PURCHASE AND SALE AGREEMENT
THIS AGREEMENT is made and entered into as of the 31st day of March, 2004
(the "Effective Date"), by and among (i) THE LAKES ASSISTED LIVING, LLC, a
Washington limited liability company, SACRAMENTO COUNTY ASSISTED LLC, a
Washington limited liability company, ROCKFORD RETIREMENT RESIDENCE, LLC, a
Washington limited liability company, HB-ESC I, LLC, a Washington limited
liability company, CANTERBURY WOODS ASSISTED LIVING, LLC, a Washington limited
liability company, AUTUMN RIDGE HERCULANEUM, L.L.C., a Washington limited
liability company, MERIDIAN ASSISTED, L.L.C., a Washington limited liability
company, GOLDSBORO ASSISTED, L.L.C., a Washington limited liability company,
CAPE MAY ASSISTED LIVING, LLC, a Washington limited liability company, TRAVIS
COUNTY ASSISTED LIVING LP, a Washington limited partnership, RICHLAND ASSISTED,
L.L.C., a Washington limited liability company, SILVER LAKE ASSISTED LIVING LLC,
a Washington limited liability company, CHARLESTON ASSISTED LIVING, LLC, a
Washington limited liability company and JOLIET ASSISTED L.L.C., a Washington
limited liability company (each of the foregoing individually, a "Seller" and
collectively, the "Sellers") and (ii) EMERITUS CORPORATION, a Washington
corporation ("Purchaser").
RECITALS
A. Sellers are the owner of the Real Property and the Facilities (as
defined below).
B. Except for the Manor at Essington (the "Essington Facility"), all of the
Facilities are currently managed by Purchaser or ESC (as defined below) pursuant
to those Management Agreements described on Exhibit F attached hereto (the
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"Management Agreements").
C. Subject to the limitations set forth herein with respect to Autumn Ridge
(the "Autumn Ridge Facility"), Sellers are interested in selling the Real
Property and the Facilities to Purchaser and Purchaser is interested in
purchasing the same from Sellers (the "Transaction").
D. Purchaser has advised Sellers that the ultimate purchaser of
Sellers' Assets (as hereinafter defined) shall be Nationwide Health Properties,
Inc., a Real Estate Investment Trust organized under the laws of the State of
Maryland or an affiliate or subsidiary thereof ("NHP") and that NHP shall then
concurrently with its acquisition thereof lease them back to Purchaser or ESC
(as hereinafter defined).
E. Sellers and Purchaser are interested in documenting the terms and
conditions of the Transaction.
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.
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On the terms and conditions set forth herein, Sellers shall sell to Purchaser
and Purchaser shall purchase from Sellers the following:
(a) The real property situated in the States of Washington, Texas, West
Virginia, Louisiana, Mississippi, North Carolina, Missouri, Illinois,
California, Florida, Massachusetts and New Jersey (the "States"), which is more
particularly described in Exhibit A attached hereto (the "Real Property") and
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the improvements thereon that constitute those certain assisted/independent
living facilities described on Exhibit B attached hereto (the "Facilities")
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together with all tenements, hereditaments, rights, privileges, interests,
easements and appurtenances now or hereafter belonging or in any way pertaining
to the Real Property and/or the Facilities.
(b) All fixtures (the "Fixtures") attached or appurtenant to the Real
Property;
(c) All furnishings, equipment, tools, machinery, fixtures, appliances
and all other tangible personal property located on or about the Real Property
or the Facilities which is owned by Sellers (collectively, the "Personal
Property");
(d) All of the permits, licenses, approvals, entitlements and other
governmental and quasi-governmental authorizations including, without
limitation, certificates of occupancy and other similar permits relating to all
or any part of the Real Property or the Facilities and all amendments,
modifications, supplements, general conditions and addenda thereto, required in
connection with the use, operation or maintenance of the Facilities (the
"Permits and Approvals"). As used herein, "quasi-governmental" shall include the
providers of all utility services to the Property;
(e) All original reports, drawings, plans, blueprints, studies,
specifications, certificates of occupancy, building permits and grading permits
relating to all or any part of the Real Property or the Facilities and all
amendments, modifications, supplements, general conditions and addenda thereto
(the "Reports and Studies");
(f) All warranties, representations and guaranties with respect to the
Real Property and the Facilities, whether express or implied, which Seller now
holds or under which Seller is the beneficiary (the "Warranties");
(g) All of Seller's legal and equitable claims, causes of action, and
rights against the architects, engineers, designers, contrac-tors,
subcontractors, suppliers and mate-rialmen and any other party who has supplied
labor, services, materials or equipment, directly or indirectly, in connection
with the design, planning, construc-tion, manufacturing or operation of all or
any part of the Real Property and the Facilities (the "Claims");
(h) All inventories of every kind and nature whatsoever (specifically
including, but not limited to, all pharmacy supplies, medical supplies, office
supplies, other supplies and foodstuffs) owned by Sellers as of the date of this
Agreement or hereafter acquired, and relating to the Facilities, except
inventory sold or consumed in the ordinary course of business from and after the
date of this Agreement (the "Inventory");
(i) All rights to the telephone and facsimile numbers of the Facilities
and their sequential numbers, lien waivers, surety agreements, bonds,
warranties, guaranties, utility use agreements, covenants, commitments, permits,
certificates, approvals, and other intangible personal property of every kind
and nature whatsoever owned by Sellers as of the date of this Agreement or
hereafter acquired, which can be legally transferred and which relate directly
to the Facilities, other than cash (on hand or in banks) and accounts, notes,
interest, and other receivables arising from the operation of the Facilities
prior to the Closing Date (the "Intangible Property").
