AVIV HEALTHCARE PROPERTIES LIMITED PARTNERSHIP CLASS D UNIT AWARD AGREEMENT
Exhibit 10.7
AVIV HEALTHCARE PROPERTIES LIMITED PARTNERSHIP
Aviv Healthcare Properties Limited Partnership, a Delaware limited partnership (the
“Partnership”), hereby grants to [ ] (the “Holder”) as of [l], (the “Grant
Date”) a restricted unit award (the “Award”) of [l] Class D Units (“Class D Units”), as
defined in the Amended and Restated Agreement of Limited Partnership of the Partnership, dated as
of September 17, 2010, among the Partners of the Partnership as such agreement may be amended from
time to time (the “Partnership Agreement”), upon and subject to the restrictions, terms and
conditions set forth below. Capitalized terms not defined herein shall have the meanings specified
in the Partnership Agreement.
1. Award Subject to Acceptance of Agreement. The Award shall be null and void unless
the Holder shall accept (a) this Class D Unit Award Agreement (this “Agreement”) and (b) all of the
terms and conditions of the Partnership Agreement, including, without limitation, the power of
attorney granted in Section 2.4 of the Partnership Agreement, in each case by executing this
Agreement in the space provided below and returning it to the Partnership.
2. Substitution for and Conversion of Outstanding Award. The Award has been granted
to the Holder in substitution for the Holder’s restricted unit award of Class D Units which was
granted to the Holder on August 9, 2005 (the “Outstanding Award”). By accepting the Award, the
Holder acknowledges that, as of the Grant Date, (i) the Holder shall have no further rights of any
kind with respect to the Outstanding Award, including but not limited to any payment rights or
rights to receive any units (or other securities in respect thereof), whether deemed vested or
unvested under the Outstanding Award, pursuant to the award agreement which evidenced the
Outstanding Award or otherwise and (ii) the Class D Units granted pursuant to the Outstanding Award
shall be deemed canceled and of no further force or effect. By granting the Award, the Partnership
is converting the Outstanding Award agreement on the date of the Holder’s acceptance of this
Agreement in accordance with Section 1 (the “Acceptance Date”) and the Holder shall, upon the
Partnership’s request, promptly return the Outstanding Award agreement for cancellation on the
Acceptance Date. Such conversion and cancellation of the Outstanding Award agreement shall be
effective on the Acceptance Date regardless of whether the Holder returns the Outstanding Award
agreement.
3. Rights as the Holder. The Holder shall have no rights with respect to any Class D
Units awarded hereunder until the Holder has satisfied the terms of this Agreement and any other
requirement imposed on Partners by applicable law, the Partnership Agreement or any other agreement
among the Partners.
4. Vesting and Value of Class D Units.
4.1. Vesting.
(a) The Award shall vest with respect to 20% of the number of Class D Units subject to the
Award on December 31, 2010 and 40% of the number of Class D Units subject to
the Award on December
31, 2011, subject to the Holder’s continuous employment with any of the General Partner, Aviv Asset
Management, L.L.C. (“AAM”), the Partnership, the Operating Partnership or any Affiliate of the
Partnership through the applicable vesting date.
(b) In connection with an Initial Public Offering, the Award shall vest with respect to 40% of
the number of Class D Units subject to the Award on the Lockup Expiration Date and after taking
into account the conversion contemplated by Section 5.2, subject to the Holder’s continuous
employment with any of the General Partner, AAM, the Partnership, the Operating Partnership or any
Affiliate of the Partnership through the applicable vesting date. For purposes of this Agreement,
(i) the term “Initial Public Offering” means an initial public offering of shares of common stock
of the General Partner under the Securities Act, and (ii) the term “Lockup Expiration Date” means
the day following the date on which any lockup agreement entered into by directors or senior
employees of the General Partner with the underwriters of such Initial Public Offering expires,
after taking into account any extension of such agreement in accordance with the terms thereof;
provided, that, to the extent any such lockup agreements have differing expiration
dates, the Lockup Expiration Date shall be determined with reference to the lockup agreement
executed by the Holder or, if the Holder does not execute a lockup agreement, the lockup agreement
executed by the chief executive officer of the General Partner (without, in each case, taking into
account any waivers by the underwriters to allow partial sales of common stock prior to the
expiration of any such lockup).
