REAL ESTATE PURCHASE AND SALE AGREEMENT
This Real Estate Purchase and Sale Agreement (the "Agreement") is by and between
Auburn Land LLC, a Massachusetts limited liability company ("Seller"), and
Emeritus Properties XIV, LLC, a Washington limited liability company ("Buyer").
This Agreement is attached to and a part of the Lease Agreement between Seller
and Buyer dated January 1, 2000 (the "Lease") and shall become effective on the
date of the exercise of the Purchase Option (as defined in the Lease) by Buyer
as provided therein. Capitalized terms used herein shall have the same meanings
as set forth in the Lease.
Pursuant to the terms of the Lease, Buyer has already investigated the Premises,
the condition of title and the books and records relating thereto. Buyer
acknowledges that Buyer has occupied the Premises as Tenant pursuant to a
sublease (the "Sublease") with Sage, L.L.C. (the tenant under the Lease), as
Landlord, and, as such, Buyer is intimately familiar with the Premises and
hereby agrees to take title to same "as is".
Now, therefore, Buyer and Seller agree as follows-:
1. Purchase and Sale. On the terms and conditions set forth herein, Buyer
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agrees to acquire from Seller and Seller agrees to transfer to Buyer the
following: (i) the Premises described on Exhibit A attached hereto, which shall
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include the Real Property, the Improvements, and the Facility, together with the
all the furniture, fixtures, equipment, and any other improvements, (ii) the
Personal Property, (iii) all rights, privileges, easements, including without
limitation, all development rights, air rights, water rights, permits, and
licenses, and (iv) Seller's interest in all existing service contracts, resident
agreements, security and rental deposits, and all assignable warranties for the
benefit of the Premises and the improvements thereon.
2. Purchase Price. The purchase price shall be $10,200,000. The purchase
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price shall be payable in full in cash certified funds or by wire transfer of
immediately available funds at Closing.
3. Earnest Money. Within one business day after full execution of this
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Agreement, Buyer shall deposit $100,000 with an escrow company designated by
Buyer (the "Escrow Agent") as an earnest money deposit (the "Earnest Money").
Upon closing of this transaction, the Earnest Money shall be credited against
the Purchase Price. In the event this transaction fails to close as a result of
Seller's default, the failure of any condition precedent to Buyer's obligations,
or any reason other than Buyer's default, the Earnest Money shall be returned to
Buyer. In the event this transaction fails to close as a result of Buyer's
default, the Escrow Agent shall deliver the Earnest Money to Seller and
retention of the Earnest Money by Seller shall be Seller's sole and exclusive
remedy. Escrow Agent shall deposit the Earnest Money in an interest bearing
account at a financial institution approved by Buyer.
4. Closing. Closing shall occur on a date specified by Buyer, but no later
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than ninety (90) days after exercise by Buyer of the Purchase Option ("Closing"
or "Closing Date"). Closing shall occur at the office of the Escrow Agent or at
such other location mutually satisfactory to Buyer and Seller. Time is of the
essence in this Agreement.
5. Conveyance Documents.
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a. Delivery by Seller. On or prior to the Closing Date, Seller shall deposit
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with the Escrow Agent, the following conveyance documents:
i. The duly executed and acknowledged limited warranty deed, in the
form attached hereto as Exhibit B, ready for recordation on the Closing Date.
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ii. An affidavit certifying that Seller is not a "foreign person"
within the meaning of the Foreign Investment in Real Property Tax Act.
iii. Any customary affidavits or certifications required by the Title
Company (as defined below) to issue the title policy.
v. iv. A bill of sale for the Personal Property.
v. Any other conveyance documents in a form customary for transactions
of this nature.
b. Delivery by Buyer.
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i. A duly executed assumption of leases and resident agreements.
ii. A duly executed assumption of service contracts.
iii. Any other conveyance documents in a form customary for transactions of
this nature.
6. Title Insurance. Buyer shall procure its own title insurance issued by a
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title company designated by Buyer (the "Title Company") in the face amount of
the purchase price dated as of the Closing Date, and insuring Buyer's title to
the Premises subject to the standard preprinted exceptions and the Permitted
Exceptions (other than any Facility Mortgage, which will be satisfied in full
and removed as an encumbrance to title by Seller in connection with Closing).
