THIRD 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 Third Amendment to Put and Purchase Agreement (this "Amendment") is
made this 1st day of January, 2002 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,
and as amended by Second Amendment to Put and Purchase Agreement, dated March
22, 2001 (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 (i) that certain Management
Agreement with Option to Purchase (AL II - 14 Operating Facilities), dated March
26, 1999, as amended by First Amendment dated March 27, 2000, as amended by
Second Amendment dated March 22, 2001, and as amended by Third Amendment
effective January 1, 2002 (as amended, 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"), and (iii) that certain Management Agreement with Option to Purchase
(Teachers), dated March 27, 2000 (the "AL II Management Agreement
(Teachers);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, as amended by First Amendment dated March 22, 2001, and as
amended by Second Amendment effective January 1, 2002, 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, by Second
Amendment dated March 22, 2001, and by Third Amendment effective as of January
1, 2001 (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. AL Investors may elect to refinance one or more of the Facilities
with lenders originating loans insured by the Federal Housing Administration, an
organizational unit of the United States Department of Housing and Urban
Development, or other similar lenders, which may be locked to repayment at the
time the Put Notice is given or Obligor's Option is exercised (each a "New
Loan").
F. In connection with extension of the AL I Senior Loan and the Senior
Loan as defined in the Put Agreement, and in anticipation of one or more New
Loans, 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) (as previously replaced under paragraph
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2 of the Second Amendment) is hereby deleted in its entirety and 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 at least 15
days prior to the expiration or sooner termination of the Extension Period (as
defined in the AL I Management Agreement), or does not close its Purchase
Options under all three of the AL II Management Agreements on or before the
maturity date of the Senior Loan, 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. The sentence added at the end of section 3.1 pursuant
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to paragraph 3 of the Second Amendment is hereby deleted and replaced with the
following: 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
Extension Period.
Time of Exercise. Subject to the provisions of Paragraph 3 above, the
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clause "December 31, 2001, subject to such extension for closing as may be
granted in the AL II Management Agreements" (as added pursuant to paragraph 4 of
the Second Amendment) is hereby deleted and replaced in its entirety with the
following: "the end of the Extension Period, subject to any extension for
closing as may be granted in the AL II Management Agreements".
Exercise of Put. The second and third sentences of the last paragraph of
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Section 3.1 of the Put Agreement is hereby deleted in its entirety and replaced
with the following: "Upon the occurrence of any one or more of the Triggering
Events, AL II Holdings may require Obligor to purchase a total of ten (10)
Facilities with respect to Triggering Events (a), (b), (c) and (d), and twelve
(12) Facilities with respect to Triggering Event (e), all on the terms and
conditions of this Agreement and subject to the provisions of paragraph 6 of the
Third Amendment permitting the transfer of certain put rights to and from
the AL I Put Agreement. The designation of which 10 or 12 Facilities (as
applicable, in the aggregate under both this Put Agreement and the AL I Put
Agreement) Obligor shall be obligated to purchase shall be in AL Holding's sole,
absolute and unfettered discretion.
Selection of Facilities. Paragraph 5 of the Second Amendment is hereby
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deleted and replaced in its entirety with the following: 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, it being
the intention of the parties that the total number of facilities that Obligor
may be required to purchase under this Put Agreement and the AL I Put Agreement
shall not exceed 10 in the aggregate with respect to Triggering Events (a), (b),
(c) and (d), or 12 in the aggregate with respect to Triggering Event (e).
Conveyances Subject to New Loan. It is expressly understood and agreed
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that Obligor taking title to a Facility pursuant to a Put Notice or Obligor's
Option shall be required to assume any New Loan not then subject to prepayment,
and shall pay all costs and fees associated with such loan assumption. In
addition, it shall be Obligor's responsibility to cause all conditions and
requirements relating to the assumption of the New Loan to be satisfied in full
as of Closing. Obligor shall receive a credit against the purchase price for
the purchased Facilities for the assumed balance and any accrued interest due on
any assumed New Loan.
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.
12. Counterparts. This Amendment may be signed in counterparts, each
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of which when taken together shall constitute an original document.
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
The undersigned lender in connection with the Junior Loan has executed this
Agreement for the sole purpose of consenting to the foregoing Third Amendment to
Put and Purchase Agreement (AL II Holdings- 14 Operating Facilities and 5
Development Facilities.
Senior Housing Partners I, L.P.,
a Delaware limited partnership
By: /s/ Noah R. Levy
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Name Noah R. Levy
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Title Vice President
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