(j) All manuals, policies, procedures, handbooks, marketing materials,
books and records related to the ownership and operation of the Facilities
other than the financial records of Seller and XL (as hereinafter defined) which
relate to the period prior to the Closing Date and any proprietary materials of
XL containing the XL name or logo, but including all files for the persons
employed at the Facilities on the Closing Date and for the persons residing at
the Facilities on the Closing Date (the "Books and Records").
(k) The vehicle(s) which Seller has agreed to convey to Purchaser as
part of the Purchase Price which are described in Exhibit C hereto (the
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"Vehicles").
(l) The names of the Facilities and all related logos (the "Facility
Names").
Hereinafter the assets described in Section 1(a) through (l) shall
sometimes be collectively referred to as "Sellers' Assets."
Notwithstanding the foregoing, Purchaser acknowledges and agrees that
Seller shall have the right on written notice to Purchaser delivered on or prior
to the Outside Closing Date to withdraw the Autumn Ridge Facility from the
Transaction and sell it to an unrelated third party.
Except as specifically provided in this Agreement, Purchaser does not
hereby or in connection herewith assume any liability of Sellers or any other
party whatsoever in relation to Sellers' Assets.
2. PURCHASE PRICE.
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Subject to adjustment as provided herein, the total purchase price payable
by Purchaser for Sellers' Assets shall be One Hundred Thirty Nine Million Four
Hundred Seventy Two Thousand Two Hundred Ninety Three and no/100 Dollars
($139,472,293.00) (the "Purchase Price") and shall be divided into two
components.
(a) NHP PURCHASE PRICE. One Hundred Thirty Five Million Eight Hundred
Twenty Two Thousand Two Hundred Ninety Three and no/100 Dollars
($135,822,293.00) of the Purchase Price (the "NHP Purchase Price") shall be
allocable to the Facilities as follows:
FACILITY PURCHASE PRICE ALLOCATION
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The Lakes $ 23,385,330
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Loyalton of Folsom $ 13,350,266
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Loyalton of Rockford $ 10,499,078
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Kingsley Place - Shreveport $ 6,702,919
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Canterbury Woods $ 14,700,023
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Autumn Ridge $ 3,614,531
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Silverleaf Manor $ 5,129,599
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Pines of Goldsboro $ 8,322,934
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Loyalton of Cape May $ 14,751,803
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Beckett Meadows $ 5,804,611
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Richland Gardens $ 7,539,004
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Arbor Place $ 7,583,839
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Charleston Gardens $ 6,253,902
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Manor at Essington $ 8,184,454
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TOTAL $135,822,293
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The NHP Purchase Price shall be payable to Sellers as follows:
(i) EXISTING FINANCING. At the Closing(s) related to The Lakes,
Canterbury Woods, Loyalton of Folsom, Richland Gardens, the Essington Manor
Facility and Loyalton of Cape May (the "Encumbered Facilities"), Purchaser shall
assume or shall cause NHP to assume all of Sellers' rights and obligations under
the existing financing which is secured by the applicable Encumbered
Facility(ies) (the "Existing Financing") and the documents executed by the
applicable Seller(s) in connection therewith or as security therefor (the "Loan
Documents"), true and correct copies of which have been provided by the
applicable Sellers to Purchaser prior to the execution of this Agreement.
At each Closing with respect to the Facilities secured by the Existing
Financing, Purchaser shall pay to the applicable Seller by wire transfer of
immediately available funds an amount equal to the tax reserves and capital
expenditure reserves held by the applicable lender under the applicable Loan
Documents (the "Reserves"), it being understood and agreed that Purchaser and
not NHP shall be responsible for the reimbursement to the applicable Seller of
the Reserves.
