PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT is made and entered into as of the 29th
day of September, 2003 by and between MISSISSIPPI BAPTIST MEDICAL ENTERPRISES,
INC., a Mississippi corporation ("Seller"), ESC-RIDGELAND, LLC, a Washington
limited liability company ("Purchaser"), EMERITUS PROPERTIES XI, LLC, a
Washington limited liability company ("Emeritus XI") and RIDGELAND ASSISTED
LIVING, LLC, a Washington limited liability company (the "Company").
RECITALS
A. Seller and Emeritus XI, are members of a limited liability company
known as Ridgeland Assisted Living, LLC, a Washington limited liability company
(the "Company").
B. The Company owns an assisted living facility commonly known as
Ridgeland Pointe, 410 Orchard Park, Ridgeland, Mississippi (the "Facility").
C. Emeritus XI's sole member, Emeritus Corporation, a Washington
corporation ("Emeritus"), and its affiliates intend to consummate a transaction
with Health Care REIT, Inc. and various affiliates thereof (collectively, "HC
REIT") pursuant to which, among other things, the Facility will be sold to HC
REIT or its affiliate and leased back to the Company (the "HC REIT
Transaction").
D. In connection therewith, Purchaser is interested in purchasing and
Seller is interested in selling all of Seller's interest in and to the Company,
all upon and subject to the terms and conditions set forth herein.
E. Purchaser and Seller are interested in documenting the terms and
conditions of such purchase and sale transaction.
F. All capitalized terms used herein and not otherwise defined shall
have the meaning set forth in the Operating Agreement of the Company dated
December 23, 1998, as amended by First Amendment dated September 2, 1999 (the
"Operating Agreement").
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants of the parties set forth herein, IT IS HEREBY AGREED AS FOLLOWS:
AGREEMENT
1. PURCHASE AND SALE.
Seller does hereby agree to sell to Purchaser and Purchaser does hereby
agree to purchase from Seller all of Seller's right, title and interest in and
to its Interest in the Company (the "Interest"). By its signature set forth
below, Emeritus XI shall be deemed to have consented to the purchase and sale of
the Interest as required by Section 8.1 of the Operating Agreement.
2. PURCHASE PRICE
The purchase price payable by Purchaser to Seller for the Interest shall be
Two Million Five Hundred Thousand and no/100 Dollars ($2,500,000.00) and shall
be due and payable by wire transfer of immediately available funds on the
Closing Date (as hereinafter defined). Seller acknowledges and agrees that the
payments provided for in this Section 2 shall be in lieu of the purchase price
provided for in Section 8.7 of the Operating Agreement and that Purchaser shall
have no rights or obligations under Section 8.7 of the Operating Agreement upon
consummation of the transaction provided for in this Agreement nor shall Seller
have any right to any Net Cash from Operations (as that term is defined in the
Operating Agreement) which may be available at Closing, but instead the same
shall be and remain an asset of the Company.
3. CLOSING AND POST CLOSING
a. Provided that all of the conditions to the closing of the HC REIT
Transaction (the "HC REIT Closing") shall be satisfied or waived and the HC REIT
Closing shall have occurred or be fully ready to occur, the closing of the
purchase and sale of the Interest (the "Closing") shall occur concurrently with
the HC REIT Closing (the "Closing Date"), it being understood and agreed that
the Closing is and shall be specifically conditioned on the HC REIT Closing and
that Purchaser shall have no obligations to Seller hereunder nor shall Seller
have any rights against Purchaser hereunder unless the HC REIT Closing occurs.