(c) Any portion of the Class D Units that has not become vested pursuant to this section on or
prior to the occurrence of a (i) a Partnership Control Transaction, (ii) any transaction, or series
of related transactions, resulting in any Change in Control or, if equity securities other than
common stock and Series A Preferred Stock of the General Partner are outstanding, more than 50% of
the value of the outstanding equity of the General Partner or a merger or consolidation of the
General Partner (other than mergers or consolidations that do not result in a Change in Control),
(iii) a sale of more than 50% of the value of the partnership units of the Operating Partnership,
as determined by the General Partner, (iv) an Asset Sale or a direct or indirect disposition of all
or substantially all of the assets of the General Partner or the Operating Partnership or (v) a
Liquidating Event (each a “Fundamental Transaction”), shall become immediately vested upon such
occurrence, subject to the Holder’s continuous employment with any of the General Partner, AAM, the
Partnership, the Operating Partnership or any Affiliate of the Partnership through the applicable
vesting date. For purposes of this Agreement, a “Change in Control” means the acquisition by any
one person or more than one person acting as a group of more than 50% of the outstanding shares of
common stock of the General Partner; provided that a Change in Control shall not be deemed
to occur as a result of the acquisition of shares of common stock of the General Partner by any
person or persons that hold shares of common stock of the General Partner at the time of the
Initial Public Offering.
(d) Any portion of the Class D Units that has not become vested pursuant to this Section on or
prior to the date the Holder is no longer employed for any reason by the General Partner, AAM, the
Partnership, the Operating Partnership or any Affiliate of the Partnership shall be forfeited and
shall not thereafter become vested.
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4.2. Value. As determined by the General Partner, the gross value of the Partnership
on the grant date of the Outstanding Award was $[l] (the “Grant Date Partnership Value”).
The Class D Units awarded hereunder that have vested shall be eligible to share in proceeds from
the Partnership upon the occurrence of a Fundamental Transaction, but only to the extent such
proceeds exceed the sum of (i) the Grant Date Partnership Value and (ii) the gross value (as
reflected on the books of the Partnership) of any additional properties acquired by or contributed
to the Partnership after such grant date, as determined by the General Partner (the total of such
sum, the “Base Value”).
5. Rights as a Class D Unitholder.
5.1. Subject to Partnership Agreement. A holder of vested Class D Units (a “Class D
Unitholder”) has the right to receive certain distributions, if any, made with respect to such
Class D Units by the Partnership pursuant to Section 5.2(b) of the Partnership Agreement (such
distributions are provided for upon the occurrence of an Asset Sale or a Liquidating Event). A
Class D Unitholder shall be entitled to receive distributions (as determined in accordance with the
Partnership Agreement) with respect to his or her vested Class D Units only to the extent that the
aggregate proceeds received by the Partnership exceed the Base Value, and after any distributions
to other partners of the Partnership as may be required under the Partnership Agreement.
5.2. In Connection With an Initial Public Offering.
(a) On the date of the consummation of an Initial Public Offering, any Class D Units which
have not become vested in accordance with Section 4.1(a) on or prior to such date shall be
converted into an economically equivalent number of restricted common limited partner interests in
the Partnership or a successor partnership or shares of restricted common stock of the General
Partner, which restricted partner interests or shares shall become vested and unrestricted on the
earlier of (i) the date or dates on which such Class D Units would have vested in accordance with
Section 4.1(a) or, if later, the Lockup Expiration Date and (ii) a Change in Control, in each case
subject to the Holder’s continuous employment with the General Partner or any Affiliate of the
General Partner through the applicable vesting date.
(b) On the date of the consummation of an Initial Public Offering, any Class D Units which
have become vested in accordance with Section 4.1(a) on or prior to such date shall be converted
into an economically equivalent number of restricted common limited partner interests in the
Partnership or a successor partnership or shares of restricted common stock of the General Partner
which shall become unrestricted on the Lockup Expiration Date.
(c) In the event that any Class D Units are converted into common limited partner interests in
the Partnership or a successor partnership or shares of common stock of the General Partner
(restricted or unrestricted) pursuant to this Section 5.2, the Holder shall have no further rights
with respect to the Class D Units or any distributions or any other rights as a holder of interests
in the Partnership. The number of such common limited partner interests or shares of common stock
(and the terms thereof and the rights associated therewith) into which the Class D
Units are converted shall be determined by the General Partner, which determination shall be
final and binding.
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6. Additional Terms and Conditions of Award.
6.1. Nontransferability of Award. The Class D Units awarded hereunder may not be
sold, transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed of (whether by
operation of law or otherwise) or be subject to execution, attachment or similar process. Upon any
attempt to so sell, transfer, assign, pledge, hypothecate or encumber, or otherwise dispose of such
Class D Units, the Award shall immediately become null and void. All Class D Units shall be
subject to the restrictions and conditions on transferability set forth in the Partnership
Agreement or in any other agreement among the Partners.
