EXHIBIT 10.9
October 3, 1997
Assisted Living Concepts, Inc.
9955 S. E. Washington, Suite 201
Portland, OR 97216
Attention: Ms. Keren Brown Wilson, Chief Executive Officer
RE: AGREEMENT TO PURCHASE AND LEASE ASSISTED LIVING RESIDENCES
Dear Ms. Wilson:
LTC Properties, Inc. ("LTC") is pleased to advise you that LTC agrees,
either itself or through its subsidiary or affiliate, and subject to the
parameters outlined in this letter, to enter into sale/leaseback transactions
with Assisted Living Concepts, Inc. ("ALC") with respect to certain properties
(each individually a "Property" and collectively, the "Properties") improved
with assisted living facilities (each a "Facility" and collectively, the
"Facilities"), which Properties and Facilities are located in those cities and
states more particularly set forth in Exhibit "A" attached hereto and made a
part hereof.
As we have previously discussed, ALC will sell and assign all of its right,
title and interest in and to all real and personal property and fixtures
comprising the Properties to LTC, and LTC or its designee will purchase the
Properties from ALC and will lease the Properties back to ALC, all upon the
following terms and conditions:
1. PURCHASE PRICE. With respect to the purchase of each individual
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Property, LTC shall pay ALC a purchase price (the "Specific Property Purchase
Price") equal to the lesser of (i) ALC's total hard and soft construction costs
in connection with the construction of the Facility on the Property, but in no
event exceeding Seventy Thousand Dollars ($70,000.00) (except for any Property
located in the State of New Jersey, in which case the figure shall be Seventy-
Five Thousand Dollars ($75,000.00)) per assisted living unit in the Facility
constructed on the Property, or (ii) the amount set forth as the purchase price
on Exhibit "A" attached hereto corresponding to the applicable Property which
amount in each case is EXCLUSIVE of the Specific Property Purchase Price
(defined above); provided, however, that in no event shall the total, cumulative
purchase price for all of the Properties be greater than Twenty Million Four
Hundred Forty Thousand Dollars ($20,440,000.00) EXCLUSIVE of the Specific
Property Purchase Price (definedabove) (the "Total Purchase Price"). The
Specific Property Purchase Price shall be paid in all cash at Closing with
respect to each Property.
Ms. Keren Brown Wilson
Assited Living Concepts, Inc.
October 3, 1997
Page 2
In addition to the Specific Property Purchase Price with respect to a
Property, at ALC's option, LTC shall be obligated to pay to ALC, or its
designee, for each Facility on a Property, up to One Hundred Fifty Thousand
Dollars ($150,000.00) of losses incurred by ALC in the stabilization period of
the Facility incurred either (i) by ALC, or (ii) by a third party pursuant to a
participation or other agreement with ALC (the "Stabilization Period Losses").
LTC shall be obligated to pay to ALC, or its designee, the Stabilization Period
Losses at Closing with respect to each Property if the amount of the
Stabilization Period Losses is ascertainable at such time. To the extent that
the amount of the Stabilization Period Losses is not ascertainable at the time
of LTC's purchase of a Property, LTC shall remain obligated to pay to ALC, or
its designee, the Stabilization Period Losses at such time as the amount of the
Stabilization Period Losses becomes ascertainable; provided, further, that as a
pre-condition to LTC's obligation to disburse any such amount to ALC, or its
designee, LTC shall cause to be prepared at ALC's expense, and ALC shall
execute, an amendment to its lease (a) increasing the initial annual minimum
rental amount thereunder by an amount equal to of the sum of the Stabilization
Period Losses multiplied by the then applicable lease rate, and (b) to the
extent payment of the Stabilization Period Losses is made to ALC's designee,
acknowledging the benefit ALC has received in consideration of such rental
increase.