The Closing shall occur through escrow using Land America Title Company, which
is acting as escrow agent in the connection with the HC REIT Closing (the
"Escrow"). Notwithstanding the foregoing, if the Closing has not occurred by
September 30, 2003, then this Agreement shall be null and void and of no further
force and effect and none of the parties shall thereafter have any further
rights or obligations hereunder.
b. On the Closing Date, Seller shall execute and deliver to Purchaser
an Assignment Agreement with respect to the Interest in the form attached hereto
as Exhibit A and such other documents as may be necessary in order to convey
title to the Interest to Purchaser.
c. On the Closing Date, Seller and Purchaser shall execute or cause to
be executed and delivered a Termination Agreement in the form attached hereto as
Exhibit B terminating the Ancillary Services Agreement dated as of December 20,
1998 (the "Ancillary Services Agreement") among the Company, Emeritus
Corporation ("Emeritus") and Mississippi Baptist Health Systems, Inc. (the
"Provider"), a Termination Agreement in the form attached hereto as Exhibit C
terminating the Lease Agreement between the Company and Provider, resignations
duly executed by each of the MBME Representatives on the Board of the Company in
the form attached hereto as Exhibit D and a written confirmation from Steven M.
Hendrix confirming that he has been replaced as the Independent Manager of the
Company in the form attached hereto as Exhibit E.
d. Seller acknowledges and agrees that from and after the Closing Date,
Purchaser and Emeritus XI shall have the right to continue the existence and
business of the Company and to continue to operate that business in the name of
the Company in effect on the date hereof or under such other name as they may
elect to operate from time to time thereafter, including but not limited to,
Ridgeland Pointe but in no event shall the Company, Purchaser or Emeritus XI
have any right from and after the Closing Date to use the name "Baptist" in any
form and Purchaser and Emeritus XI shall cause the Company to take all necessary
action to remove the name "Baptist" in any form from all signage, letterhead,
marketing materials and any other property of the Company, all at the cost of
the Company. Seller further acknowledges and agrees that from and after the
Closing Date Seller shall have no right, title or interest in and to any of the
assets of the Company nor shall Seller have any right to participate in the
business of the Company or any responsibility for any of the liabilities of the
Company; provided, however, nothing herein shall be construed as relieving
Seller from any obligations which it may have, whether the same exist as of the
Closing Date or arise after Closing, arising from or related to its status as a
member of the Company prior to the Closing Date, subject to the provisions of
Article VII of the Operating Agreement and nothing herein shall impair the
indemnification and other provisions of the Operating Agreement in favor of
either Seller or Emeritus XI as they relate to the status of each of Seller and
Emeritus XI as the members of the Company prior to the Closing Date or as they
relate to the status of Emeritus XI as the Managing Member of the Company prior
to the Closing Date.
e. Seller does hereby ratify and affirm its confidentiality and non
competition obligations under Sections 6.3 and 6.4 of the Operating Agreement
and does hereby knowingly, voluntarily and unconditionally waive any rights in
may have under Section 6.4(d) of the Operating Agreement to participate in the
facility currently leased by Emeritus Corporation in Hattiesburg, Mississippi.
Purchaser acknowledges and agrees that the project contemplated by Section
6.4(d) to be constructed in Clinton, Mississippi has been constructed but that
the project contemplated by Section 6.4(d) to be construed in Brandon,
Mississippi has not been constructed and accordingly that Seller's non
competition obligations as set forth in Section 6.4 shall specifically exclude
the Clinton project.
4. REPRESENTATIONS AND WARRANTIES.
a. SELLER'S REPRESENTATIONS. Seller hereby represents and warrants to
Purchaser and Emeritus XI as follows:
(i) Seller has full power and authority to execute and to deliver this
Agreement and all related documents, and to carry out the transactions
contemplated herein and therein at the times provided for herein.
(ii) This Agreement is valid, binding and enforceable against Seller in
accordance with its terms except as such enforceability may be limited by
creditors rights laws or general principles of equity. The execution of this
Agreement and the consummation of the transactions contemplated herein in
accordance with the terms hereof do not and will not result in a breach of the
terms and conditions of nor constitute a default under any law, regulation,
court order, mortgage, note, bond, indenture, agreement, license or other
instrument or obligation to which Seller is now a party or by which Seller's
assets are bound or affected.
(iii) Seller has not granted any other party any right to purchase its
Interest and the Interest shall, at the time of the conveyance thereof to
Purchaser, be free and clear of all liens, charges and encumbrances.
(iv) Seller has not in its capacity as a Member of the Company
performed any act or entered into any transaction which is in violation of the
terms of the Company's Operating Agreement, including, but not limited to, any
transaction involving the granting of any lien or encumbrance on any of the
asset of the Company.
