UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 20, 2013
CNL Healthcare Properties, Inc.
(Exact name of registrant as specified in its charter)
Maryland | 000-54685 | 27-2876363 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification no.) |
450 South Orange Ave.
Orlando, Florida 32801
(Address of principal executive offices)
Registrants telephone number, including area code: (407) 650-1000
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4 (c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01 Entry Into a Material Definitive Agreement
Advisory Agreement
On March 20, 2013, the Board of Directors (the Board) of CNL Healthcare Properties, Inc. (we, us, our, the Company) approved the Second Amendment to the Advisory Agreement dated March 20, 2013 (the Advisory Agreement) among, the Company, CHP Partners, LP, the Companys operating partnership (the Operating Partnership) and CNL Healthcare Corp., the Companys advisor (the Advisor).
Pursuant to the Advisory Agreement, the Board has delegated to the Advisor the authority to make partial conveyances of real estate associated with any of the Companys real property to third parties for a purchase price equal to or less than $1 million without the prior approval of the Board.
The Advisory Agreement also provides that fees to the Advisor shall be calculated on a monthly average of the Companys daily asset value in any given month, rather than at the end of the month.
The Advisory Agreement also adds a non-solicitation provision pursuant to which during the term of the Advisory Agreement and for one year following its termination, neither the Company nor the Operating Partnership shall, without the Advisors prior written consent, directly or indirectly, (a) solicit or encourage any person to leave the employment or other service of the Advisor, or (b) hire, on behalf of the Company, the Operating Partnership or any other person or entity, any person who has left the employment within the one-year period following the termination of that persons employment with respect to the Advisor. From March 20, 2013 through one year following the termination of the Advisory Agreement, neither the Company nor the Operating Partnership will intentionally interfere with the relationship of the Advisor or endeavor to entice away from the Advisor any person who was a tenant, co-investor, co-developer, joint venturer or other customer of the Advisor during the term of the Advisory Agreement or during the preceding one-year period.
Expense Support and Restricted Stock Agreement
On March 20, 2013, the Board approved an Expense Support and Restricted Stock Agreement (the Expense Support Agreement) between the Company and the Advisor. Pursuant to the Expense Support Agreement, the Advisor has agreed to accept payment for services rendered for asset management fees, property management fees and specified expenses owed by the Company to the Advisor under the Advisory Agreement in the form of forfeitable restricted common stock of the Company (the Restricted Stock) in lieu of cash. The amount of such expense support will be to the positive excess of (a) aggregate stockholder cash distributions declared in the applicable quarter over (b) the Companys aggregate modified funds from operations (MFFO) for such quarter determined each calendar quarter on a non-cumulative basis (the Expense Support Amount). MFFO shall have the same meaning as set forth in the Companys Annual Report on Form 10-K for the fiscal year ended December 31, 2012 and subsequent Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K. The number of shares of Restricted Stock granted by the Company to the Advisor in lieu of the payment of fees in cash will be determined by dividing the Expense Support Amount for the preceding quarter by the then-current public offering per share of the Common Stock. The term of the Expense Support Agreement shall run from April 1, 2013 until December 31, 2013, subject to the right of the Advisor to terminate the Expense Support Agreement on 30 days prior written notice to the Company.
The Restricted Stock will vest immediately prior to or upon the occurrence of a liquidity event (as defined in the Companys prospectus and charter) that results in the Companys stockholders receiving or having received a certain level of distributions and return on investment (the Vesting Threshold).
In the event the Advisory Agreement is terminated without cause by the Company between April 1, 2013 and the occurrence of a liquidity event (the Restricted Period), the Restricted Stock will vest upon termination of the Advisory Agreement (the Termination Date) if the most recently reported estimated net asset value (NAV) per share of the Companys common stock plus total distributions received by stockholders prior to the Termination Date equals or exceeds the Vesting Threshold. The Restricted Stock shall be immediately and permanently forfeited if: (i) the Board of Directors has not conducted an evaluation of the Companys NAV as of the Termination Date, (ii) the Vesting Threshold is not met as of the Termination Date, (iii) the Company terminates the Advisory Agreement with cause; or (iv) the Advisor terminates the Advisory Agreement during the Restricted Period.
