FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT
THIS FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT (this "Amendment")
is executed as of the 7th day of April, 1994, by HMH PROPERTIES, INC., a
Delaware corporation with its principal office at 10400 Fernwood Road,
Bethesda, Maryland 20817 ("HMH Properties"), and HMC RETIREMENT PROPERTIES,
INC., a Delaware corporation with its principal office at 10400 Fernwood
Road, Bethesda, Maryland 20817 ("HMC Retirement"), as sellers (collectively,
"Sellers" and each individually a "Seller"), and HEALTH AND REHABILITATION
PROPERTIES TRUST, a Maryland real estate investment trust with its principal
office at 400 Centre Street, Newton, Massachusetts 02158 ("Purchaser").
W I T N E S S E T H
WHEREAS, Purchaser and Sellers entered into that certain Purchase and
Sale Agreement, effective as of March 17, 1994 (the "Contract") regarding the
purchase of the Facilities (as defined in the Contract).
WHEREAS, Purchaser and Sellers desire to amend the Contract to correct
or clarify certain matters.
NOW, THEREFORE, in consideration of the foregoing premises, the mutual
covenants set forth herein and other good and valuable consideration the
receipt and sufficiency of which is hereby acknowledged, Purchaser and
Sellers hereby agree that the Contract is hereby amended as follows:
1. Page 28 of the Contract is hereby deleted in its entirety and the
attached Page 28 is inserted in lieu thereof.
2. Section 8.03(a) of the Contract is hereby deleted in its entirety
and the following is inserted in lieu thereof:
(a) The "Rentals" as defined in the Facilities Leases
shall be adjusted between Purchaser and Sellers as of
12:01 a.m. on the Closing Date. Notwithstanding anything
in Section 8.03 to the contrary, the parties agree that
with regard to the adjustment and proration of Percentage
Rental, such proration shall be made at the time the
Percentage Rental is payable as specified in accordance
with the Facilities Leases.
3. Section 2.07(a) of the Contract is hereby deleted in its entirety
and the following is inserted in lieu thereof:
(a) Defective Facilities Identified During the Review
Period. In the event (i) Purchaser reasonably determines
that a Facility has structural, environmental, legal or
operational defects or conditions that would require
expenditures equal to or greater than seven and one-half
percent (7.5%) of the amount of the Purchase Price
allocated to such Facility in order to bring such
Facility into a satisfactory condition in accordance with
prevailing senior living community industry standards
(any such Facility being hereinafter referred to as a
"Defective Facility"), and (ii) Purchaser provides
written notice thereof to Sellers no later than the
expiration of the Review Period, time being of the
essence, specifying the Facility or Facilities Purchaser
wishes to be deleted, Sellers, shall, subject to
paragraph (c) below, be required to delete such Facility
or Facilities from the sale contemplated hereunder.
Prior to Closing, Sellers agree to enforce all rights
available against third parties, including, without
limitation, MSLS, and to cause any and all defects or
conditions so identified by Purchaser that are the
obligations of such third parties to be corrected, it
being expressly understood and agreed that nothing
contained herein shall be construed to relieve any such
parties from any obligations with respect to such
matters.
4. If any terms and conditions of this Amendment conflict with the
terms and conditions of the Contract, the terms and conditions of this
Amendment shall prevail. Except as specifically modified herein, the
Contract is and remains in full force and effect.
5. Any capitalized terms used herein but not defined herein shall have
the same meaning as set forth in the Contract.
6. This Amendment may be executed in counterparts, all of which taken
together shall constitute one document.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the 7th day of April, 1994.
Witness: HEALTH AND REHABILITATION
PROPERTIES TRUST
By:___________________________ By:___________________________
Its:
Attest: HMH PROPERTIES, INC.
By:___________________________ By:___________________________
Assistant Secretary Its
Attest: HMC RETIREMENT PROPERTIES, INC.
By:___________________________ By:___________________________
Assistant Secretary Its
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Sellers shall perform all of the adjustments, including any not
specifically referred to herein, which are appropriate and usual.
The adjustments hereunder shall be calculated or paid in an
amount based upon a fair and reasonable estimated accounting
performed and agreed to by representative of Sellers and
Purchaser at the Closing. Subsequent final adjustments and
payments shall be made in cash or other immediately available
funds as soon as practicable after the Closing Date, and in any
event within ninety (90) days after the Closing Date, based upon
an agreed accounting performed by representatives of Sellers and
Purchaser. In the event the parties have not agreed with respect
to the adjustments required to be made pursuant to this Section
8.03 within such ninety-day period, upon application by either
party, the Accountant shall determine any such adjustments which
have not theretofore been agreed to between Sellers and
Purchaser. The charges of the Accountant shall be borne fifty
percent (50%) by Sellers and fifty percent (50%) by Purchaser.
(d) Sellers and Purchaser agree that the Title Company
shall retain from the Sellers' Funds such amounts as may be
necessary to discharge any monetary encumbrances (other than
Permitted Encumbrances) affecting any Facility. The closing
statement agreed to among the Title Company, Sellers and
Purchaser shall reflect such use of the Sellers' Funds.
(e) Purchaser and Sellers acknowledge that (x) Sellers have
applied for and there is pending with respect to the Facility
located in Silver Spring, Maryland a Certificate of Need for
sixteen (16) skilled nursing beds and (y) the Purchase Price has
been determined and agreed upon in recognition of the fact that
such Certificate of Need will not be granted prior to the
Closing. If, for any reason, such Certificate of Need is
irrevocably approved and issued prior to the Closing, the
Purchase Price shall be increased by an amount equal to
$1,000,000. Furthermore, if such Certificate of Need shall be
irrevocably approved and issued on or before the date two (2)
years after the Closing Date, Purchaser shall pay to Sellers,
within ten (10) days thereafter, $1,000,000 in immediately
available federal funds to such account or accounts as Sellers
may designate. The provisions of this section shall survive the
Closing.
(f) Purchaser and Sellers acknowledge that the Purchase
Price of $320,000,000 is based in part on the minimum and
percentage rentals payable by MSLS as tenant under the Facilities
Leases. Under the Facilities Leases, the percentage rents are
equal to the product of net receipts over an aggregate sales
breakpoint of $71,513,000. If, prior to the Closing Date, the
aggregate sales breakpoint is reduced pursuant to lease
amendments to the Facilities Leases, in form and substance
reasonably acceptable to Purchaser, the Purchase Price shall be
increased by an amount equal to nine (9) times the product of (x)
the reduction in the aggregate net sales breakpoint and (y) 4.5%;
provided, however, in no event shall the Purchase Price increase
pursuant to this Section by an amount in excess of Two Million
Dollars ($2,000,000). An example of such an adjustment is set
forth on Exhibit B.
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