Purchaser and Sellers acknowledge and agree that at each Closing with
respect to the Facilities secured by the Existing Financing, the outstanding
balance of the Existing Financing and Reserves as of the applicable Closing Date
shall be reflected on the Closing Statements prepared by the Title Company and
shall be deemed approved by Purchaser and the applicable Sellers once the
Closing Statements have been signed by each of the applicable Sellers and
Purchaser or NHP, as appropriate.
(ii) CASH AT CLOSING. Purchaser shall pay or shall cause NHP to pay at
Closing by wire transfer of immediately available funds the portion of the NHP
Purchase Price (plus or minus any costs and prorations for which Sellers and/or
Purchaser are responsible under the terms hereof and as the same may be adjusted
to reflect an adjustment to the Purchase Price in accordance with the terms
hereof) which relates to the Facilities being purchased and sold at each
Closing,.
(iii) ADJUSTMENT OF PURCHASE PRICE. In the event the applicable Seller
exercises its right to withdraw the Autumn Ridge Facility, the NHP Purchase
Price and the cash due at Closing pursuant to Section 2(a)(iii) shall be reduced
on a dollar for dollar basis by the portion of the Purchase Price allocated to
the Autumn Ridge Facility in Section 2(a).
(b) EMERITUS PURCHASE PRICE. In addition to the payment for the
Reserves provided for in Section 2(a)(i), the remainder of the Purchase Price in
the amount of Three Million Six Hundred Fifty Thousand and no/100 Dollars
($3,650,000.00) (the "Emeritus Purchase Price") shall be paid by Purchaser as
follows:
(i) At the Closing of the purchase and sale of the Facility located in
Rockford, Illinois, Purchaser shall execute and deliver a Promissory Note made
payable to the order of Rockford Retirement Residence, LLC in the face amount of
Seven Hundred Fifty Thousand and no/100 Dollars ($750,000.00) (the "Rockford
Note") and at the Closing of the purchase and sale of the Facility located in
Shreveport, Louisiana, Purchaser shall execute and deliver a Promissory note
made payable to the order of HB-ESC I, LLC in the face amount of Two Hundred
Fifty Thousand and no/100 Dollars ($250,000.00) (the "Shreveport Note" and
together with the Rockford Note, the "Notes"). Each of the Notes shall bear
interest at the rate of eight percent (8%) per annum, shall provide for monthly
payments of principal and interest, and payments shall be calculated based upon
a ten (10) year amortization of the unpaid principal balance. Each of the Notes
shall further provide that, subject to Purchaser's right to prepay the same
without penalty or premium, the entire principal balance and any accrued and
unpaid interest shall be due and payable in full on the third (3rd) anniversary
of the Closing Date (as hereinafter defined). Each of the Notes shall be in
form and substance acceptable to the applicable Seller and Purchaser.
(ii) The balance of the Emeritus Purchase Price in the amount of Two
Million Six Hundred Fifty Thousand and no/100 Dollars ($2,650,000.00) (the
"Purchaser Cash Payment") shall be paid to Sellers by wire transfer of
immediately available funds and shall be allocated among the Sellers as follows,
it being understood and agreed that in the event that less than all of the
Facilities are sold to Purchaser or NHP at a Closing, the Purchaser Cash Payment
shall be prorated at each Closing based on the Facilities being sold at each
Closing:
Richland Assisted, L.L.C $500,000
Travis County Assisted Living LP $150,000
Charleston Assisted Living, LLC $100,000
Meridian Assisted, L.L.C $150,000
Goldsboro Assisted, L.L.C $675,000
The Lakes Assisted Living, LLC $475,000
Canterbury Woods Assisted Living, LLC $300,000
Cape May Assisted Living, LLC $300,000
3. CLOSING.
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(A) THE CLOSING DATE.
(i) Provided all of the conditions to closing set forth in this
Agreement have been satisfied or waived, the closing (the "Closing") of the
Transaction shall take place on March 31, 2004 (the "Initial Closing Date") with
respect to the Facilities other than the Autumn Ridge Facility as to which the
Closing shall not be required to occur any earlier than April 30, 2004;
provided, however, in the event the conditions to Closing have not been
satisfied or waived as of the Initial Closing Date as to any or all of the
Facilities, Purchaser shall be required to close the Transaction with respect to
those Facilities, other than the Autumn Ridge Facility, as to which the
conditions to closing have been satisfied or waived and the Closing with respect
to the remaining Facilities, including the Autumn Ridge Facility, shall be
deferred but Seller and Purchaser will diligently proceed to Closing on the
remaining Facilities effective as of the end of the month in which the
outstanding conditions to Closing have been satisfied or waived. In furtherance
and not in limitation of the foregoing, Seller and Purchaser acknowledge and
agree that it is the intent of the parties that Sellers shall be required to
sell, and Purchaser shall be required to purchase or to cause NHP to purchase
all and not less than all of the Facilities (excluding the Autumn Ridge Facility
in the event the applicable Seller exercises its right to withdraw the same from
the Transaction), assuming the conditions to Closing are satisfied or waived
within the periods set forth in this Agreement as to all of the Facilities.