2. CONTINGENCIES.
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(a) LTC's obligation to purchase the Properties and to consummate the
transactions contemplated in this commitment letter shall be expressly
contingent upon each of the following:
(i) LTC shall have approved the marketing study and feasibility
report prepared by Concepts in Community Living, Inc. ("CCL"), or
another consultant entirely acceptable to LTC, on behalf of ALC
with respect to each of the Properties;
(ii) the state of title to each of the Properties must be
acceptable to LTC in LTC's reasonable discretion, and LTC shall
have received an ALTA Owner's Policy of Title Insurance -
Extended Coverage - for each Property issued by Chicago Title
Insurance Company showing the fee interest in each Property
vested in LTC subject only to those exceptions specifically
agreed to in writing by LTC, and containing those endorsements
reasonably required by LTC;
(iii) LTC shall have received an ALTA/ACSM Land Title Survey of
the applicable Property and the improvements located thereon
prepared by a registered professional land surveyor satisfactory
to LTC in the reasonable exercise of LTC's discretion and
certified, as of date not earlier
Ms. Keren Brown Wilson
Assited Living Concepts, Inc.
October 3, 1997
Page 3
than 120 days prior to the closing date, to LTC, Chicago Title
Insurance Company and any other party reasonable designated by
LTC with the signature and seal of the surveyor and the following
language:
"This is to certify that this map or plat and the survey on which
it is based were made (i) in accordance with "Minimum Standard
Detail Requirements for ALTA/ACSM Land Title Surveys," jointly
established and adopted by ALTA and ACSM in 1992, and includes
Item Nos. 1-3, 6 (setback only) and 8-11 in Table A thereof; and
(ii) pursuant to the Accuracy Standards (as adopted by ALTA and
ACSM and in effect on the date of this certification) of an Urban
Survey."
The survey shall show all easements, encroachments, building
restriction lines, set backs and other similar matters affecting
and/or apparent on the Property and the relation of the Property
to public thoroughfares for access purposes. The survey shall
also certify that the Property is or is not in a flood hazard
area for purposes of the national Flood Insurance Program, and if
so, shall specify the flood zone designation assigned to the
Property; provided, however, that if ALC's surveyor for any
reason cannot or will not provide such flood zone information,
ALC shall be entitled to, and shall, provide such information to
LTC from another source acceptable to LTC in the reasonable
exercise of LTC's discretion . The survey shall be dated on or
after substantial completion of the construction of the Facility
on each Property. In addition, the record legal description of
each Property must appear on the survey of that Property, and any
record easements or servitudes and covenants affecting each
Property which are capable of being plotted must be plotted
thereon;
(iv) LTC shall have received a Phase I environmental assessment
of each of the Properties in form and content, and performed by
an environmental consultant, entirely acceptable to LTC in LTC's
reasonable discretion;
(v) LTC shall have received UCC lien, tax lien and judgment lien
searches dated after the date of substantial completion of the
Facility on each Property evidencing that no liens exist as to
the personal property located on each Property other than those
liens previously approved in writing by LTC;
Ms. Keren Brown Wilson
Assited Living Concepts, Inc.
October 3, 1997
Page 4
(vi) LTC shall be satisfied with the physical condition of the
Facilities located on the Properties based on a physical
inspection of each Property by LTC;
(vii) LTC shall have received evidence acceptable to LTC that
each of the Properties is properly zoned for use as an assisted
living facility;
(viii) LTC shall have received a corporate resolution of ALC's
board of directors authorizing ALC to enter into, deliver and
perform all of the documents and instruments necessary to effect
the sale/leaseback transactions contemplated in this commitment
letter;
(ix) LTC shall have received a copy of the certificate of
occupancy with respect to each Property and a copy of ALC's
license to operate the Facility located on each Property as a
fully-licensed assisted living facility in the state in which the
Facility is located, and having not less than the number of units
in each Facility specified for each Property on Exhibit "A"
hereof;
(x) ALC shall have obtained all approvals and consents
required to enable ALC to consummate the sale/leaseback
transaction with respect to each Property without breaching or
defaulting under any contracts, agreements or other documents or
instruments by which ALC is bound; and
(xi) LTC, at its option, shall have conducted with respect to
each Property, and be satisfied with the results of, such other
standard due diligence as is customarily performed by LTC in
connection with the acquisition of a fee interest in a property
improved with an assisted living facility.
