Exhibit 10.1

 

OP CONTRIBUTION AGREEMENT

 

OP CONTRIBUTION AGREEMENT, dated as of April 12, 2005 (this “Agreement”), among
VENTAS, INC. (“Parent”), ELDERTRUST OPERATING LIMITED PARTNERSHIP (“Parent OP”)
and the undersigned holder (the “Holder”) of common units of limited partnership
interests (the “LTIP Units”) issued pursuant to the Long Term Incentive Plan of
PROVIDENT SENIOR LIVING TRUST (the “Company”).

 

WHEREAS, as of the date hereof, Holder beneficially owns the number of LTIP
Units set forth on the Holder signature page hereto (the “Contributed LTIP
Units”);

 

WHEREAS, Parent, VTRP MERGER SUB, LLC (“Merger Sub”) and the Company have
entered into an Agreement and Plan of Merger, dated as of April 12, 2005 (the
“Merger Agreement”), which provides, among other things, for the merger of the
Company with and into Merger Sub, upon the terms and subject to the conditions
set forth therein (the “Merger”);

 

WHEREAS, the Merger Agreement provides that (i) Parent shall cause Parent OP to
amend the limited partnership agreement of Parent OP (the “Class D Amendment”)
in order to create Parent OP Units having terms and conditions substantially as
described in this Agreement and (ii) Parent shall register the shares of Parent
Common Stock issuable upon conversion of the Parent OP Units pursuant to and in
accordance with the terms of the Registration Rights Agreement to be executed
and delivered by Parent as provided in the Merger Agreement; and

 

WHEREAS, as a condition to the willingness of Parent and Merger Sub to enter
into the Merger Agreement, and in order to induce Parent, Merger Sub and the
Company to enter into the Merger Agreement, Parent and Merger Sub have required
that Holder agree to enter into this Agreement.

 

Capitalized terms used but not otherwise defined in this Agreement have the
meanings assigned to such terms in the Merger Agreement.

 

NOW, THEREFORE, in consideration of the representations, warranties, covenants
and agreements contained in this Agreement, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, and
intending to be legally bound hereby, the parties hereto agree as follows:

 

Article I.

 

CONTRIBUTION OF CONTRIBUTED LTIP UNITS

 

Section 1.1. Contribution of LTIP Units and Issuance of OP Consideration. At the
Effective Time, Holder shall contribute all of the Contributed LTIP Units to
Parent OP in exchange for the issuance to Holder of the OP Consideration as set
forth in Section 2.2(a) of the Merger Agreement. Holder agrees to convert any
LTIP Units issued to such Holder after the date hereof into shares of Company
Common Stock prior to the Effective Time. The Company

 

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may execute and deliver such instruments of contribution or conversion on behalf
of Holder at the Effective Time if necessary in order to effectuate the intent
and purposes of this Agreement (it being understood that the Company is a third
party beneficiary of this provision).

 

Section 1.2. Issuance to Holder of OP Consideration. At the Effective Time, (i)
Parent OP shall issue to Holder the OP Consideration as set forth in Section
2.2(a) of the Merger Agreement and (ii) Parent shall enter into the Registration
Rights Agreement substantially in the form attached as Exhibit E to the Merger
Agreement.

 

Section 1.3. Amendment to Partnership Agreement.

 

(a) At the Effective Time, Parent OP and Holder shall enter into the Class D
Amendment to create the Parent OP Units to be issued to Holder and to admit
Holder as a limited partner of Parent OP.

 

(b) The Class D Amendment shall provide, among other things, that (i) each
Parent OP Unit shall be convertible at any time, at the holder’s election,
initially into one (1) share of Parent Common Stock (subject to customary
adjustments for stock splits, dividends, etc.); (ii) upon a liquidation of
Parent OP, distributions shall be made to holders of the Parent OP Units in
accordance with their respective capital accounts (with capital accounts subject
to the usual book-up provisions); (iii) each Parent OP Units shall be freely
transferable by the holders thereof subject only to (A) federal and applicable
state securities laws (and that the only requirement to any transferee being
admitted as a limited partner in Parent OP shall be the execution of a
counterpart to Parent OP’s limited partnership agreement) and (B) Parent OP not
becoming classified as a “publicly traded partnership” within the meaning of
Section 7704 of the Code as a consequence of such transfer; (iv) each holder of
a Parent OP Unit shall be entitled to at least 30 days advance notice prior to
the scheduled closing date in the event that Parent OP intends to sell or
otherwise dispose of any of the properties acquired pursuant to the FBA SPA or
the AHC SPA in a manner that would result in taxable income or gain being
allocated to such holder in accordance with the requirements of Section 704(c)
of the Code; and (v) after the first anniversary of the grant of the Parent OP
Units, Parent OP may elect to cause the redemption of such Parent OP Units for
the number of shares of Parent Common Stock that such Parent OP Units could then
be converted into.