Seller agrees to provide whatever affidavits Title Company may reasonably
require to remove the standard preprinted exceptions for any mechanics liens and
parties in possession (other than residents under existing resident agreements).
Buyer shall be responsible for any surveys that may be required to remove the
standard preprinted exceptions for survey matters.
7. Closing Costs. At Closing, Seller shall pay (i) real estate transfer
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taxes, deed taxes, fees necessary to remove any liens related to the Facility
mortgage or similar conveyance taxes, (ii) costs of compliance with Internal
Revenue Code Section 6045(e) (if any), and (iii) one-half of Escrow Agent's
escrow fees and charges. Buyer shall pay (i) the costs of standard title
insurance and extended coverage endorsements requested by Buyer, (ii) sales tax
on the value of the-tangible personal property (if any), (iii) any other
recording fees and (iv) one-half of Escrow Agent's escrow fees and charges. Each
party shall be responsible for its own legal, accounting and consultant fees.
8. Prorations. Any Rent, Additional Rent, taxes, assessments, operating
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expenses, utilities and similar matters payable by Buyer to Seller under the
Lease will be prorated at Closing to the extent necessary. Any prepaid rents and
security deposits held by Seller (if any) will be transferred to Buyer at
Closing. Any matters which cannot be prorated with certainty at Closing shall be
adjusted between the parties as soon as reasonably possible after Closing as the
correct figures becomes available.
9. Casualty or Condemnation. In the event of a Major Casualty (as defined in
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the Lease) to the Premises or the commencement of an action for condemnation of
all or any portion of the Premises after Buyer exercises its Purchase Option but
prior to Closing, Buyer may at its option terminate this Agreement or proceed
with the purchase and sale transaction and take an assignment from Seller of
available insurance proceeds and/or condemnation proceeds.
10. Negotiation and Construction. This Agreement and each of the terms and
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provisions hereof are deemed to have been explicitly negotiated between the
parties, and the language in all parts of this Agreement shall, in all cases, be
construed according to its fair meaning and not strictly for or against either
party.
11. Brokers and Finders. In the event of a claim for broker's fee, finder's
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fee, commission or other similar compensation in connection herewith, Buyer, if
such claim is based upon any agreement alleged to have been made by Buyer,
hereby agrees to indemnify Seller against and hold Seller harmless from any and
all damages, liabilities, costs, expenses, and losses (including, without
limitation, reasonable attorneys' fees and costs) which Seller may sustain or
incur by reason of such claim, and Seller, if such claim is based upon any
agreement alleged to have been made by Seller, hereby agrees to indemnify Buyer
against and hold Buyer harmless from any and all damages, liabilities, costs,
expenses and losses (including, without limitation, reasonable attorneys' fees
and costs) which Buyer may sustain or incur by reason of such claim The
provisions of this section shall survive the termination of this Agreement or
the Closing.
12. GoverningLaws,Attorneys' Fees. This Agreement shall be construed
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according to the laws of the Commonwealth of Massachusetts. If either Buyer or
Seller should find it necessary to employ an attorney to enforce a provision of
the Agreement or to recover damages, for the breach hereof (including
proceedings in bankruptcy), the prevailing party shall be entitled to be
reimbursed for its court costs and attorneys' fees, in addition to all damages,
through all levels of appeal.
13. Default. If Seller shall fail to perform any covenant or agreement of
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Seller contained herein, Buyer may elect to pursue any and all remedies
available in law or in equity, including, without limitation (a) specific
performance of this Agreement; (b) damages from Seller; or (c) termination of
this Agreement, return of the Earnest Money and the Sublease shall remain in
full force and effect. If Buyer shall fail to perform any covenant or agreement
of Buyer contained herein, Seller's retention of the Earnest Money shall be
Seller's sole and exclusive remedy and this Agreement shall terminate and the
Lease shall remain in full force and effect in accordance with its terms.