3. TERM; CROSS-DEFAULTING. Each lease shall have an initial
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term of twelve (12) years. ALC and LTC contemplate that LTC will acquire the
Properties, and lease them back to ALC, its subsidiary or affiliate, at such
time as the construction of the Facility on each Property is completed, the
certificate of occupancy and operator's license with respect thereto issued and
all other pre-conditions to Closing have been met with respect to each Property.
As a result, the parties anticipate that the Properties will not all be acquired
by LTC at one time, and ALC's obligation to pay Minimum Rent and other charges
under each lease will commence concurrently with LTC's acquisition of the
Property to which the lease relates. The lease with respect to each Property
shall group the Property with three (3) other properties owned (or to be owned)
by LTC
Ms. Keren Brown Wilson
Assited Living Concepts, Inc.
October 3, 1997
Page 5
and leased (or to be leased) to ALC, its subsidiary or affiliate, each such
group of four (4) or more Properties hereinafter being referred to as a
"Package," and all of the Properties to be included in a Package shall be
identified to LTC by not later than the date of the closing of the first
Property in the Package to be acquired by LTC; provided, however, that if ALC
has not identified the Properties in each Package to LTC by such time, LTC shall
have the right, but not the obligation, then or at any time thereafter, to
determine which Properties shall be included within the Package selecting only
from Properties set forth on Exhibit "A" hereof.
ALC shall have two consecutive five-year options to extend the term of
all of the leases within each Package; that is, ALC shall only have the option
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to extend the term of any of the leases in a Package so long as ALC exercises
its option to extend the term of all of the leases in a Package. In addition,
the leases for all of the Properties in each Package shall be co-terminus with
all of the other leases in that Package, but will not be co-terminus with the
leases in the other Packages. Notwithstanding the foregoing, the leases for
each of the Properties shall be cross-defaulted with (i) each lease for each of
the other Properties (irrespective of which Package the Properties are in), and
(ii) every other lease between LTC and ALC (including without limitation any
leases between LTC, on the one hand, and Home and Community Care, Inc. and/or
Carriage House Assisted Living, Inc., on the other hand, if and when either of
said entities (or the assets thereof) is acquired by ALC) with respect to any
Facility, except for those five (5) leases relating to those certain five (5)
assisted living properties in the State of Washington commonly known as:
Chenoweth House, Kennewick, WA; Pioneer House, Walla Walla, WA; Orchard House,
Grandview, WA; Lexington House, Vancouver, WA: and Mountain View House, Camas,
WA. In addition to the foregoing, if a default is declared and not cured within
thirty (30) days on any of ALC's major (that is, $5,000,000 or more) loans or
lines of credit, or if such loan or line of credit is accelerated or the lender
thereunder takes any action to enforce the same, then LTC shall have the right,
but not the obligation, also to declare a default under each of the leases
entered into hereunder.
4. MINIMUM RENT. The initial annual Minimum Rent for the first
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year of each lease shall be an amount equal to the sum of the Specific Property
Purchase Price and the Stabilization Period Losses (to the extent then
ascertainable) paid by LTC (or its designee) for each Property multiplied by
nine and ninety-five hundredths percent (9.95%). ALC shall pay an amount equal
to one-twelfth (1/12) of the annual Minimum Rent applicable to each Property on
the first day of each and every month during the term of the leases without
demand, abatement (except as specifically set forth in the leases with respect
to a partial condemnation of a Property), set-off or notice. Commencing on the
first anniversary of the rent commencement date for each lease (the "Anniversary
Date"), and continuing thereafter on each subsequent Anniversary Date during the
initial term and each option term of each lease, the Minimum Rent applicable to
each lease shall be increased in accordance with the terms and provisions
attached hereto as Exhibit "B."
Ms. Keren Brown Wilson
Assited Living Concepts, Inc.