(v) The right or ability of Seller to consummate the transaction
contemplated herein has not been challenged by any governmental agency or any
other person and Seller has no knowledge of the occurrence of any event which
would provide a reasonable basis for any such litigation, investigation or other
proceeding.
(vi) No representation or warranty by or on behalf of Seller contained
in this Agreement and no statement contained in any certificate, list, exhibit,
or other instrument furnished or to be furnished to Purchaser by Seller pursuant
hereto contains or will contain any untrue statement of a material fact, or
omits or will omit to state any material facts which are necessary in order to
make the statements contained herein or therein, in light of the circumstances
under which they were made, not misleading.
b. PURCHASER'S AND EMERITUS XI'S REPRESENTATIONS. Purchaser and
Emeritus XI, jointly and severally, hereby represent and warrant to Seller as
follows:
(i) Each of Purchaser and Emeritus XI has full power and authority to
execute and to deliver this Agreement and all related documents, and to carry
out the transactions contemplated herein and therein at the times provided for
herein.
(ii) This Agreement is valid, binding and enforceable against
Purchaser, Emeritus XI and the Company in accordance with its terms except as
such enforceability may be limited by creditors rights laws and general
principles of equity. The execution of this Agreement and the consummation of
the transactions contemplated herein in accordance with the terms hereof do not
and will not result in a breach of the terms and conditions of nor constitute a
default under any law, regulation, court order, mortgage, note, bond, indenture,
agreement, license or other instrument or obligation to which Purchaser,
Emeritus XI or the Company is now a party or by which any of the assets of
Purchaser, Emeritus XI or the Company are bound or affected; provided, however,
nothing herein shall be construed as a representation or warranty with respect
to any facts related to the Company which Purchaser or Emeritus XI are able to
demonstrate were actually known to Seller and not disclosed by Seller to
Emeritus XI or the Company.
(iii) The right or ability of Purchaser, Emeritus XI and the Company to
consummate the transaction contemplated herein has not been challenged by any
governmental agency or any other person and none of Purchaser, Emeritus XI or
the Company has any knowledge of the occurrence of any event which would provide
a reasonable basis for any such litigation, investigation or other proceeding;
provided, however, nothing herein shall be construed as a representation or
warranty with respect to any facts related to the Company which Purchaser or
Emeritus XI are able to demonstrate were actually known to Seller and not
disclosed by Seller to Emeritus XI or the Company.
(iv) No representation or warranty by or on behalf of Purchaser
contained in this Agreement and no statement contained in any certificate, list,
exhibit, or other instrument furnished or to be furnished to Seller by Purchaser
pursuant hereto contains or will contain any untrue statement of a material
fact, or omits or will omit to state any material facts which are necessary in
order to make the statements contained herein or therein, in light of the
circumstances under which they were made, not misleading.
5. AUTHORIZATION
Seller hereby authorizes Emeritus XI to execute on behalf of the Company
any and all documents required to be executed by the Company in connection with
the HC REIT Closing.
6. BREACH AND REMEDIES
a. In the event of a breach by Seller in its obligations under this
Agreement prior to the Closing Date, Purchaser shall have the right either (i)
to terminate this Agreement and sue to recover any damages it may have suffered
as a result of such breach or (ii) to seek to specifically enforce Seller's
obligations hereunder.
b. In the event of a breach by Purchaser in its obligations under this
Agreement prior to the Closing Date, Seller shall have the right to terminate
this Agreement and to sue to recover any damages it may have suffered as a
result of such breach or (ii) to seek to specifically enforce Purchaser's
obligations hereunder.
7. MISCELLANEOUS
a. Each of Seller and Purchaser shall be responsible for its own costs
and expenses associated with the purchase and sale of the Interest including any
state or federal income taxes due as a result thereof.
b. From and after the Closing Date, Seller shall take such actions and
properly execute and deliver to Purchaser such further instruments of
assignment, conveyance and transfer as may be reasonably necessary to assure,
complete and evidence the full and effective transfer and conveyance of the
Interest.
c. Any notice, request or other communication to be given by any party
hereunder shall be in writing and shall be sent by registered or certified mail,
postage prepaid, by overnight courier guaranteeing overnight delivery or by
facsimile transmission, to the following addresses:
To Seller: Mississippi Baptist Medical Enterprises, Inc.
c/o Mississippi Baptist Health Systems, Inc.