14. Notices. All notices required or permitted to be given hereunder shall
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be in writing and shall be personally delivered, transmitted by telephone
facsimile or sent by U.S. certified mail, return receipt requested, addressed as
set forth below:
Buyer:
c/o Emeritus Corporation
3131 Elliott Avenue, Suite 500
Seattle, Washington 98121
Attention: Raymond R. Brandstrom
Telephone No.: (206) 298-2909
Fax No.: (206) 301-4500
With a copy to:
Randi S. Nathanson, Esq.
The Nathanson Group PLLC
1520 Fourth Avenue, Sixth Floor
Seattle, Washington 98101
Telephone No.: (206) 623-6239
Fax No.: (206) 623-1738
Seller:
Auburn Land LLC
c/o Hanseatic Corporation
450 Park Avenue, Suite 202
New York, New York 10022
Attn.: Mr. Paul A. Biddelman
Telephone No.: (212) 832-3038
Facsimile No.: (212) 223-2425
With a copy to:
Krugman & Kailes LLP
Park 80 West Plaza Two
Saddle Brook, New Jersey 07663
Telephone No.: (201) 845-3434
Facsimile No.: (201) 845-9627
Attn.: Mr. Thomas Goodwin
Either party hereto may by proper notice made by the other party designate such
other address for giving of notices. All notices shall be deemed given on the
day such notice is personally served or transmitted by telephone facsimile or on
the third business day following the date such notice is mailed in accordance
with this Section.
15. Successors and Assigns. This Agreement shall be binding upon and inure
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to the benefit of the parties hereto and their respective successors, heirs,
administrators and assigns. Notwithstanding the foregoing, Buyer may assign this
Agreement or any of its rights hereunder.
16. Authority. Buyer and Seller each represent that they have all the
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requisite power and authority as a limited liability company to own, convey
and/or purchase property as is contemplated by this Agreement.
17. No Conflicts. Buyer represents that the execution, delivery and
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performance of the Agreement does not conflict with or result in a violation of
its certificate of formation or operating agreement and the execution, delivery
and performance by the Buyer of the Agreement will not conflict with or result
in a violation of any provision of any agreement, contract or instrument to
which the Buyer is a party. Seller represents that the execution, delivery and
performance of the Agreement does not conflict with or result in a violation of
its certificate of formation or operating agreement, as amended, and the
execution, delivery and performance by the Seller of the Agreement will not
conflict with or result in a violation of any provision of any agreement,
contract or instrument to which the Seller is a party.
18. Captions. The captions are included in this Agreement for convenience
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of reference only and shall not be construed so as to define, limit or modify in
any manner any of the terms hereof.
19. Counterparts. This Agreement may be executed in counterparts, each of
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which shall be deemed an original, but all of which taken together shall
constitute but one and the same instrument.
20. Entire Agreement. This Agreement contains the entire understanding
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between the parties and supersedes any prior agreements between them respecting
the subject matter hereof.
21. Further Assurances. As and to the extent otherwise contemplated by this
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Agreement, each party to this Agreement agrees that it will at any time and from
time to time after the date hereof, at its sole cost and expense, immediately
following the reasonable request of the other party, promptly execute,
acknowledge (if necessary) and deliver or cause to be properly executed,
acknowledged (if necessary) and delivered, such agreements, certificates,
statements, instruments and documents and promptly take, or promptly cause to be
taken, such other and further steps and actions, as may be required by law or as
reasonably shall be deemed necessary by the other party in order to more fully
effect, evidence or carry out the intent and purposes of this Agreement.
[Signatures on following page]
Effective as of the date of exercise of the Purchase Option under the Lease.
SELLER: AUBURN LAND LLC
By: HF Realty Holding LLC
Its: Managing Member
By: /s/ Paul Biddelman
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Name: Paul Biddelman
Its: President
BUYER: EMERITUS PROPERTIES XIV, LLC
By: Emeritus Corporation
Its: Sole Member
By: /s/ Raymond R. Brandstrom
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Name: Raymond R. Brandstrom
Its: CFO
LIST OF EXHIBITS:
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Exhibit A - Legal Description of the Real Properly
Exhibit B - Form of Limited Warranty Deed