 

(c) The Class D Amendment shall also provide that each Parent OP Unit shall
entitle the holder thereof to distributions equal to the dividends payable on
one (1) share of Parent Common Stock at the same time as such dividends are
payable and for the same periods covered by such dividends. Parent OP Units will
be allocated federal taxable income of the Parent OP each taxable year in an
amount equal to (i) the amount of cash so distributed to such Parent OP Units
with respect to such taxable year, plus (ii) the amount of any aggregate net
losses of the Parent OP allocated to such Parent OP Units in prior taxable
years. For this purpose, amounts distributed in accordance with Parent’s
dividend policy after the close of a taxable year, but declared prior to the
close of such taxable year, shall be taken into account in determining the
federal taxable income to be allocated to the Parent OP Units with respect to
such taxable year.

 

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(d) The Class D Amendment (i) shall not include any provision adversely
affecting the rights of Holder described in this Section 1.3 and (ii) shall
provide that such rights may not be amended with respect to a Holder without
such Holder’s consent.

 

Section 1.4. Transfer of Contributed LTIP Units.

 

(a) Holder agrees that, during the period from the date of this Agreement
through the earlier of the Effective Time and the Expiration Date (as defined
below), Holder shall not cause or permit any Transfer (as defined below) of any
of the Contributed LTIP Units to be effected without Parent’s prior written
consent. A Person shall be deemed to have effected a “Transfer” of a security if
such person directly or indirectly: (i) sells, pledges, encumbers, grants an
option with respect to, transfers or disposes of such security or any interest
in such security; or (ii) enters into an agreement or commitment providing for
the sale of, pledge of, encumbrance of, grant of an option with respect to, the
transfer or disposition of such security or any interest therein.

 

(b) Notwithstanding anything to the contrary contained in Section 1.4(a), Holder
may Transfer all or a portion of the Contributed Units to any Eligible
Transferee (as defined below) without Parent’s consent, provided that such
Eligible Transferee agrees to be bound by this Agreement as a Holder. For the
purposes of this Section 1.4, an “Eligible Transferee” shall mean any
corporation, partnership, limited liability company or trust (or other
custodianship), the stockholders, partners, members or trustees, as the case may
be, of which include and may include only Holder and his Eligible Persons; and
“Eligible Person” shall mean (x) the spouse of Holder, (y) the father or mother
or any brother or sister of Holder or (z) any lineal descendant of Holder or of
the spouse of such descendant.

 

Section 1.5. No Inconsistent Actions by Holder. While this Agreement is in
effect, no party hereto shall take any action inconsistent with the provisions
of this Agreement.

 

Section 1.6. Additional Documents. Parent and Parent OP, on the one hand, and
Holder (in its capacity as such), on the other hand, each hereby covenants and
agrees to execute and deliver any additional documents necessary or desirable,
in the reasonable opinion of Parent and the Company, to carry out the intent of
this Agreement.

 

Article II.

 

REPRESENTATIONS AND WARRANTIES

 

Section 2.1. Representations and Warranties of Holder. Holder hereby represents
and warrants to Parent and Parent OP that as of the date hereof and the
Effective Time:

 

(a) Due Authorization, etc. Holder has all requisite legal capacity, power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by or on behalf of Holder and, assuming its due authorization,
execution and delivery by Parent and Parent OP, constitutes a legal, valid and
binding obligation of Holder, enforceable against Holder in accordance with its
terms. The Class D Amendment, upon its execution and delivery in

 

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accordance with this Agreement by or on behalf of Holder will constitute a
legal, valid and binding obligation of Holder, enforceable against it in
accordance with its terms.

 

(b) No Conflicts, Required Filings and Consents.

 

(i) The execution and delivery of this Agreement by Holder does not, and the
performance of this Agreement by Holder will not, (i) conflict with or violate
any Legal Requirement applicable to Holder or by which Holder or any of Holder’s
assets or properties is bound or affected or (ii) violate or conflict with any
Contract to which Holder is a party or by which any of its assets or properties
is bound.

 

(ii) The execution and delivery of this Agreement by Holder does not, and the
performance of this Agreement by Holder will not, require any consent, approval,
order or authorization of, or registration, declaration or filing with, or
permit from, any Governmental Agency or other Person.

 

(iii) Except for this Agreement, there are no voting trusts or other agreements
or understandings, including, without limitation, any proxies, in effect
governing the voting of the Contributed LTIP Units.