1225 North State Street
Jackson, MS 39202-0218
Attn: Russell W. York, CFO
With copy to: Mississippi Baptist Medical Enterprises, Inc.
c/o Mississippi Baptist Health Systems, Inc.
1225 North State Street
Jackson, MS 39202-0218
Attn: William B. Giete, General Counsel
To Purchaser: ESC-Ridgeland, LLC
c/o Emeritus Corporation
3131 Elliott Avenue
Suite 500
Seattle, WA 98121
Attn: Raymond Brandstrom, Chief Financial Officer
Phone: 206-298-2909
Fax: 206-301-4500
Notices may be sent by deposited in the United States mail postage prepaid,
by certified mail, return receipt requested, by facsimile transmission or by
overnight courier and shall be deemed received on actual receipt or refusal of
receipt thereof.
d. This Agreement may not be amended or modified in any respect
whatsoever except by an instrument in writing signed by the parties hereto.
This Agreement constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof and supersedes all prior negotiations,
discussions, writings and agreements between them with respect to the subject
matter hereof.
e. Emeritus XI unconditionally and absolutely guarantees the
performance and obligations of the Purchaser under this Agreement. Purchaser
may assign any or all of its rights hereunder to an entity which is owned or
controlled, directly or indirectly, by Purchaser or by Emeritus provided that
Emeritus XI concurrently delivers a written reaffirmation of its guarantee of
the obligations of the then purchaser hereunder as set forth in this Section
7(e).
f. The waiver by any party of any breach of any of the provisions of
this Agreement shall not constitute a continuing waiver or a waiver of any
subsequent breach of any provision of this Agreement.
g. Each recital set forth and exhibit referenced in this Agreement is
incorporated and becomes an integral part of this Agreement.
h. The captions of this Agreement are for convenience of reference only
and shall not define or limit any of the terms or provisions hereof.
i. Nothing in this Agreement express or implied is intended to and
shall not be construed to confer upon or create in any person (other than the
parties hereto) any rights or remedies under or by reason of this Agreement,
including without limitation, any right to enforce this Agreement.
j. Time is of the essence of this Agreement and of all of the
covenants, conditions, terms and provisions of this Agreement.
k. If any litigation or other proceedings are commenced between parties
to this Agreement regarding the rights and duties of any party pursuant to,
related to or arising from this Agreement, then the prevailing party with
respect to the litigation or other proceedings, shall be entitled, in addition
to the relief granted, a reasonable sum for attorneys' fees and costs of the
litigation or other proceedings.
l. This Agreement shall be governed by and construed in accordance with
the laws of the State of Washington. Any disputes between the parties shall be
submitted to arbitration in accordance with the provisions of Section 12.15 of
the Operating Agreement.
m. Should any one or more of the provisions of this Agreement be
determined to be invalid, unlawful or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions hereof shall
not in any way be affected or impaired thereby.
n. Each of the parties agrees to indemnify, defend and hold harmless
the other and its officers, agents, employees, members and partners and any
successors thereto, from and against any and all damages, losses, costs,
liabilities, obligations and expenses, including, but not limited to reasonable
attorneys fees and costs, including fees and costs on appeal, which it may incur
as a result of the breach by the other of its representations and warranties set
forth in Section 4 hereof or its obligations hereunder; provided, however, that
the indemnity provided for herein shall expire as to any claims not made in
writing to the other party within two (2) years from the Closing Date.
o. This Agreement, and any document executed in furtherance hereof, may
be executed in any number of counterparts, each of which shall be an original;
but such counterparts shall together constitute but one and the same instrument.
This Agreement, and any document executed in furtherance hereof, will be deemed
to be duly executed and delivered by a party upon the delivery by facsimile to
the other party of a signed copy hereof. Any party whose signature has been
delivered by facsimile, shall forward the original signature of its signature by
overnight delivery for receipt within no more than two (2) business days
thereafter.
p. Each party acknowledges and agrees that it has participated in the
drafting and the negotiation of this Agreement and has been represented by
counsel during the course thereof. Accordingly, in the event of a dispute with
respect to the interpretation or enforcement of the terms hereof, no provision
shall be construed so as to favor or disfavor either party hereto.
