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Exhibit 10.3
SECOND AMENDMENT TO PURCHASE AND SALE AGREEMENT
This Second Amendment to Purchase and Sale Agreement ("Second Amendment") amends
that certain Purchase and Sale Agreement (the "Agreement") by and between 270
Center Associates, Limited Partnership, a California limited partnership
("Seller"), and ARV Assisted Living, Inc., a California corporation ("Buyer"),
dated as of February 12, 1998, and amended as of March 2, 1998. All capitalized
terms not defined herein shall have the same definition as in the Agreement.
1. Section 1.2 of the Agreement is amended to delete therefrom Exhibit E,
Allocation of Purchase Price, and to add thereto the new Exhibit E,
Amended Allocation of Purchase Price, attached hereto. In addition, the
first sentence of Section 1.2 is hereby amended to delete "$49,200,000"
and to substitute "$45,200,000" therefor.
2. Section 1.3.2 is hereby amended to delete therefrom the first sentence and
to add thereto the following sentence:
Prior to the Initial Closing (defined in Section 2.3 below), Buyer
shall deposit into Escrow sufficient funds to fund the Purchase Price
allocated to the "Initial Closing Properties" on Exhibit E, and shall
deposit into the Second Escrow (as defined below) $17.7 million (the
"Second Deposit") to be retained as liquidated damages under Section 8.3
below, subject to adjustment by reason of any applicable prorations and
the allocation of closing costs described below.
3. The following is hereby added to the end of Section 1.3.2:
Interest on the Second Deposit shall accrue to the benefit of Seller. All
net income for the period from and including April 16, 1998 to the B/R Closing
(defined in Section 2.3 below) from Rossmore and The Berkshire shall be held by
Seller for the benefit of Buyer and shall be paid to Buyer after offsetting
therefrom certain management fees payable by Buyer to Seller under Section 5.10
of the Hillsdale Agreement, as amended.
4. Section 2.2 is amended to delete the last sentence thereof.
5. Section 2.3 of the Agreement is hereby amended to state as follows:
The Closing shall occur (and Escrow shall close) as follows:
(a) on May 4, 1998, for The Berkshire Property and the Rossmore
Property (the "B/R Closing"); and
(b) on April 16, 1998 for the remaining Property (the "Initial
Closing").
Notwithstanding the foregoing, no Closing shall occur unless and until the
Initial Closing occurs.
As used in this Agreement, unless specifically provided otherwise,
"Closing" shall mean the Initial or the B/R Closing, as the context
requires, and "Closing Date" shall mean the date of such applicable
Closing.
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6. The following paragraph shall be added to the end of Section 4.4:
Notwithstanding the foregoing, in the event that, after the Initial
Closing but prior to any other Closing, any portion of any remaining
Property shall be condemned or becomes the subject of any pending or
threatened condemnation action, Seller shall promptly notify Buyer
thereof, this Agreement shall remain in full force, and Buyer shall be
deemed to have elected pursuant to the provisions of this Section 5.2 not
to terminate this Agreement as to such Property.
7. The following paragraph shall be added to the end of Section 4.5:
Notwithstanding the foregoing, in the event of any damage to or
destruction to any un-purchased Property after the Initial Closing but
prior to any other Closing, Seller shall promptly notify Buyer thereof,
this Agreement shall remain in full force, and Buyer shall be deemed to
have elected pursuant to the provisions of this Section 5.2 not to
terminate this Agreement as to such Property.
8. Article 6 shall be amended to that the references therein to the "Closing"
or "Closing Date" shall read "Initial Closing" and "Initial Closing Date."
9. Section 8.1.1 shall be amended to delete therefrom the date "April 30,
1998" and to add thereto the date "June 1, 1998."
10. Notwithstanding anything to the contrary in this Agreement, the
determinations under Section 8.1.2 shall be made as if Seller's interest
in all of the Properties were to be sold to Buyer on the Initial Closing
Date. The provisions of Section 8.1 shall not apply to any Closing
thereafter, and Buyer shall be deemed to have elected to acquire the
remaining Properties in all circumstances.
11. Section 8.2 shall be amended to insert after the phrase "Notwithstanding
anything to the contrary," the words "prior to the Initial Closing."
12. A new Section 8.3 shall be added as follows:
8.3 Buyer's Breach at a Subsequent Closing. IN THE EVENT THAT FOLLOWING
THE INITIAL CLOSING DATE BUYER BREACHES ITS OBLIGATION TO ACQUIRE EACH
REMAINING PROPERTY HEREUNDER AT ITS SPECIFIED CLOSING DATE, THEN THE
ESCROW AGENT SHALL PAY TO SELLER FROM THE SECOND DEPOSIT, AS APPLICABLE,
THE ALLOCATED PURCHASE PRICE OF SUCH PROPERTY, AS SHOWN ON EXHIBIT E,
TOGETHER WITH ACCRUED INTEREST THEREON, WHICH AMOUNT(S) SHALL BE RETAINED
BY SELLER AS LIQUIDATED DAMAGES, AND NOT AS A PENALTY, TOGETHER WITH
REASONABLE FEES AND DISBURSEMENTS OF ATTORNEYS INCURRED BY SELLER IN
ENFORCING THIS SECTION 8.2, AND THE COLLECTION OF SUCH AMOUNT SHALL BE IN
LIEU OF ANY AND ALL OTHER REMEDIES WHICH ARE OR MAY BE AVAILABLE TO SELLER
AT LAW OR IN EQUITY.
INITIAL: /s/ MHS___ INITIAL: /s/ SMM__
13. This Second Amendment may be executed in counterparts, each of which shall
be deemed an original, but all of which, taken together, shall constitute
one and the same instrument.
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14. Except as amended herein, the Agreement shall remain in full force and
effect.
IN WITNESS WHEREOF, the parties have executed this Second Amendment
effective as of the 10th day of April, 1998.
"SELLER" 270 Center Associates, Limited Partnership
a California limited partnership
By: Fremont Properties, Inc., general partner
By: /s/ Mark H. Simpson
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Its: President
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"BUYER" ARV Assisted Living, Inc.
a California corporation
By: /s/ Sheila M. Muldoon
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Sheila M. Muldoon, Senior Vice President
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