October 3, 1997
Page 6
5. RENT DURING OPTION PERIODS. The initial Minimum Rent for the first
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of the option terms for each lease shall be the higher of: (i) the previous
year's Minimum Rent amount increased in accordance with the terms and provisions
attached hereto as Exhibit "B"; or (ii) an amount equal to the initial Minimum
Rent payable in the first twelve (12) months of the initial term of the lease
adjusted by the cumulative increase in the Consumer Price Index, U.S. Cities
Average, All Items (1982-84=100) published by the United States Department of
Labor, Bureau of Labor Statistics in accordance with the manner presently
calculated (the "CPI") from the commencement date of the applicable lease to the
date on which the new Minimum Rent is being determined. The initial Minimum Rent
for the second of the option terms for each lease shall be the higher of: (i)
the previous year's Minimum Rent amount increased in accordance with the terms
and provisions attached hereto as Exhibit "B"; (ii) an amount equal to the
initial Minimum Rent payable in the first twelve (12) months of the first option
term of the lease adjusted by the cumulative increase in the CPI from the
commencement date of the applicable lease to the date on which the new Minimum
Rent is being determined; or (iii) the fair market value rent as determined by
an independent appraisal process.
6. TRIPLE NET LEASE. ALC shall be responsible for all costs
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associated with the operation of the Facilities located on the Properties,
including, but not limited to, property and other taxes, utilities, insurance
premiums and costs to maintain the Facilities in good condition and repair,
reasonable wear and tear excepted (collectively "Additional Charges"). Taxes
shall include any and all taxes of any kind associated with the real or personal
property constituting the Facilities, including, but not limited to, taxes
attributable to any period prior to acquisition of the Properties by LTC (or its
designee) with the exception of any transfer taxes owing in connection with any
subsequent transfer of any of the Properties by LTC to a third party.
7. REPAIR AND MAINTENANCE. ALC shall be responsible for completing
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any and all work necessary to maintain each Facility located on the Properties
as an assisted living residence in good condition and repair, reasonable wear
and tear excepted. In addition, at ALC's sole cost and expense, ALC shall
complete all applications, give all notices and obtain and maintain all
licenses, permits and approvals necessary or desirable to allow ALC to operate
the Facilities located on the Properties in accordance with all legal and
regulatory requirements.
8. CLOSING. Closing with respect to both Packages of the Properties
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shall occur not later than December 31, 1997. The Closing with respect to each
Property shall be deemed to have occurred upon recordation of the Warranty Deed
conveying the Property to LTC, payment of the Specific Property Purchase Price
and the Stabilization Period Losses (to the extent then ascertainable) with
respect thereto, and full execution and delivery of the lease between LTC and
ALC with respect thereto.
9. INDEMNITY. The lease with respect to each Property shall provide
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that ALC shall fully indemnify, defend, protect and hold LTC harmless from and
against any and all costs,
Ms. Keren Brown Wilson
Assisted Living Concepts, Inc.
October 3, 1997
Page 7
losses, expenses, judgments, claims, fees (including reasonable attorneys' fees
and costs) or damages of any kind or nature whatsoever arising from or relating
to the Facilities located on the Properties and the operation thereof,
including, but not limited to, all matters relating to (i) the presence of
hazardous substances located on the Properties, (ii) compliance with or failure
to comply with the provisions of the federal Americans with Disabilities Act,
(iii) compliance with or failure to comply with the provisions of the Fair
Housing Amendments Act of 1988; (iv) compliance with or failure to comply with
the provisions of Section 8 of the United States Housing Act of 1937, as
amended, and any and all other matters whatsoever relating to the Properties,
the Facilities located thereon and the operation thereof.
10. ASSIGNMENT AND SUBLETTING. ALC shall not be entitled to sublet any
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portion of any of the Properties, or assign any one or more of the leases,
without the prior written consent of LTC, which consent shall not be given by
LTC unless in connection with the subletting and/or assignment, ALC will remain
primarily liable for all obligations under the applicable lease or leases.