[REMAINDER OF THE PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereby execute this Agreement as of the day
and year first set forth above.
SELLER: MISSISSIPPI BAPTIST MEDICAL ENTERPRISES, INC.
By: Russell W. York
Its: CFO
PURCHASER: ESC-RIDGELAND, LLC
By: Emeritus Corporation
Its: Sole Member
By: __________________________
Its: __________________________
EMERITUS XI: EMERITUS PROPERTIES XI, LLC, a
Washington limited liability company
By: Emeritus Corporation
Its: Sole Member
By: __________________________
Its: ___________________________
COMPANY: RIDGELAND ASSISTED LIVING, LLC, a Washington limited liability
company
By: Emeritus Properties XI, LLC
Its: Managing Member
By: Emeritus Corporation
Its: Sole Member
By: William M. Shorten
Its: Director of Real Estate Finance
EXHIBIT A
FORM OF INTEREST ASSIGNMENT AGREEMENT
The undersigned does hereby sell, transfer, convey and assign to
ESC-Ridgeland, LLC ("ESC"), all of its right, title and interest (the
"Interest") held by it in Ridgeland Assisted Living, LLC, a Washington limited
liability company (the "Company") free and clear of all liens, charges, claims
and encumbrances. The undersigned does hereby further acknowledge and agree that
from and after the Effective Date (as hereinafter defined) it shall have no
further rights or obligations as a Member or Managing Member of the Company.
This Assignment may be executed in counterparts, each of which shall be
deemed to be an original, but all of which taken together shall constitute but
one and the same instrument.
This Assignment shall be effective as of ________________ (the "Effective
Date").
MISSISSIPPI BAPTIST MEDICAL ENTERPRISES, INC.
By: _________________________
Its: _________________________
EXHIBIT B
TERMINATION AGREEMENT
(ANCILLARY SERVICES AGREEMENT)
The undersigned being the parties to that Ancillary Services Agreement
dated December 30, 1998 (the "Agreement"), do hereby acknowledge and agree
pursuant to Section 22(a) of the Agreement to a mutual termination of the
Agreement as of ________________, 2003 (the "Effective Date").
In furtherance and not in limitation of the foregoing, the undersigned do
hereby further acknowledge and agree that from and after the Effective Date,
none of the undersigned shall have any further rights or obligations thereunder
other than (i) the obligation of Mississippi Baptist Health Systems, Inc. (the
"Provider") as set forth in Section 22 of the Agreement to remove from the
assisted living facility known as Ridgeland Pointe within forty five days of the
Effective Date any of its supplies and equipment which may be located therein
and which may have been used by it to provide the services contemplated by the
Agreement, (ii) the right of Ridgeland Assisted Living, LLC (the "Owner") to
retain title to any such supplies or equipment which are not removed within such
forty five (45) day period and (iii) the obligations of Provider and Owner to
name the other on the liability insurance policies required by Sections 3 and 4,
respectively, of the Agreement for the remainder of the current policy period,
and, if such policies provide for claims made, rather than occurrence based,
coverage, under a tail coverage policy or policies providing coverage for a
period of three years after the expiration of the current policy period.
This Agreement may be executed in counterparts, each of which shall be
deemed to be an original, but all of which taken together shall constitute but
one and the same instrument.
IN WITNESS WHEREOF, the parties hereby execute this Agreement as of the ___
day of ____, 2003
RIDGELAND ASSISTED LIVING, LLC
By: Emeritus Properties XI, LLC
Its: Managing Member
By: Emeritus Corporation
Its: Sole Member
By: ________________________
Its: ________________________
MISSISSIPPI BAPTIST HEALTH SYSTEMS, INC.