Service Agreement
On March 20, 2013, the Board approved an amendment to the Service Agreement between the Company and CNL Capital Markets Corp. (CCM), as amended January 1, 2012 (the Service Agreement) pursuant to which the Service Agreement, unless terminated, will renew for consecutive one year periods (each such renewal, a Renewal Term). The initial term of the Service Agreement was from June 8, 2011 until December 31, 2011, and the current Renewal Term expires December 31, 2013.
The Service Agreement may be terminated by either party giving the other party at least 120 days advance written notice of its intent to terminate or immediately upon written notice by the Company if CCM fails to perform material services under the Service Agreement which may result in a material adverse effect on the Companys business.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers, Compensatory Arrangement of Certain Officers
On March 20, 2013, the Board voted to reduce the number of directors that shall constitute the whole Board from six (6) to five (5) members effective June 27, 2013. It was determined that Dr. Bruce Douglas, an independent director and a member of the Board, will not stand for re-election effective June 27, 2013, the date of the annual shareholders meeting. Dr. Douglas has served as an independent director of the Company since October 2010. Dr. Douglas will continue to serve as an independent director of CNL Lifestyle Properties, Inc., a public, non-traded REIT and an affiliate of the Company.
Item 9.01 Financial Statements and Exhibits.
(d) | Exhibits |
10.1 | Second Amended and Restated Advisory Agreement by and among CNL Healthcare Properties, Inc., CHP Partners, LP and CNL Healthcare Corp. dated March 20, 2013. | |
10.2 | Expense Support and Conditional Reimbursement Agreement by and between CNL Healthcare Properties, Inc. and CNL Healthcare Corp. dated March 20, 2013. | |
10.3 | Second Addendum to Service Agreement by and between CNL Capital Markets Corp. and CNL Healthcare Properties, Inc. dated March 20, 2013. |
Caution Concerning Forward-Looking Statements
The information above contains forward-looking statements within the meaning of the Federal Private Securities Litigation Reform Act of 1995. The Company intends that such forward-looking statements be subject to the safe harbors created by Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are statements that do not relate strictly to historical or current facts, but reflect managements current understandings, intentions, beliefs, plans, expectations, assumptions and/or predictions regarding the future of the Companys business and its performance, the economy, and other future conditions and forecasts of future events, and circumstances. Forward-looking statements are typically identified by words such as believes, expects, anticipates, intends, estimates, plans, continues, pro forma, may, will, seeks, should and could, and words and terms of similar substance. Although we believe that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, our actual results could differ materially from those set forth in the forward-looking statements due to a variety of risks, uncertainties and other factors. Some factors that might cause such a difference include, but are not limited to, the following: risks associated with our investment strategy; a worsening economic environment in the U.S. or globally, including financial market fluctuations; risks associated with real estate markets, including declining real estate values; availability of proceeds from our offering of our shares; our failure to obtain, renew or extend necessary financing or to access the debt or equity markets; the use of debt to
finance our business activities, including refinancing and interest rate risk and our failure to comply with debt covenants; our ability to identify and close on suitable investments; failure to successfully manage growth or integrate acquired properties and operations; risks related to development projects or acquired property value-add conversions, including construction delays and cost overruns; inability to obtain necessary permits and/or public opposition to these activities; our ability to make necessary improvements to properties on a timely or cost-efficient basis; competition for properties and/or tenants; defaults on or non-renewal of leases by tenants; failure to lease properties on favorable terms or at all; the impact of current and future environmental, zoning and other governmental regulations affecting our properties; the impact of changes in accounting rules; the impact of regulations requiring periodic valuation of the Company on a per share basis; inaccuracies of our accounting estimates; unknown liabilities of acquired properties or liabilities caused by property managers or operators; material adverse actions or omissions by any joint venture partners, if applicable; increases in operating costs and other expenses; uninsured losses or losses in excess of our insurance coverage; the impact of outstanding and/or potential litigation; risks associated with our tax structuring; failure to qualify and maintain our REIT qualification; and our ability to protect our intellectual property and the value of our brand. Given these uncertainties, we caution you not to place undue reliance on such statements. For further information regarding risks and uncertainties associated with our business, please refer to the Managements Discussion and Analysis of Financial Condition and Results of Operations and Risk Factors sections of our documents filed from time to time with the U.S. Securities and Exchange Commission, including, but not limited to, our annual report on Form 10-K and quarterly reports on Form 10-Q, and our registration statement on Form S-11 and the sticker supplements and amendments thereto, copies of which may be obtained from our Web site at http://www.cnlhealthcaretrust.com.