Notwithstanding the foregoing provisions of this Paragraph 10, ALC shall be
entitled, at any time without first obtaining the consent of LTC, to (i) assign
any one or more of the leases to a wholly-owned subsidiary of ALC so long as
ALC, concurrently with such assignment, delivers to LTC a first-loss full
guaranty of such subsidiary's obligations under the assigned lease(s) in form
and substance acceptable to LTC in LTC's reasonable discretion, and (ii)
sublease up to the greater of (A) 2,000 square feet, or (B) ten percent (10%) of
the total square footage of the applicable Facility in any one or more of the
Facilities located on the Properties to, any person or entity providing any
services related or ancillary to the operation of the Facilities, or in
connection with the provision of home health services both within and outside
the Facilities.
11. CLOSING COSTS. Concurrently with the Closing of LTC's purchase of
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each of the Properties, ALC shall pay out of the proceeds of the Closing any
and all Closing costs in connection with the Closing, including but not limited
to all of LTC's attorneys' fees (which shall be Four Thousand Seven Hundred
Fifty Dollars ($4,750.00) for each of the Properties) plus attorneys' expenses,
recording fees, title fees, state and local transfer, mortgage or excise taxes
in connection with the transfer of title, LTC's out-of-pocket costs in
connection with the transaction and any and all other fees and costs in any way
associated with LTC's purchase of the fee interest in each Property and the
leases between LTC and ALC with respect to the Properties. Upon ALC's request,
LTC shall instruct its attorneys to prepare closing binders for ALC and its
counsel with respect to each sale/leaseback transaction, and ALC shall be
responsible for paying the actual cost of producing and shipping said closing
binders.
12. PHYSICAL INSPECTION. As a precondition to LTC's obligations under
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this commitment letter to acquire the Properties, LTC shall have the right to
conduct a physical inspection of each Facility on each Property, and LTC must be
satisfied with the physical condition of each of the Properties after completion
of the construction of the Facilities thereon, in LTC's reasonable discretion.
Ms. Keren Brown Wilson
Assisted Living Concepts, Inc.
October 3, 1997
Page 8
13. GOVERNING LAW. This commitment letter shall be governed by and
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interpreted under the internal laws of the State of California without resort to
choice of law principles.
14. COMMITMENT FEE. Upon acceptance of this commitment, ALC shall pay to
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LTC a commitment fee relating to the transactions contemplated herein in an
amount equal to one percent (1.0%) of the Total Purchase Price, that is, the sum
of Two Hundred Four Thousand Four Hundred Dollars ($204,400.00) (the "Commitment
Fee"). The Commitment Fee shall be paid to LTC as follows: concurrently with the
full execution of this commitment letter, ALC shall deliver to LTC a promissory
note in the original principal amount of Two Hundred Four Thousand Four Hundred
Dollars ($204,400.00) made by, and with full recourse to, ALC and payable to LTC
(the "Commitment Fee Note"). The Commitment Fee Note shall bear no interest
(except in the event of a default thereunder beyond applicable cure periods) and
shall have a maturity date of January 1,, 1998. A portion of the Commitment Fee
equal to one percent (1%) of the Specific Property Purchase Price for each
Property approved by LTC shall be refundable to ALC on the date on which the
applicable sale/leaseback transaction closes. Accordingly, on the date of each
such closing, the amount owing by ALC under the Commitment Fee Note shall be
reduced by an amount equal to one percent (1%) of the applicable Specific
Property Purchase Price. So long as on or before December 31, 1997 LTC and ALC
have closed sale/leaseback transactions hereunder such that the combined
Specific Property Purchase Prices of all such Properties is equal or greater
than Twenty Million Four Hundred Forty Thousand Dollars ($20,440,000.00), then
the Commitment Fee will be fully refunded to ALC, and LTC shall return the
original Commitment Fee Note to ALC marked "canceled."