By: ______________________________
Its: ______________________________
EMERITUS CORPORATION
By: ________________________________
Its: ________________________________
EXHIBIT C
TERMINATION AGREEMENT
(LEASE)
The undersigned being the parties to that Lease Agreement dated December
30, 1998 (the "Lease") do hereby acknowledge and agree pursuant to Section 3 of
the Lease the Lease is and shall be terminated concurrently with the termination
of the Ancillary Services Agreement of even date among the undersigned and
Emeritus Corporation, i.e., as of ________________, 2003 (the "Effective Date").
In furtherance and not in limitation of the foregoing, the undersigned do
hereby further acknowledge and agree that from and after the Effective Date,
none of the undersigned shall have any further rights or obligations thereunder
other than (i) the indemnity obligations of Landlord and Tenant as set forth in
Section 19 as the same may relate to the period prior to the Effective Date,
(ii) the obligations of Tenant and Landlord to name the other on the liability
insurance policies required by Sections 21 and 22, respectively, of the Lease
for the remainder of the current policy period, and, if such policies provide
for claims made, rather than occurrence based, coverage, under a tail coverage
policy or policies providing coverage for a period of three years after the
expiration of the current policy period and (iii) the obligation of Tenant under
Section 32 of the Lease to remove from the Premises (as defined in the Lease)
within forty five (45) days of the Effective Date any of its supplies and
equipment which may be located therein and which may have been used by it to
provide the services contemplated by the Ancillary Services Agreement, (ii) the
right of Landlord to retain remove and store at Tenant's expense or to retain
title to any such supplies or equipment which are not removed within such forty
five (45) day period, it being understood and agreed that by executing this
Agreement, Landlord is agreeing to extend the thirty day period for the removal
thereof set forth in Section 32 of the Lease, all of which rights and
obligations shall specifically survive termination of the Lease for the period
stated herein.
On the Effective Date, Tenant shall be required to pay to Landlord any rent
due pursuant to Section 4 of the Lease which remains unpaid for the period
ending on the Effective Date or Landlord shall be required to refund to Tenant
any rent paid by Tenant pursuant to Section 4 of the Lease for any period which
extends beyond the Effective Date, as applicable
This Agreement may be executed in counterparts, each of which shall be
deemed to be an original, but all of which taken together shall constitute but
one and the same instrument.
IN WITNESS WHEREOF, the parties hereby execute this Agreement as of the ___
day of ____, 2003.
RIDGELAND ASSISTED LIVING, LLC
By: Emeritus Properties XI, LLC
Its: Managing Member
By: Emeritus Corporation
Its: Sole Member
By: ________________________
Its: ________________________
MISSISSIPPI BAPTIST HEALTH SYSTEMS, INC.
By: ______________________________
Its: ______________________________
EXHIBIT D
RESIGNATION
The undersigned, being a duly elected and acting MBME Representative, as
that term is defined in the Operating Agreement of Ridgeland Assisted Living,
LLC (the "Company") dated December 23, 1998, as amended by First Amendment dated
September 2, 1999 (the "Operating Agreement"), does hereby resign as a member of
the Board (as defined in the Operating Agreement) of the Company effective as of
____________, 2003.
___________________________________
EXHIBIT E
INDEPENDENT MANAGER CONFIRMATION
The undersigned do hereby acknowledge and agree that Steven M. Hendrix has
been advised that pursuant to Section 5.1(b) of the Operating Agreement of
Ridgeland Assisted Living, LLC (the "Company") dated December 23, 1998, as
amended by First Amendment dated September 2, 1999 (the "Operating Agreement"),
Emeritus Properties XI, LLC and ESC-Ridgeland, LLC, as the sole members of the
Company (the "Members"), have removed him from his position as the Independent
Manager of the Company and that the Members hereby appoint Mark Ferrucci to
serve in lieu thereof effective as of ______________, 2003.
This Agreement may be executed in counterparts, each of which shall be
deemed to be an original, but all of which taken together shall constitute but
one and the same instrument.
__________________________________
STEVEN M. HENDRIX
EMERITUS PROPERTIES XI, LLC
By: Emeritus Corporation
Its: Sole Member
By: ____________________________
Its: ____________________________
ESC-RIDGELAND, LLC
By: Emeritus Corporation
Its: Sole Member
By: ____________________________
Its: ____________________________