(ii) Notwithstanding the foregoing, if the conditions to Closing, including
with respect to the Autumn Ridge Facility if it has not been withdrawn by the
applicable Seller in accordance with the terms hereof, have not been satisfied
or waived by June 30, 2004 (the "Outside Closing Date"), either party shall have
the right to exercise the termination rights set forth in Paragraph 15 with
respect to the affected Facility or Facilities.
(iii) Any and all references herein to the "Closing" shall mean the
Closing with respect to the Facilities at the point in time being referred to
which are being conveyed to Purchaser by the applicable Sellers, it being
understood and agreed that the parties contemplate that there will be more than
one Closing occurring under this Purchase Agreement and that, with respect to
each of the Facilities, the "Closing Date" shall mean the date on which the
Closing occurs with respect to each such Facility.
(b) THE CLOSING PROCESS. Closing shall occur through escrow and
accordingly, at or prior to the Closing Date, Purchaser and Sellers shall
deposit in escrow with Chicago Title Insurance Company (the "Title Company") all
documents and monies necessary to close this transaction as herein provided.
Time is of the essence of this Agreement. Closing shall occur in accordance
with the procedures and instructions given by Sellers and Purchaser to the Title
Company prior to Closing.
4. CONVEYANCES/DELIVERIES AT CLOSING.
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(a) SELLERS' CLOSING DELIVERIES. At Closing, each of the Sellers shall
deliver the following documents to the Title Company for recording and/or
delivery to Purchaser or NHP, as applicable:
(i) A Warranty or Grant Deed with respect to the Real Property and
Facility owned by it (collectively the "Deeds"), which Deeds shall be in form
and substance acceptable to Sellers and Purchaser;
(ii) A Bill of Sale in favor of NHP with respect to the Sellers' Assets
described in Sections 1(b) through (g) and (i) (the "NHP Bill of Sale") and a
Bill of Sale in favor of Purchaser or ESC with respect to the Sellers' Assets
described in Sections 1(h) and (j) through (l) and with respect to the Assumed
Operating Contracts in effect at such Facility (the "Emeritus Bill of Sale" and
together with the NHP Bill of Sale, the "Bills of Sale") and which, in each
case, are located at the Real Property and Facility owned by such Seller, which
shall be in the form and substance acceptable to Seller, NHP and Purchaser or
ESC, as applicable;
(iii) An affidavit executed by each of the Sellers under penalty of
perjury, stating such Seller's United States taxpayer identification numbers and
that such Seller is not a foreign person, in accordance with the Internal
Revenue Code, Section 1445(b)(2);
(iv) Except with respect to the Facilities located in Shreveport, Louisiana
and Folsom, California, either (A) a Termination of the Management Agreement
with respect to the Facility owned by such Seller, if Purchaser is licensed as
of the Closing Date to operate such Facility (the "Management Termination
Agreements"), which Management Termination Agreements shall be in form and
substance acceptable to Sellers and Purchaser or (B) (i) an Amendment of the
Management Agreement with respect to the Facility owned by such Seller, if
Purchaser is not licensed as of the Closing Date to operate such Facility (the
"Management Agreement Amendments"), which Management Agreement Amendment shall
be in form and substance acceptable to Sellers and Purchaser and (ii) an Interim
Sublease (as defined below);
(v) With respect to the Facility located in Shreveport, Louisiana, a Lease
Termination Agreement in form and substance acceptable to the applicable Seller
and Purchaser;
(vi) With respect to the Facility located in Folsom, California, a Lease
Termination Agreement and a Termination of Working Capital Agreement, each in
form and substance acceptable to the applicable Seller and Purchaser;
(vii) An Owner's Affidavit duly executed by each of the Sellers in such
form and content as may be reasonably required by the Title Company;
(viii) A Gap Indemnity duly executed by each of the Sellers in such form and
content as may be reasonably required by the Title Company;
(ix) Such other affidavits and indemnities and other documents as may be
customarily and reasonably required for the issuance of the Title Policies in
accordance with the terms of the Agreement, including but not limited to, no
change affidavits with respect to the ALTA surveys delivered to the Title
Company for the Lakes, Canterbury Woods and Folsom Facilities (the "Existing
Surveys");
(xi) Documentation, reasonably acceptable to Purchaser and the Title
Company, confirming the authority of such Seller to execute and deliver this
Agreement and all of the documents described in this Paragraph 4 and to
consummate the Transaction;
(xii) A Termination Agreement with the Management Agreement with XL
Management Company, LLC ("XL") with respect to the Essington Manor Facility (as
hereinafter defined);
(xiii) A closing statement with respect to each of the Facilities;
(xiv) Any documents to which the applicable Seller may be a party in
connection with the assumption of the Existing Financing.