 

(c) Title to Contributed LTIP Units. Holder is the sole beneficial owner of the
Contributed LTIP Units set forth on the Holder’s signature page hereto and holds
all rights, title and interest with respect thereto, free and clear of any Liens
that would adversely affect the ability of Holder to carry out the terms of this
Agreement. Except for the Contributed LTIP Units, Holder does not as of the date
hereof beneficially own any LTIP Units (or any other securities or interests in
Company OP). No other Person has any voting rights with respect to the
Contributed LTIP Units.

 

(d) Reliance on Information. Holder understands and acknowledges that Parent and
Merger Sub are entering into the Merger Agreement in reliance upon the execution
and delivery of this Agreement by Holder.

 

Section 2.2. Representations and Warranties of Parent and Parent OP. Each of
Parent and Parent OP hereby represents and warrants to Holder that as of the
date hereof and the Effective Time:

 

(a) Good Standing; Due Authorization, etc. Parent OP is duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization. It has all requisite power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by it and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
action on its part. This Agreement has been duly executed and delivered by or on
behalf of it and, assuming its due authorization, execution and delivery by
Holder, constitutes a legal, valid and binding obligation of it, enforceable
against it in accordance with its terms. The Class D Amendment, upon its
execution and delivery in accordance with this Agreement by or on behalf of
Parent OP will constitute a legal, valid and binding obligation of Parent OP,
enforceable against it in accordance with its terms.

 

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(b) No Conflicts, Required Filings and Consents.

 

(i) The execution and delivery of this Agreement by it does not, and the
performance of this Agreement by it will not, (i) conflict with or violate any
Legal Requirement applicable to it or by which it or any of its assets or
properties is bound or affected or (ii) violate or conflict with the limited
partnership agreement of Parent OP or any other Contract to which it is a party
or by which any of its assets or properties is bound.

 

(ii) The execution and delivery of this Agreement by it does not, and the
performance of this Agreement by it will not, require any consent, approval,
order or authorization of, or registration, declaration or filing with, or
permit from, any Governmental Agency or other Person.

 

(c) Certain Tax Matters. Parent acknowledges that, immediately prior to the
Effective Time, each of the Contributed LTIP Units shall constitute a fully
vested LTIP Unit. Upon the contribution of the Contributed LTIP Units to Parent
OP pursuant to this Agreement, the capital account of Holder in Parent OP shall
be equal to the fair market value of the Contributed LTIP Units.

 

(d) Other Representations Regarding Parent OP. Parent is the General Partner
Entity (as defined in the limited partnership agreement of Parent OP). The
Credit Agreement (as defined in the limited partnership agreement of Parent OP)
has been terminated. A correct and complete copy of the limited partnership
agreement of Parent OP, as it currently exists with all amendments thereto, has
been delivered to the Company.

 

Article III.

 

MISCELLANEOUS

 

Section 3.1. Expenses. Except as otherwise provided herein, all costs and
expenses incurred in connection with the transactions contemplated by this
Agreement shall be paid by the party incurring such costs and expenses.

 

Section 3.2. Notices. Any notice or other communication required or permitted
hereunder shall be in writing (including facsimile transmission (provided that
such delivery shall not constitute notice to the Holder)) and shall be given,

 

(a) if to Parent to:

 

     Ventas, Inc.

     10350 Ormsby Park Place

     Suite 300

     Louisville, KY 40223

     Attention:  T. Richard Riney

     Facsimile: (502) 357-9050

 

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and with a concurrent copy to:

 

Willkie Farr & Gallagher LLP

787 Seventh Avenue

New York, NY 10019-6099

Attention: Thomas M. Cerabino

Fax: (212) 728-8111

 

  (b) if to Holder to:

 

The address set forth on the Holder’s signature page hereto

 

and, prior to the Effective Time, with a concurrent copy to:

 

Sidley Austin Brown & Wood LLP

787 Seventh Avenue

New York, NY 10019

Attention: Scott M. Freeman

Fax: (212) 839-5599

 

or such other address as such party may hereafter specify for the purpose by
notice to the other parties hereto. All notices and other communications
hereunder shall be in writing and shall be deemed duly given upon due receipt if
delivered personally, by facsimile (provided that such delivery shall not
constitute notice to the Holder), by a recognized next-day courier service or by
registered or certified mail, return receipt requested, postage prepaid.

 

Section 3.3. Termination. Unless terminated earlier upon the written agreement
of each of the parties hereto, this Agreement shall terminate (the “Expiration
Date”) and be of no further force or effect, automatically and without any
required action of the parties hereto, at such date and time as the Merger
Agreement shall have been validly terminated pursuant to Section 9.1 thereof;
provided that no such termination shall relieve any party of liability for a
breach hereof prior to termination. Notwithstanding the foregoing, Section 3.1
hereof shall survive the Expiration Date in accordance with its terms.