SINCE IT WOULD BE IMPRACTICAL AND EXTREMELY DIFFICULT TO FIX THE ACTUAL
DAMAGES WHICH WOULD BE SUFFERED BY LTC IN THE EVENT ALC DEFAULTS UNDER THE TERMS
OF THIS COMMITMENT LETTER AND AS A RESULT OF SAID DEFAULT FAILS TO CLOSE THE
OVERALL TRANSACTIONS CONTEMPLATED IN THIS COMMITMENT LETTER BY DECEMBER 31,
1997, AND SO LONG AS LTC IS NOT ALSO IN DEFAULT OF THIS COMMITMENT LETTER AS A
RESULT OF WHICH DEFAULT LTC HAS FAILED TO CLOSE ALL OR ANY PORTION OF THE
TRANSACTIONS CONTEMPLATED HEREIN, THEN IN SUCH EVENT, LTC SHALL BE ENTITLED TO
ENFORCE THE COMMITMENT FEE NOTE IN SUCH AMOUNTS AS HAVE NOT PREVIOUSLY BEEN
REFUNDED, AND TO RETAIN THE AMOUNT COLLECTED AS LIQUIDATED DAMAGES FOR THE TIME,
EFFORT AND EXPENSES INCURRED BY LTC IN CONNECTION WITH THE OVERALL TRANSACTIONS
CONTEMPLATED HEREIN, AND ALC SHALL ALSO BE OBLIGATED TO PAY LTC'S LEGAL FEES AND
EXPENSES, TO THE EXTENT NOT PREVIOUSLY PAID, IN CONNECTION WITH THE TRANSACTIONS
OF UP TO FOUR THOUSAND SEVEN HUNDRED FIFTY DOLLARS ($4,750.00) FOR EACH OVERALL
TRANSACTION WITH
Ms. Keren Brown Wilson
Assisted Living Concepts, Inc.
October 3, 1997
Page 9
RESPECT TO EACH PROPERTY ON WHICH LTC HAS COMMENCED ANY LEGAL WORK. ONCE LTC HAS
RECEIVED PAYMENT IN FULL OF ALL AMOUNTS REQUIRED TO BE PAID PURSUANT TO THIS
PARAGRAPH 14 AND UNDER THE COMMITMENT FEE NOTE, THEN THE PARTIES TO THIS
COMMITMENT THEREAFTER SHALL HAVE NO FURTHER RIGHTS OR OBLIGATIONS TO ONE ANOTHER
HEREUNDER OF ANY KIND OR NATURE WHATSOEVER.
IN THE EVENT THAT LTC FAILS TO CLOSE THE TRANSACTIONS CONTEMPLATED IN THIS
COMMITMENT LETTER UPON TERMS CONSISTENT WITH THOSE PROVIDED HEREIN, AS A SOLE
RESULT OF LTC'S BREACH OF ITS OBLIGATIONS HEREUNDER, THE SOLE OBLIGATION OF LTC
SHALL BE TO RETURN THE ORIGINAL COMMITMENT FEE NOTE TO ALC, AND THE PARTIES
HERETO SHALL THEREAFTER HAVE NO FURTHER OBLIGATIONS OR LIABILITIES TO ONE
ANOTHER OF ANY KIND OR NATURE WHATSOEVER.
Initials: LTC Properties, Inc. ______ Assisted Living Concepts,
Inc. ______
15. ALC'S ACCEPTANCE. ALC must indicate its acceptance of the terms and
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conditions of this commitment by affixing its signature below. Unless LTC
receives this accepted commitment in its Oxnard, California office on or prior
to the fifth (5th) business day following the date of this letter, the terms
hereof shall be null and void, and LTC shall not have any obligations or
liabilities to ALC of any kind or nature whatsoever. This commitment shall
become effective only upon acceptance by LTC evidenced by the affixation of
LTC's signature hereto.
16. FACSIMILE EXECUTION BINDING. The parties hereto specifically agree
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that this commitment letter may be executed by facsimile, and that facsimile
signatures hereon shall be binding on the parties hereto as though they were
original signatures.
