a Triggering Event has occurred under and as defined in the Put
Agreement, then AL II Holdings shall have the right to transfer any or all of
its put rights to AL Investors for exercise in accordance with the AL I Put
Agreement by electing to decrease the number of Put Facilities to be selected by
AL II Holdings under the Put Agreement and to simultaneously and by like amount
increase the number of Put Facilities to be selected by AL Investors under the
AL I Put Agreement.
Obligor's Option. Section 3.2 is hereby amended to change both references
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to "twenty (20)" days therein to "ten (10)" days, and to change all reference to
"sixty (60)" days therein to "thirty (30)" days, such that Obligor shall be
permitted to exercise Obligor's Option by written notice and deposit given to AL
II Holdings not later than ten (10) days after receipt of the Put Notice
pursuant to Section 3.1(a) or 3.1(b), and not later than thirty (30) days after
receipt of the Put Notice pursuant to Section 3.1(c), 3.1(d) or 3.1(e).
Conforming Definitions. Exhibit A is hereby amended as follows:
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6.1 Junior Loan. The definition of Junior Loan is hereby deleted and
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replaced in its entirety with the following: any indebtedness incurred by
Owners which is secured by a mortgage, pledge, and related security instruments
against, among other things, the membership interests of AL II Holdings in AL
Investors Development and AL Investors II and/or the membership interests of AL
Investors II and AL Investors Development in the Facility Entities. Initially,
the Junior Loan is evidenced by that certain Loan Agreement among AL II
Holdings, AL Investors II, AL Investors Development and the Facility Entities
and Senior Housing Partners I, L.P. dated on or about the date hereof, as
subsequently amended ("Initial Junior Loan").
6.2 Put and Purchase Agreement The definition of Put and Purchase
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Agreement is hereby deleted and replaced in its entirety with the following:
that certain Put and Purchase Agreement dated March 26, 1999, as amended by
First Amendment to Put and Purchase Agreement dated March 27, 2000, and as
subsequently amended.
Notices. All notices to be given by either party to this Amendment to the
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other party hereto shall be in writing, and shall be sent to the parties at the
addresses and in the manner set forth in the Put Agreement.
Ratification. The Put Agreement, as amended by this Amendment, is hereby
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ratified and confirmed.
Headings. The headings contained herein are for convenience of reference
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only and are not intended to define, limit or describe the scope or intent of
any provision of this Amendment.
Applicable Law. This Amendment shall be construed and interpreted and be
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governed by the laws of the State of Washington.
IN WITNESS WHEREOF, the parties have executed and delivered this Amendment
as of the date and year first above written.
OWNER: AL II HOLDINGS LLC, a Delaware limited liability company for itself
and as sole managing member on behalf of each of AL Investors II LLC and AL
Investors Development LLC
By /s/ Norman L. Brendan
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Norman L. Brendan
Managing Manager
AL INVESTORS DEVELOPMENT LLC, a Delaware limited liability company, for
itself and as sole managing member on behalf of each of the Facility Entities
which owns a Development Facility
By /s/ Norman L. Brendan
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Norman L. Brendan
Managing Manager
AL INVESTORS II LLC, a Delaware limited liability company, for itself and
as sole managing member on behalf of each of the Facility Entities which owns an
Operating Facility other than a Refinanced Facility (or in cases where such
Facility Entity is a limited partnership, as sole managing member on behalf of
the general partner of such Facility Entity)
By /s/ Norman L. Brendan
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Norman L. Brendan
Managing Manager
Each of the Facility Entities which owns a Refinanced Facility
By: /s/ Norman L. Brendan
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Norman L. Brendan
Managing Manager
OBLIGOR:
/s/ Daniel R. Baty
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Daniel R. Baty, individually and on behalf of his marital community