ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
Sale of Summer Vista and Riverview Properties
On January 24, 2020, CHP II Riverview FL Owner, LLC, a Delaware limited liability company, CHP II Riverview FL Tenant, LLC, a Delaware limited liability company, CHP II Summer Vista FL Owner, LLC, a Delaware limited liability company and CHP II Summer Vista FL Tenant, LLC, a Delaware limited liability company (collectively, the “Sellers”), each an operating subsidiary of CNL Healthcare Properties II, Inc. (the “Company”), entered into a Purchase and Sale Agreement and Joint Escrow Instructions (the “Purchase and Sale Agreement”) with WP CrossingsSR-FL Owner, LLC and WP SummerVistaSR-FL Owner, LLC, each a Delaware limited liability company and affiliate of Waypoint Residential, LLC (collectively the “Buyer”), for the sale of the Company’s two remaining senior assisted living facility properties (the “Properties”) for approximately $48,850,000 in cash, subject to certainpro-rations and other adjustments as described in the Purchase and Sale Agreement (the “Purchase Price”). The Company’s board of directors (the “Board”) has unanimously approved the Company entering into the Purchase and Sale Agreement.
In connection with the Purchase and Sale Agreement, the Buyer shall deposit $500,000 in cash into escrow as a deposit (the “Deposit”), to be held in escrow until the consummation of the transactions contemplated by the Purchase and Sale Agreement or until the termination thereof and to be applied against the Purchase Price or delivered to the parties, respectively, as provided in the Purchase and Sale Agreement. The Purchase and Sale Agreement provides that the Purchaser had until January 24, 2020 to undertake an inspection of the Properties (the “Inspection Period”). In the event the Purchase and Sale Agreement is terminated due to a default by the Buyer, the Sellers shall be entitled to retain the Deposit. In the event that the Purchase and Sale Agreement is terminated due to (i) the failure of the Sellers to cure any of the Buyer’s objections to a title survey on each property within three business days, (ii) the termination of the Purchase and Sale Agreement by the Buyer for failing to meet their conditions precedent, (iii) major damage to a property, (iv) the condemnation of a property by a governmental authority or (v) a default by the Sellers, the Buyer shall be entitled to a return of the Deposit and reimbursement of actual expenses in an amount not to exceed $350,000.
The Purchase and Sale Agreement contains customary representations and warranties of the Company and the Buyer, as well as customary covenants of the Company and the Buyer. An indemnification of the representations and warranties of the Company will survive closing for a period of six months and will be guaranteed by CNL Holdings, LLC, an affiliate of the Company’s sponsor. Additionally, the closing of the sale of the Properties is subject to the satisfaction or waiver of customary closing conditions set forth in the Purchase and Sale Agreement. The parties anticipate that the closing of the sale of the Properties will occur in February 2020, although there can be no assurance that the closing conditions will be satisfied or that the sale of the Properties will be consummated.
The foregoing description of the Purchase and Sale Agreement does not purport to be a complete description of the rights and obligations of the parties thereunder and is qualified in its entirety by reference to the full text of the Purchase and Sale Agreement that will be filed with the Securities and Exchange Commission (“SEC”) as an exhibit to the Company’s next periodic report.
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 harbor created by Section 21E of the Exchange Act. Forward-looking statements are statements that do not relate strictly to historical or current facts, but reflect management’s current understandings, intentions, beliefs, plans, expectations, assumptions and/or predictions regarding the future of the Company’s 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 the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, actual results could differ materially from those set forth in the forward-looking statements due to a variety of risks, uncertainties and other factors. Such factors include, but are not limited to, the satisfaction or waiver of other conditions in the Purchase and Sale Agreement; the risk that the Sale or the other