 

Section 3.4. Assignment. Neither this Agreement nor any of the rights, duties,
or obligations of any party hereunder may be assigned or delegated (by operation
of law or otherwise) by either party hereto except with the prior written
consent of the other parties hereto.

 

Section 3.5. Descriptive Headings. The descriptive headings of the several
sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.

 

Section 3.6. Entire Agreement. This Agreement constitutes the entire agreement
among the parties hereto with respect to the subject matter hereof, supersedes
and is in full substitution for any and all prior agreements and understandings
among them relating to such subject matter, and no party shall be liable or
bound to the other party hereto in any manner with respect to such subject
matter by any warranties, representations, indemnities, covenants, or agreements
except as specifically set forth herein.

 

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Section 3.7. Amendment. This Agreement may not be amended, modified or rescinded
except by an instrument in writing signed by each of the parties hereto.

 

Section 3.8. Counterparts. For the convenience of the parties, any number of
counterparts of this Agreement may be executed by any one or more parties
hereto, and each such executed counterpart shall be, and shall be deemed to be,
an original, but all of which shall constitute, and shall be deemed to
constitute, in the aggregate but one and the same instrument.

 

Section 3.9. Governing Law; Venue.

 

(a) This Agreement and the legal relations between the parties hereto shall be
governed by and construed in accordance with the laws of the State of New York
applicable to contracts made and performed therein.

 

(b) Any proceeding seeking to enforce any provision of, or based on any right
arising out of, this Agreement may be brought against any of the parties only in
the courts of the State of New York, County of New York, or, if it has or can
acquire jurisdiction, in the United States District Court for the Southern
District of New York, and each of the parties consents to the jurisdiction of
such courts (and of the appropriate appellate courts) in any such action or
proceeding and waives any objection to venue laid therein.

 

(c) Process in any proceeding referred to in the preceding sentence may be
served on any party anywhere in the world.

 

(d) Each party to this Agreement waives, to the fullest extent permitted by
applicable Legal Requirements, any right it may have to a trial by jury in
respect of any action, suit or proceeding arising out of or relating to this
Agreement.

 

Section 3.10. Severability. In the event that any one or more of the provisions
contained in this Agreement or in any other instrument referred to herein,
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, then to the maximum extent permitted by Legal Requirements, such
invalidity, illegality or unenforceability shall not affect any other provision
of this Agreement or any other such instrument. Furthermore, in lieu of any such
invalid or unenforceable term or provision, the parties hereto intend that there
shall be added as a part of this Agreement a provision as similar in terms to
such invalid or unenforceable provision as may be possible and be valid and
enforceable.

 

Section 3.11. Guarantee. Parent hereby guarantees the performance of each of the
obligations (financial or otherwise) of Parent OP under this Agreement,
including any obligation which by its terms contemplates performance after the
Effective Time and Parent OP’s obligations in respect of a conversion or
redemption of Parent OP Units pursuant to the Class D Amendment.

 

Section 3.12. Specific Performance. Without limiting or waiving in any respect
any rights or remedies of any of the parties hereto under this Agreement now or
hereinafter existing at law or in equity or by statute, each of the parties
hereto shall be entitled to seek specific performance of the obligations to be
performed by the other in accordance with the provisions of this Agreement.

 

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[Signature Pages Follow]

 

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IN WITNESS WHEREOF, each of Parent and Parent OP has caused this Agreement to be
executed by its officers thereunto duly authorized and Holder has caused this
Agreement to be duly executed by an authorized signatory, all as of the date
first written above.

 

VENTAS, INC.

By:  

/s/ T. Richard Riney

   

Name:

 

T. Richard Riney

   

Title:

 

Executive Vice President

ELDERTRUST OPERATING LIMITED PARTNERSHIP By:  

ELDERTRUST, its general partner

By:  

/s/ T. Richard Riney

   

Name:

 

T. Richard Riney

   

Title:

 

Trustee & Secretary

 

[Parent and Parent OP Signature Page; Holder Signature Page Follows]

 

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HOLDER

By:  

/s/ Darryl W. Copeland, Jr.

Name:

 

Darryl W. Copeland, Jr.

 

Dated: April 12, 2005

 

Print Name of Holder: Darryl W. Copeland, Jr. Address of Holder:
_________________ _________________ fax:   __________________ LTIP Units
beneficially owned: 130,000 LTIP Units

 

[Holder Signature Page]