(b) PURCHASER'S DELIVERIES. At Closing Purchaser shall deliver or cause to
be delivered to the Title Company for recording and/or delivery to Sellers:
(i) The cash due at Closing pursuant to Paragraphs 2(a)(ii) and
2(b)(ii);
(ii) The Management Agreement Amendments or Management Termination
Agreements, as applicable;
(iii) The Interim Subleases, if and to the extent applicable;
(iv) The Emeritus Bill of Sale;
(v) Documents evidencing the assumption of the Existing Financing by
Purchaser or NHP;
(vi) Documentation, reasonably acceptable to Sellers and the Title
Company, confirming the authority of Purchaser to execute and deliver this
Agreement and all of the documents described in this Paragraph 4 and to
consummate the Transaction;
(vii) Such supporting affidavits from Purchaser or ESC, in its capacity as
the manager of the Facilities other than the Essington Manor Facility, as
Sellers may reasonably request with respect to the matters covered by the
Owner's Affidavits and no change affidavits being delivered by Sellers pursuant
to Sections 4(a)(vii) and (ix), respectively; and
(viii) A closing statement with respect to each of the Facilities.
5. CLOSING COSTS AND PRORATIONS.
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(a) COSTS AND EXPENSES. Costs and expenses associated with the sale of
Sellers' Assets to Purchaser or NHP shall be allocated between the parties as
follows:
(i) Any state, county, or local transfer, sales, excise or use tax due
and payable by virtue of the transfer to Purchaser or NHP of the Real Property
and Facilities, the cost of the Owner's Title Policies (as defined below)
including any endorsements required to resolve any objections to title set forth
in the Title and Survey Objection Letters (as defined below) which Sellers agree
to cure in accordance with the terms of this Agreement, the cost of the Surveys
(as defined below), escrow fees and recording fees shall be allocated between
Sellers and Purchaser in the manner set forth in Exhibit D;
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(ii) Purchaser and Sellers shall each pay their own attorney's fees;
(iii) Purchaser will bear all costs associated with its Due Diligence
Review (as defined below);
(iv) In the event Sellers elect to cure any objections Purchaser makes
to the items described in the Title Commitments, then Sellers shall pay the cost
of obtaining and recording any releases necessary to deliver title to the
Sellers' Assets in accordance with the terms of this Agreement; and
(v) Purchaser shall pay or shall cause NHP to pay any costs and fees
associated with the assumption of the Existing Financing.
(b) PRORATIONS AND ADJUSTMENTS.
(i) All revenues (including but not limited to rent due from the
residents of the Facilities) and expenses (including but not limited to payroll
and employee benefits) related to the ownership or operation of the Sellers'
Assets shall be prorated as of the Closing Date, with Sellers responsible
therefor for the period prior to the Closing Date and with Purchaser responsible
therefor for the period from and after the Closing Date.
(ii) Real and personal property taxes shall be prorated as of the
Closing on the basis that Sellers shall be charged for any taxes which are to be
paid by Purchaser after Closing but which relate to the period prior to Closing
(whether or not the amounts subject to such proration are included in the
Reserves for which payment is made by Purchaser or NHP pursuant to Section
2(a)(i)) and that Sellers shall get a credit at Closing for any taxes paid by
Sellers prior to Closing but which relate to the period from and after
Closing(whether or not the amounts subject to such proration are included in the
Reserves for which payment is made by Purchaser or NHP pursuant to Section
2(a)(i)).
(iii) Sellers shall cause the managers of the Facilities to arrange for
a final statement with respect to all utilities serving the Real Property and
the Facilities as of the Closing Date and, within sixty (60) days after the
Closing Date or earlier if required to avoid the imposition of any liens against
the Facilities, shall pay all fees identified thereon and Purchaser shall
arrange for all such utilities to be billed in its name from and after the
Closing Date and shall pay all fees due therefor as of the Closing Date.