We undertake no obligation to publicly release the results of any revisions to these forward looking-statements that may be made to reflect future events or circumstances or to reflect the occurrence of unanticipated events.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: March 26, 2013 |
CNL HEALTHCARE TRUST, INC. a Maryland Corporation |
|||||
By: |
/s/ Joseph T. Johnson |
|||||
Joseph T. Johnson Chief Financial Officer, Senior Vice President and Treasurer |
Exhibit 10.1
SECOND AMENDMENT TO ADVISORY AGREEMENT
THIS SECOND AMENDMENT TO ADVISORY AGREEMENT (this Amendment ) is made and entered into as of the 20th day of March, 2013, by and among CNL HEALTHCARE PROPERTIES, INC., a corporation organized under the laws of the State of Maryland f/k/a CNL Healthcare Trust, Inc. (the Company ), CHP PARTNERS, LP, a limited partnership organized under the laws of the State of Delaware f/k/a CHT Partners, LP (the Operating Partnership ), and CNL HEALTHCARE CORP., a corporation organized under the laws of the state of Florida f/k/a CNL Properties Corp. ( Advisor ).
RECITALS
WHEREAS, the Company, the Operating Partnership and the Advisor entered into that certain Advisory Agreement dated as of June 8, 2011, as amended by that certain First Amendment to Advisory Agreement by and among the Company, the Operating Partnership and the Advisor, dated as of October 5, 2011 (the Advisory Agreement ); and
WHEREAS, capitalized terms not defined herein shall have the meaning given to such terms in the Advisory Agreement; and
WHEREAS, the parties desire to enter into this Amendment for the purpose of amending certain provisions of the Advisory Agreement as more particularly set forth herein.
NOW, THEREFORE, for and in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
1. Recitals . The recitals set forth above are true and correct and constitute a part of this Amendment.
2. Restatement of Duties of the Advisor . Sections (3)(e) and (3)(g) of the Advisory Agreement are hereby amended and restated in their entirety to read as follows:
(3) (e) subject to the provisions of Sections 3(g) and 4 hereof (i) locate, analyze and select potential investments; (ii) structure and negotiate the terms and conditions of transactions pursuant to which investments will be made; (iii) make investments on behalf of the Company and the Operating Partnership in compliance with the investment objectives and policies of the Company; (iv) arrange for financing and refinancing and make other changes in the asset or capital structure of, and dispose of, reinvest the proceeds from the sale of, or otherwise deal with the investments; (v) enter into leases and service contracts for Real Property; (vi) perform all other operational functions for the maintenance and administration of Company Property; and (vii) make dispositions of any portion of a Real Property to any Person other than the Advisor, a Director or their Affiliates without obtaining the prior approval of the Board, provided such portion of a Real Property is sold, transferred or conveyed for a purchase price in an amount not to exceed One Million and No/100 Dollars ($1,000,000);
(g) obtain the prior approval of the Board, any particular Directors specified by the Board or any committee of the Board, as the case may be, for any and all investments in and dispositions of Real Properties (except, with respect to dispositions, as expressly permitted in 3(e)(vii) above);
3. Restatement of Asset Management Fee . Section (9)(a) of the Advisory Agreement is hereby amended and restated in its entirety to read as follows:
(9)(a) Asset Management Fee . The Company or the Operating Partnership shall pay to the Advisor as compensation for the advisory services rendered to the Company and the Operating Partnership a monthly fee of an amount equal to 0.08334% of the monthly average of the sum of the Companys and the Operating Partnerships respective daily Real Estate Asset Value (without duplication), plus the outstanding principal amount of any Loans made, plus the amount invested in Permitted Investments (excluding Real Estate Related Securities and other Securities), and a monthly fee of an amount equal to 0.1042% of the monthly average on the daily book value of Real Estate Related Securities and other Securities, (the Asset Management Fee ). The Asset Management Fee shall be payable monthly on the first business day following the last day of such month. The Asset Management Fee shall not exceed fees which are competitive for similar services in the same geographic area, and may or may not be taken, in whole or in part as to any year, in the sole discretion of the Advisor. All or any portion of the Asset Management Fee not taken as to any fiscal year shall be deferred without interest and may be taken in such other fiscal year as the Advisor shall determine.