6.2. Withholding Taxes. The Holder shall, upon request by the General Partner, pay to
the Partnership such amount of cash as AAM or the Partnership may be required, under all
applicable federal, state, local or other laws or regulations, to withhold and pay over as income
or other withholding taxes (the “Required Tax Payments”) with respect to the Award. If the Holder
shall fail to advance the Required Tax Payments after request by the General Partner, the
Partnership may, in its discretion, deduct any Required Tax Payments from any amount then or
thereafter payable by the Partnership to the Holder.
6.3. Award Confers No Rights to Continued Employment. In no event shall the granting
of the Award or its acceptance by the Holder give or be deemed to give the Holder any right to
continued employment by the General Partner, AAM, the Partnership, the Operating Partnership or any
Affiliate of the Partnership.
6.4. Decisions of the General Partner. The General Partner shall have the right to
resolve all questions which may arise in connection with the Award. Any interpretation,
determination or other action made or taken by the General Partner regarding this Agreement shall
be final, binding and conclusive.
6.5. Agreement Subject to the Partnership Agreement. This Agreement is subject to the
provisions of the Partnership Agreement and shall be interpreted in accordance therewith.
7. Miscellaneous Provisions.
7.1. Successors. This Agreement shall be binding upon and inure to the benefit of any
successor or successors of the General Partner, AAM, the Partnership, the General Partner and any
person or persons who shall, upon the death of the Holder, acquire any rights hereunder in
accordance with this Agreement.
7.2. Notices. All notices, requests or other communications provided for in this
Agreement shall be made:
If to the Partnership, to:
Aviv Healthcare Properties Limited Partnership
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Attn: [ ]
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Attn: [ ]
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Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
And if to the Holder, to the Holder’s address set forth in the Partnership’s records.
All notices, requests or other communications provided for in this Agreement shall be made in
writing either (a) by personal delivery to the party entitled thereto, (b) by facsimile with
confirmation of receipt, (c) by mailing in the United States mails to the last known address of the
party entitled thereto or (d) by express courier service. The notice, request or other
communication shall be deemed to be received upon personal delivery, upon confirmation of receipt
of facsimile transmission, or upon receipt by the party entitled thereto if by United States mail
or express courier service; provided, however, that if a notice, request or other
communication is not received during regular business hours, it shall be deemed to be received on
the next succeeding business day of the Partnership.
7.3. Governing Law. This Agreement, the Award and all determinations made and actions
taken pursuant hereto and thereto, to the extent not otherwise governed by the laws of the United
States, shall be governed by the laws of the State of Delaware and construed in accordance
therewith without giving effect to conflicts of laws principles.
7.4. Arbitration. Any dispute or controversy between the General Partner, AAM or the
Partnership and the Holder, whether arising out of or relating to this Agreement, the breach of
this Agreement, or otherwise, shall be settled by arbitration in Chicago, Illinois, administered by
the American Arbitration Association, with any such dispute or controversy arising under this
Agreement being so administered in accordance with its Commercial Rules then in effect, and
judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction
thereof. The arbitrator shall have the authority to award any remedy or relief that a court of
competent jurisdiction could order or grant. Except as necessary in court proceedings to enforce
this arbitration provision or an award rendered hereunder, neither a party nor an arbitrator may
disclose the existence, content or results of any arbitration hereunder without the prior written
consent of the General Partner, AAM, the Partnership and the Holder. The General Partner, AAM, the
Partnership and the Holder acknowledge that this Agreement evidences a transaction involving
interstate commerce. Notwithstanding any choice of law provision included in this Agreement, the
United States Federal Arbitration Act shall govern the interpretation and enforcement of this
arbitration provision.
7.5. Counterparts. This Agreement may be executed in two counterparts each of which
shall be deemed an original and both of which together shall constitute one and the same
instrument.
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IN WITNESS WHEREOF, the each of the undersigned has executed and delivered this Class D Unit
Award Agreement as of the day and year first written above.
| AVIV HEALTHCARE PROPERTIES LIMITED PARTNERSHIP | ||||||
| By: Aviv REIT, Inc., its general partner | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | Chief Executive Officer and President | |||||
| AVIV ASSET MANAGEMENT, L.L.C. | ||||||
| By: | Aviv Healthcare Properties Limited Partnership, its sole member |
|||||
| By: | Aviv REIT, Inc., its general partner | |||||
| By: | ||||||
| Name: | ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ | |||||
| Title: | Chief Executive Officer and President | |||||
Class D Unit Award Agreement (Existing Holder)