SECOND AMENDMENT TO PUT AND PURCHASE AGREEMENT
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(AL I - Emeritrust 25 Facilities)
This Second Amendment to Put and Purchase Agreement (this "Amendment") is
made this 22 day of March, 2001 by and between Daniel R. Baty, individually and
on behalf of his marital community ("Obligor") and AL Investors LLC, a Delaware
limited liability company ("AL Investors"), for itself and as sole managing
member of each of the Facility Entities, or in cases where the Facility Entity
is a limited partnership, as sole managing member on behalf of the general
partner thereof, set forth on Exhibit A to the Put and Purchase Agreement (as
hereinafter defined).
Recitals
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A. Obligor and AL Investors entered into that certain 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 "Put Agreement"),
pursuant to which, among other things, Al Investors has an option to require
Obligor to purchase certain Facilities upon the occurrence of a Triggering
Event, as defined therein.
B. In connection with the transaction described in the Put Agreement,
AL Investors and/or its affiliates entered into that certain Management
Agreement with Option to Purchase (Emeritrust 25) dated December 30, 1998, as
amended on or about the date hereof by First Amendment to Management Agreement
with Option to Purchase (the "Management Agreement').
C. The Senior Loan (as defined in the Put Agreement) is being
restructured by, among other things, dividing the Senior Loan into three
tranches, collateralizing a portion of the tranche know as "Tranche B" with
certain property owned by subsidiaries of AL Investors II LLC, a Delaware
limited liability company and an affiliate of AL Investors (the "AL II
Additional Collateral Properties"), amending the interest rate, and obtaining
two 9-month conditional options to extend the term of the Senior Loan, all as
more particularly set forth in the amendments to the Senior Loan documents dated
on or about the date hereof (collectively, "the Senior Loan Restructure").
D. As part of the Senior Loan Restructure and pursuant to Section 5 of
the Promissory Note (Tranche C) executed in connection with the Senior Loan
Restructure on or about the date hereof (the "Tranche C Note"), AL Investors has
agreed to make certain principal payments to reduce the principal balance of
Tranche C of the Senior Loan (the "Additional Principal Payments"). Pursuant to
an amendment to the operating agreement of AL Investors, Daniel R. Baty has
agreed to contribute the Additional Principal Payments to AL Investors in
accordance with the terms and conditions contained therein.
E. In connection with the Senior Loan Restructure and to take into
account the Additional Principal Payments, 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:
Defined Terms. 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 has not exercised its
Purchase Option on or prior to the Purchase Option Expiration Date (as defined
in the Management Agreement)". Section 3.1(c) is hereby amended by adding at
the end thereof the following: "or AL Investors has elected to terminate the
Management Agreement pursuant to a right to do so".
In addition, the definition of "Management Agreements" in the last
full paragraph of Section 3.1 is modified to include the TIAA Management
Agreement and any and all amendments to such Management Agrees referenced in
such definition, including any amendments executed in connection with the Senior
Loan Restructure.
1. Time of Exercise. The clause "one hundred eighty (180) days prior to the
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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: "the applicable Purchase Option Expiration Date (as defined in
the Management Agreement)".
Obligor's Default. Section 3.10 is hereby amended by adding the following:
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"Notwithstanding the foregoing, nothing contained herein shall prevent AL
Investors from exercising any rights or remedies it may have pursuant to any
other agreement, including, without limitation, that certain Pledge Agreement
from Obligor and B.F. Limited Partnership dated on or about the date hereof.
Put Facilities. The parties acknowledge that AL II Holdings LLC, a
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Delaware limited liability company, and Obligor have agreed in connection with
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that certain Second Amendment to Put and Purchase Agreement (AL II Holdings - 14
Operating Facilities and 5 Development Facilities), dated on or about the date
hereof (the "AL II Amendment"), that under certain circumstances all or a
portion of AL II Holding's put rights thereunder may be transferred to AL
Investors to be exercised under the Put Agreement, and agree that upon such
occurrence that the number of Facilities which AL Investors may require Obligor
to purchase hereunder shall be increased by the decrease in the number of
Facilities which Obligor is required to purchase under the AL II Amendment.
Purchase Price. The last paragraph of Exhibit C is hereby deleted and
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replaced in its entirety with the following:
The "Purchase Price" for a Put Facility shall equal:
(i) the amount, determined as of the Put Purchase Date, that is required to
repay in full the Senior Loan allocated to such Facility (including all
prepayment penalties and other charges incurred on such repayment); plus
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(ii) the Investment Account of such Facility, but disregarding the
Additional Principal Payments and proceeds of any AL II Additional Collateral
Properties which are applied to that portion of the Senior Loan allocated to
such Put Facility, as defined in the First Amendment to Management Agreement ;
plus
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(iii) the Investment Return accrued on the Investment Account for such
Facility for the current year through the Put Purchase Date; plus
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(iv) an amount equal to two percent (2%) of the Initial Investment Account
for such Facility; plus
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(v) any proceeds previously applied to the Senior Loan on such Put Facility
from the sale of the AL II Additional Collateral Properties in accordance with
the terms of the Senior Loan Restructure; plus
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(vi) the Additional Principal Payments previously applied to the Senior Loan
on such Put Facility, together with interest thereon at Libor plus 4.5%,
calculated and adjusted in the same manner as the Tranche C Note; less
(vii) the Cash Account balance for such Facility.
The Purchase Price for all Put Facilities shall equal the sum of the
Purchase Prices for each Put Facility calculated as set forth above.
Payment of Purchase Price. Section 3.6 is hereby amended by adding the
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following: "Notwithstanding the foregoing, Obligor shall be entitled to pay a
portion of the Purchase Price for the Put Facilities by surrendering and
assigning to AL Investors his membership interest in Al Investors, in which
event Obligor shall be entitled to a credit against the Purchase Price for the
Put Facilities in an amount equal to the aggregate amount of the Additional
Principal Payments made by Obligor to AL Investors, together with interest
thereon at Libor plus 4.5%, calculated and adjusted in the same manner as the
Tranche C Note. Nothing contained herein shall permit Obligor to credit the
Additional Principal Payments against the Deposit required pursuant to Section
3.5 hereof.
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).
Notices. All notices to be given by either party to this Agreement 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 Agreement, 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 Agreement.
Applicable Law. This Agreement 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 Agreement
as of the date and year first above written.
AL INVESTORS
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AL INVESTORS LLC, a Delaware limited liability company, for itself and as sole
managing member on behalf of each of the Owners, or in the case where the Owner
is a limited partnership, as sole managing member on behalf of the general
partner thereof
By: /s/ Norman L. Brendan
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Name Norman L. Brendan
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Title Manager
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OBLIGOR
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/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 Amendment.
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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