4. Addition of Non-Solicitation Provision . The following provision is hereby added to and deemed included in the Advisory Agreement in its entirety as Section (33) thereof:
(33) Non-Solicitation . During the period commencing on the date hereof and ending one year following the termination of this Agreement, the Company and the Operating Partnership shall not, without the Advisors prior written consent, directly or indirectly, (a) solicit or encourage any person to leave the employment or other service of the Advisor, or (b) hire, on behalf of the Company, the Operating Partnership or any other person or entity, any person who has left the employment within the one year period following the termination of that persons employment with respect to the Advisor. During the period commencing on the date hereof through and ending one year following the termination of this Agreement, the Company and the Operating Partnership will not, whether for its own account or for the account of any other person, firm, corporation, or other business organization, intentionally interfere with the relationship of the Advisor with, or endeavor to entice away from the Advisor, any person who during the term of the Agreement is, or during the preceding one-year period, was a tenant, co-investor, co-developer, joint venturer, or other customer of the Advisor.
5. Binding Effect . This Amendment shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns.
6. Modification/Amendment . This Amendment may only be amended and modified in a writing signed by all of the parties hereto.
7. Execution of Amendment . A party may deliver executed signature pages to this Amendment by facsimile or electronic copy, which facsimile or electronic copy shall be deemed to be an original executed signature page. This Amendment may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which counterparts together shall constitute one agreement with the same effect as if the parties hereto had signed the same signature page.
8. Ratification . The terms and provisions in the Advisory Agreement are deemed amended if and to the extent inconsistent with the terms of this Amendment. Otherwise, the terms and the provisions in the Advisory Agreement are hereby ratified and confirmed by the parties hereto. Except as modified herein, all other terms and conditions of the Advisory Agreement shall continue in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first written above.
CNL HEATHCARE PROPERTIES, INC., a Maryland corporation | ||||||
By: |
/S/ STEPHEN H. MAULDIN |
|||||
Name: |
Stephen H. Mauldin |
|||||
Title: |
President |
|||||
CNL HEALTHCARE CORP., a Florida corporation | ||||||
By: |
/S/ THOMAS K. SITTEMA |
|||||
Name: |
Thomas K. Sittema |
|||||
Title: |
Chief Executive Officer |
|||||
CHP PARTNERS, LP, a | ||||||
Delaware limited partnership | ||||||
By: | CHP GP, LLC, a Delaware limited liability company, its general partner | |||||
By: | CNL Healthcare Properties, Inc., a Maryland corporation, managing member of general partner | |||||
By: |
/S/ STEPHEN H. MAULDIN |
|||||
Name: |
Stephen H. Mauldin |
|||||
Title: |
President |
Exhibit 10.2
Expense Support and Restricted Stock Agreement
This Expense Support and Restricted Stock Agreement (this Agreement), is made effective as of April 1, 2013 (the Commencement Date) by and among CNL Healthcare Properties, Inc. (the Company) and CNL Healthcare Corp. (the Advisor).
WHEREAS , the Company maintains on file with the U. S. Securities and Exchange Commission an effective registration statement on S-11 (File No. 333-168129), and amendments thereto, covering the continuous offering and sale of the Companys common stock pursuant to the Securities Act of 1933, as amended (the Registration Statement); and
WHEREAS , the Company and the Advisor have entered into an Advisory Agreement dated as of June 8, 2011, as amended by a First Amendment to Advisory Agreement dated as of October 5, 2011, as further amended by a Second Amendment to Advisory Agreement dated as of March 20, 2013 (collectively, the Advisory Agreement); and
WHEREAS , the Company is a REIT and, similar to other REITs, monitors its modified funds from operations, and has incurred, and continues to incur a certain level of operating expenses; and
WHEREAS , the Company and the Advisor have determined that it is appropriate and in the best interests of the Company to reduce its operating expenses relative to its invested assets.
NOW THEREFORE , in consideration of the premises and the mutual agreements herein contained, and for other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties hereto agree as follows:
Note: Capitalized terms not otherwise defined herein have the meaning ascribed to them in the Advisory Agreement.