17. FINAL AND ENTIRE AGREEMENT. This commitment letter and the exhibits
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attached hereto represent the final and entire agreement between the parties in
connection with the transaction contemplated hereby and the subject matter
hereof. This commitment letter and the exhibits attached hereto supersede and
replace all prior and contemporaneous agreements, understandings and
communications between the parties, whether oral or written, with regard to the
subject matter hereof. There are no oral or written agreements, representations
or inducements of any kind existing between the parties relating to the
transactions contemplated in this commitment letter which are not expressly set
forth herein. This commitment letter may not be modified except by a written
agreement signed by LTC's Chief Executive Officer and ALC.
18. BINDING EFFECT. This commitment letter shall be binding upon and
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shall inure to the benefit of the parties hereto and their respective successors
and assigns; provided, however,
Ms. Keren Brown Wilson
Assisted Living Concepts, Inc.
October 3, 1997
Page 10
that ALC shall not have the right to assign this commitment letter to any other
person or entity without the prior written consent of LTC, which consent may be
given or withheld by LTC in its sole discretion; further provided, however, that
notwithstanding the foregoing, in the event that ALC wishes to assign this
commitment letter to a wholly-owned subsidiary of ALC having a tangible net
worth in excess of $10,000,000 and a debt to equity ratio of no greater than
2.00 to 1.00 and so long as ALC concurrently guaranties payment of the
Commitment Fee Note to LTC, then ALC shall have the right to do so without
having first obtained LTC's consent thereto.
19. WAIVER. No waiver by any party at any time of any breach of any
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provision of this commitment letter shall be deemed a waiver of a breach of any
other provision herein or a consent to any subsequent breach of the same or
another provision. If any action by any party shall require the consent or
approval of the other party, such consent or approval of such action on any one
occasion shall not be deemed a consent to or approval of such action on any
subsequent occasion or a consent to or approval of any other action.
20. CAPTIONS AND HEADINGS. The captions and paragraph numbers appearing
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in this commitment letter are for convenience and ease of reference only, and do
not define, limit, construe or describe the scope or intent of this commitment
letter.
21. COUNTERPART EXECUTION. This commitment letter may be executed in
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counterparts, each of which shall be considered an original and all of which
taken together shall constitute one and the same instrument.
22. ATTORNEYS' FEES. If either party to this commitment letter brings an
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action or proceeding to enforce the terms hereof or declare rights hereunder,
the prevailing party in any such action or proceeding, on trial or appeal, shall
be entitled to its reasonable attorneys' fees to be paid by the losing party as
fixed by the court of jurisdiction.
23. TIME OF ESSENCE. Time is of the essence with respect to all matters
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contained in this commitment letter.
24. DRAFTING OF AGREEMENT. The parties to this commitment letter
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acknowledge that this commitment letter has been negotiated at arms length, that
each party has been represented by independent counsel and that this commitment
letter has been drafted by both parties and no one party shall be construed as
the draftsperson.
25. SURVIVAL. This commitment letter shall survive, and the covenants,
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conditions and terms set forth herein shall continue, until the earlier of (i)
December 31, 1997, at which time this commitment letter shall immediately and
automatically expire, or (ii) the date on which the sale of all of the
Properties from ALC to LTC and the leases of all of the Properties from LTC to
ALC have been consummated.
Ms. Keren Brown Wilson
Assisted Living Concepts, Inc.
October 3, 1997
Page 11
Please understand that, subject to the contingencies set forth above, this
letter constitutes the commitment of ALC and LTC to enter into the
sale/leaseback transactions described herein on the terms set forth above.
Very truly yours,
LTC PROPERTIES, INC.,
a Maryland corporation
/s/Andre C. Dimitriadis
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ANDRE C. DIMITRIADIS,
Chairman and Chief Executive Officer
READ AND AGREED:
ASSISTED LIVING CONCEPTS, INC.,
a Nevada corporation
By: /s/Stephen Gordon
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Its: Chief Financial Officer
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