Purchaser shall pay to Seller at Closing an amount equal to the outstanding
utilities deposits paid by Seller to utility providers with respect to the
Facilities as set forth more fully in Exhibit E hereto.
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(iv) In the event Purchaser receives a credit against its license
application fees for any amounts paid by Sellers for the period covered by
Purchaser's license, Purchaser shall remit to Sellers at closing an amount equal
to such credit.
(v) All amounts due and owing between each of the Sellers, on the one
hand, and the Purchaser or ESC, as applicable, on the other hand, under the
Management Agreements including, but not limited to, management fees due to
Purchaser or ESC, the reimbursement by the applicable Seller of any expenses
advanced by Purchaser or ESC on behalf of such Seller during the course of the
management of the Facility owned by such Seller, the reimbursement by Purchaser
or ESC, as applicable, of any expenses paid by the applicable Seller that relate
to the period after Closing and any amounts owing from Sellers under the
Emeritus Pooled Liability and Workers Compensation/Occupational Injury Insurance
Programs (the "Programs") with respect to the participation of the Facilities,
other than the Essington Manor Facility, in the Programs (but specifically
excluding the Termination Security Payment or amounts due with respect to tail
insurance, which amounts Purchaser has agreed to waive in its capacity as the
administrator of the Programs) shall be reconciled on a Facility by Facility
basis and a final payment shall be due from Purchaser to the applicable Seller
or from the applicable Seller to Purchaser, as applicable, within sixty (60)
days after the Closing which includes such Facility.
(vi) Purchaser shall receive a credit at each applicable Closing
against the Purchaser Cash Payment for the amounts due to Purchaser from the
applicable Seller for the cost of certain repairs to the Facilities as set forth
more fully in Exhibit G.
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6. POSSESSION
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On the Closing Date, Sellers shall deliver to Purchaser and/or NHP
possession of the Facilities, subject only to rights of residents of the
Facilities and the rights of Sellers under the Interim Subleases, if applicable,
free and clear of all liens, claims and charges other than the Permitted
Exceptions (as defined below).
7. REPRESENTATIONS AND WARRANTIES OF SELLER
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Each of the Sellers does hereby warrant and represent to Purchaser on
behalf of itself and not on behalf of any other Seller that:
(a) AUTHORITY. Such Seller has full power and authority to execute and
deliver this Agreement and all related documents, and to carry out the
transactions contemplated herein. This Agreement is valid, binding and
enforceable against such Seller in accordance with its terms, except as such
enforceability may be limited by creditors' rights laws or general principals of
equity. The execution of this Agreement and the consummation of the
transactions contemplated herein do not result in a breach of the terms and
conditions of nor constitute a default under or violation of such Seller's
corporate formation documents or of any law, regulation, court order, mortgage,
note, bond, indenture, agreement, license or other instrument or obligation to
which such Seller is now a party or by which such Seller or any of the assets of
such Seller may be bound or affected.
(b) NECESSARY ACTION. Such Seller will make all reasonable efforts,
with all due diligence, to take all action and obtain all consents prior to the
Closing Date necessary for it to lawfully enter into and carry out the terms of
this Agreement, including, but not limited to, providing any notice of the sale
of the Facility owned by it to the residents of the Facility or any governmental
agency or authority, required to be provided by such Seller in its capacity as
the licensed operator of the Facility owned by it to the extent such notice from
Seller may be required by law.
(c) LITIGATION. Except as otherwise described in Exhibit H attached
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hereto, there are no claims, actions, suits, investigations or proceedings
pending or, to the knowledge of such Seller, threatened by or before any court,
administrative agency or other governmental authority or any arbitrator against
or relating to such Seller or with respect to its ownership or the operation of
the Facility owned by it. The transactions contemplated herein have not been
challenged by any governmental agency or any other person, nor does such Seller
know or have reasonable grounds to know, of any basis for any such actions,
suits or proceedings.
(d) STATUS OF SELLER. Such Seller is duly formed, organized, validly
existing and in good standing under the laws of the State of its formation as
set forth in the introductory paragraph of this Agreement and is in good
standing under the laws of the State in which the Facility owned by it is
located if other than the state of its formation.
(e) THE FACILITIES. The Facility owned by such Seller is an assisted
living/independent living facility known as and located at the addresses set
forth on Exhibit B.
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(f) HAZARDOUS MATERIALS. During the time in which such Seller has
owned the Real Property and the Facility owned by it, such Seller has not used,
generated, transported, treated, constructed, deposited, stored, disposed,
placed or located at, on, under or from such Real Property or Facility any
flammable explosives, radioactive materials, hazardous or toxic substances,
materials or wastes, pollutants or contaminants defined, listed or regulated by
any local, state or federal environmental laws.