1) | Expense Support. Beginning on the Commencement Date and continuing until terminated as provided herein, the Advisor shall provide expense support to the Company through forgoing the payment of fees in cash and acceptance of restricted stock for services as provided herein, in an amount equal to the positive excess, if any, of (a) aggregate stockholder cash distributions declared for the applicable quarter, over (b) the Companys aggregate modified funds from operations, as defined below, for the same period (the Expense Support Amount). The Expense Support Amount shall be determined for each calendar quarter of the Company, on a non-cumulative basis, with each such quarter-end date, a Determination Date. The Expense Support Amount will be credited by the Advisor to the Company in satisfaction of Asset Management Fees and other fees and expenses owed to the Advisor under the Advisory Agreement, at the Advisors discretion. For purposes of this Agreement, modified funds from operations (MFFO) shall have the same meaning as such term is defined in the Companys Form 10Q and Form 10K as filed pursuant to the Securities Exchange Act of 1934, as amended. |
2) |
Grant of Restricted Stock . In exchange for services rendered under the Advisory Agreement and in consideration of the expense support provided by the Advisor as set forth in Section 1, the Company shall issue to the Advisor, within forty-five (45) days following each Determination Date, a number of shares of Common Stock (the Restricted Stock) equal to |
the quotient of the Expense Support Amount for the preceding quarter divided by the then-current public offering price per share of Common Stock, on the terms and conditions and subject to the restrictions set forth in this Agreement. |
3) | Restricted Period; Vesting . Except as otherwise provided herein, the Restricted Stock will vest immediately prior to or upon the occurrence of a Liquidity Event in which the Companys stockholders will receive (i) total Distributions in an amount equal to 100% of Invested Capital, and (ii) an amount sufficient to pay the Stockholders a Priority Return (the Vesting Threshold). The period between the Commencement Date and the date of the Liquidity Event is referred to as the Restricted Period. Prior to the occurrence of the Liquidity Event, the Board shall determine whether the Vesting Threshold is anticipated to be met and whether the Restricted Stock will be forfeited or will vest, and upon such determination the Restricted Stock will immediately and permanently vest, or be immediately and permanently forfeited. In all cases the Restricted Stock will either vest or be forfeited prior to the declaration of a Distribution related to the Liquidity Event. If the Restricted Stock does not vest after the Restricted Period, the Restricted Stock shall be immediately and permanently forfeited. |
4) | Termination of Advisory Agreement: In the event the Advisory Agreement is terminated without Cause by the Company, during the Restricted Period, the Restricted Stock will vest upon termination (the Termination Date) if the Board of Directors most recent estimated net asset value (NAV) per share of Common Stock plus total Distributions received by Stockholders prior to the Termination Date is equal to or greater than the Vesting Threshold as calculated through the Termination Date. If the Board of Directors has not conducted an evaluation of the Companys NAV per share of Common Stock as of the Termination Date, or if the Vesting Threshold is not met as aforesaid, the Restricted Stock shall be immediately and permanently forfeited. If the Restricted Stock does not vest at the Termination Date pursuant to this section 4, the Restricted Stock shall be immediately and permanently forfeited. If the Company terminates the Advisory Agreement for Cause during the Restricted Period, the Restricted Stock shall be immediately and permanently forfeited. If the Advisor terminates the Advisory Agreement during the Restricted Period, the Restricted Stock shall be immediately and permanently forfeited. |
5) | Restrictions . Subject to any exceptions set forth in this Agreement or the Plan, during the Restricted Period, the Restricted Stock or the rights relating thereto may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Advisor. Any attempt to assign, alienate, pledge, attach, sell or otherwise transfer or encumber the Restricted Stock or the rights relating thereto during the Restricted Period shall be wholly ineffective and, if any such attempt is made, the Restricted Stock will be forfeited by the Advisor and all of the Advisors rights to such shares shall immediately terminate without any payment or consideration by the Company. |
6) | Rights as Stockholder; Dividends . |
a) | The Advisor shall be the record owner of the Restricted Stock until the shares of Common Stock are sold or otherwise disposed of, and shall be entitled to all of the rights of a stockholder of the Company including, without limitation, the right to vote such shares (to the extent permitted by the Articles) and receive all dividends and other distributions paid with respect to such shares. All dividends or other distributions actually paid to the Advisor in connection with the Restricted Stock shall vest immediately and will not be subject to forfeiture. |
b) | The Company may issue stock certificates or evidence the Advisors interest by using a restricted book entry account with the Companys transfer agent. Physical possession or custody of any stock certificates that are issued shall be retained by the Company until such time as the Restricted Stock represented by such stock certificates vests. |
c) | If the Restricted Stock is forfeited in accordance with Sections 3, 4 or 5 of this Agreement, the Advisor shall, on the date of such forfeiture, no longer have any rights as a stockholder with respect to the Restricted Stock and shall no longer be entitled to vote or receive dividends or other distributions on such shares. |
7) | REIT Status. The parties acknowledge and agree not to take any action that would impact the Companys ability to qualify as a REIT, and further agree to amend this agreement if necessary to allow the Company to continue to qualify as a REIT. |
8) | Term and Termination of Agreement . This Agreement shall remain in effect until December 31, 2013, unless otherwise terminated pursuant to this Section 8. This Agreement may be terminated by either party upon thirty (30) days prior written notice to the other party. This Agreement shall automatically terminate in the event of (a) the termination by the Company of the Advisory Agreement or (b) the dissolution or liquidation of the Company. |
9) | Headings . The captions of this Agreement are included for convenience only and in no way define or limit any of the provisions hereof or otherwise affect their construction or effect. |
10) | Interpretation . This Agreement shall be governed by and construed in accordance with the laws of the State of Florida (without reference to its conflicts of laws provisions). |
11) | Severability . If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby and, to this extent, the provisions of this Agreement shall be deemed to be severable. |
12) | Entire Agreement . This Agreement embodies the entire agreement and understanding of the parties hereto, and supersedes all prior agreements or understandings (whether written or oral), with respect to the subject matter hereof. |
13) | Amendments and Counterparts . This Agreement may only be amended by mutual written consent of the parties. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, and all such counterparts shall, together, constitute only one instrument. |
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by their respective officers thereunto duly authorized, as of the day and year first above written.
CNL HEALTHCARE PROPERTIES, INC. | ||
By: |
/s/ Stephen H. Mauldin |
|
Name: | Stephen H. Mauldin | |
Title: | Chief Executive Officer | |
CNL HEALTHCARE CORP. | ||
By: |
/s/ Robert A. Bourne |
|
Name: | Robert A. Bourne | |
Title: | Vice Chairman |
Exhibit 10.3
SECOND ADDENDUM TO
SERVICE AGREEMENT
THIS SECOND ADDENDUM TO THE SERVICE AGREEMENT (the Second Addendum ) dated this 20 th day of March, 2013 by and between CNL CAPITAL MARKETS CORP., ( CCM ) and CNL HEALTHCARE PROPERTIES, INC., (f/k/a CNL Properties Trust, Inc.), (the Issuer ), amends that certain Service Agreement entered into by CCM and Issuer and dated June 8, 2011, as amended January 1, 2012 (the Agreement ).
In consideration of the mutual covenants and conditions contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree to modify the Agreement as follows:
1. By amending and restating Section 8 to read as follows:
8. | Term and Termination |
A. The initial term of this Agreement shall commence on the Effective Date as noted above and shall expire on December 31, 2011. Upon the expiration of such initial term or any renewal thereof, this Agreement shall then automatically be renewed for consecutive one (1) year periods (each such renewal, a Renewal Term). Renewal Terms exactly align with a given calendar year. Notwithstanding the above, the Agreement may otherwise be terminated earlier as follows:
1. By either CCM or Issuer, after having given the other party at least one-hundred twenty (120) calendar days advance written notice of its intent to terminate.
2. In the event that CCM shall fail to perform material services hereunder and such failure may result in a material adverse effect on Issuers business, Issuer may terminated this Agreement immediately on written notice to CCM.
B. In the event that this Agreement is terminated, regardless of the reason for such termination, CCM agrees to cooperate with Issuer to provide for an orderly transfer of functions to the successor service provider.
All capitalized terms shall mean the same as in the Agreement. The Effective Date of this Addendum is the same as the Effective Date of the Agreement.
This Second Addendum may be executed in any number of counterparts. Facsimile and/or electronic signatures on counterparts of this Agreement are hereby authorized and shall be acknowledged as if such facsimile/electronic signatures were an original execution.
All other provisions of the Agreement shall remain the same and shall remain in full force and effect.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the undersigned parties have caused this Second Addendum to the Service Agreement to be duly executed by the following authorized individuals for the purposes expressed herein as of the day and year first above written.
CNL HEALTHCARE PROPERTIES, INC. | CNL CAPITAL MARKETS CORP. | |||||||
ISSUER | CCM | |||||||
By: |
/S/ HOLLY J. GREER |
By: |
/S/ ROBERT A. BOURNE |
|||||
Name: |
Holly J. Greer |
Name: |
Robert A. Bourne |
|||||
Title: |
Senior Vice President |
Title: |
Vice Chairman |
2 nd Addendum to Service Agreement (CHP-CCM)