(g) CONDEMNATION. There is presently no pending or, to the best of
such Seller's knowledge, contemplated or threatened, condemnation of the
Facility owned by such Seller or any part thereof.
(h) DISCLOSURE. Such Seller has not failed to disclose to Purchaser any
material and adverse fact or condition regarding this Agreement, the Sellers'
Assets which are owned by it or the Transaction and no representation or
warranty by such Seller contained in this Agreement and no statement contained
in any certificate, list, exhibit, or other instrument furnished or to be
furnished to Purchaser pursuant hereto, or in connection with the Transaction,
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 not misleading. All information to be
disclosed by such Seller hereunder shall be true and correct in all material
respects, will not contain any misstatement of any material fact, and shall not
omit to state any material fact necessary to make such information not
misleading.
(i) ESSINGTON MANOR. In addition to the foregoing, Seller, Joliet
Assisted, L.L.C. ("Joliet") makes the following representations with respect to
the Facility located in Joliet, Illinois and commonly known as the Manor at
Essington (the "Essington Manor Facility"):
(i) Joliet has no notice or knowledge that the Essington Manor Facility
and its operation and use are not in compliance with all applicable municipal,
county, state and federal laws, regulations, statutes, ordinances, standards and
orders and all administrative rulings and with all municipal, health, building,
land use and zoning laws and regulations where the failure to comply therewith
could have a material adverse effect on the business, property, condition
(financial or otherwise) or operation of such Facility;
(ii) Joliet has no notice or knowledge that there are any outstanding
deficiencies or work orders of any authority having jurisdiction over the
Essington Manor Facility requiring conformity to any applicable statute,
regulation, ordinance or by-law;
(iii) Joliet has no notice or knowledge of any claims, requirement or
demand of any licensing or certifying agency supervising or having authority
over the Essington Manor Facility or otherwise to rework or redesign it or to
provide additional furniture, fixtures, equipment or inventory so as to conform
to or comply with any exiting law, code or standard which has not been fully
satisfied prior to the date hereof or which will not be satisfied prior to the
Closing;
(iv) Joliet has not received any notice from any governmental body
claiming a violation of any building, zoning, environmental or other laws or
ordinances;
(v) The Essington Manor Facility is not licensed under Illinois law nor
is it required to be licensed under Illinois law in order to provide the
services currently provided to the residents of the Facility.
(vi) A true and correct list of all operating contracts and equipment leases
to which Joliet or, to the best of its knowledge, XL is a party in
connection with its ownership and/or XL's operation of the Essington Manor
Facility (collectively, the "Operating Contracts") will be provided to Purchaser
within five (5) days after the Execution Date and true and correct copies of the
Operating Contracts will be provided to provided to Purchaser within ten (10)
days after the Execution Date. Each of the Operating Contracts to which such
Joliet is a party and, to the best knowledge of Joliet, each of the Operating
Contracts to which XL is a party, is in full force and effect and none of the
Operating Contracts to which Joliet is a party, and to the best knowledge of
Joliet, none of the Operating Contracts to which XL is a party, has been
modified or amended. Joliet has no notice or knowledge that it, XL or the
Essington Manor Facility is in default of any obligations under the Operating
Contracts nor is Joliet aware of any default or any action which, with the
passage or time or the giving of notice or both would constitute a default,
under the Operating Contracts by any other party thereto.
(vii) Joliet has no notice of knowledge that any of the employees
of the Essington Manor Facility are members of a labor union or subject to any
collective bargaining agreement nor, to the best of Joliet's knowledge, are any
such employees engaged in any union organizing activities. Joliet is not a
party, nor to the best of its knowledge is XL a party, to any labor dispute or
grievances with any of the employees of the Essington Manor Facility.
(viii) Joliet has provided Purchaser with a true and correct copy of
the Certificate of Occupancy for the Essington Manor Facility.
For purposes of the representations and warranties of the Sellers set forth
in this Section 7 (other than those set forth in Section 7(i) as to which this
limitation shall not apply), (A) no Seller will be deemed to have "knowledge" of
any information which is known to Purchaser or ESC, in its capacity as the
manager of a Facility, if such information has not been reported or delivered to
the applicable Seller by Purchaser or ESC and (B) no Seller shall be in breach
of its representations and warranties set forth in this Section 7 if Purchaser
or ESC, in its capacity as the manager of a Facility, has actual knowledge that
a representation or warranty of the applicable Seller is not true but
nonetheless elects to proceed with Closing the Transaction with respect to the
Facility owned by such Seller.
8. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
-----------------------------------------------
Purchaser hereby warrants and represents to Sellers that:
(a) ORGANIZATION. Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the State of Washington and is
duly qualified to do business as a foreign corporation and in good standing in
each of the states in which the Facilities are located.
(b) AUTHORITY. Purchaser 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 the same do not result in a breach of the
terms and conditions of nor constitute a default under or violation of any law,
regulation, court order, mortgage, note, bond, indenture, agreement, license or
other instrument or obligation to which Purchaser is a party or by which
Purchaser or any of its assets may be bound or affected. This Agreement is
valid, binding and enforceable as against Purchaser in accordance with its
terms, except as such enforceability may be limited by applicable creditors'
rights, laws or principles of equity.
(c) LITIGATION. There is no litigation, investigation or other
proceeding pending or threatened against or relating to Purchaser, its
properties or business which is material to this Agreement, or which would
prevent Purchaser from performing its obligations hereunder.
(d) NECESSARY ACTION. Purchaser will make all reasonable efforts, with all
due diligence, to take all action and obtain all consents prior to Closing
necessary for it to lawfully enter into and carry out the terms of this
Agreement.
9. BROKERS
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Each of the Sellers and Purchaser each represent, covenant, and warrant to
the other that each has employed no broker or finder in connection with the
transaction contemplated herein. Each Seller agrees to indemnify and hold
Purchaser harmless from and against all liability, claims, demands, damages or
costs of any kind, including attorneys' fees, arising from or connected with any
broker's commission or finder's fee or commission or charge claimed to be due
any person arising from such Seller's conduct with respect to this transaction.
Purchaser agrees to indemnify and hold each Seller harmless from and against all
liability, claims, demands, damages or costs of any kind, including attorneys'
fees, arising from or connected with any broker's commission or finder's fee or
commission or charge claimed to be due any person arising from Purchaser's
conduct with respect to this transaction.
10. SELLERS' COVENANTS
-------------------
(a) PRE-CLOSING. Between the date hereof and the Closing Date, except
as contemplated by this Agreement or with the consent of Purchaser, each of the
Sellers does hereby covenant as follows on behalf of itself and not on behalf of
the other Sellers:
(i) Such Seller will not enter into any contract, commitment or
agreement affecting the Sellers' Assets owned by such Seller except in the
ordinary course of business and such Seller will advise Purchaser of any
contracts or commitments which it enters, whether in the ordinary course of
business or otherwise;
(ii) Such Seller will provide Purchaser and NHP and their agents and
employees with access to the Facility owned by it and to the books and records
of such Facility for the purpose of enabling Purchaser to conduct its Due
Diligence Review; provided, however, that such access and inspection shall be
with at least 24 hours prior notice and during normal business hours at such
time and in such manner as the parties shall reasonably agree upon;
(iii) Such Seller will not take any action inconsistent with its
obligations under this Agreement or which could hinder or delay the consummation
of the transactions contemplated by this Agreement;
(iv) Such Seller will maintain the Seller's Assets owned by it in
substantially the same condition as they are in as of the Execution Date,
ordinary wear and tear excepted;
(v) Such Seller will promptly notify Purchaser of any changes affecting
the validity or accuracy of its representations and warranties of which it
becomes aware prior to the Closing Date;
(vi) Such Seller shall negotiate in good faith with Purchaser the terms
of one or more Subleases (the "Interim Subleases") under which the applicable
Sellers will sublease from Purchaser any of the Facilities which, as of the
Closing Date are not licensed in the name of Purchaser until such time as a
license for such Facility or Facilities is issued in the name of Purchaser (the
"Licensure Date"), subject to Purchaser's right to continue to operate the
affected Facility or Facilities under the applicable Management Agreement, as
amended by the applicable Management Agreement Amendment.
(vii) Such Seller shall negotiate in good faith with Purchaser with
respect to the terms of the Management Termination Agreements, the Management
Amendment Agreements and the Note.
(viii) In the case of the owners of the Facilities secured by the
Existing Financing, such Seller shall, upon request, cooperate in NHP's efforts
to secure the consents needed to assume the Existing Financing, it being
understood and agreed that such Seller's obligations with respect thereto shall
be limited to the cooperation obligation described herein and that such Seller
has not assumed, in any manner, responsibility for securing the consent of the
lender to the assumption of the Existing Financing.
In addition, Joliet covenants that between the Effective Date and the
Closing Date it will do the following:
(i) Maintain in force the existing hazard and liability insurance
policies, or comparable coverage, for the Seller's Assets owned by it;
(ii) Cause XL to maintain and operate the Essington Manor Facility in
the ordinary course and in compliance with the terms of the Essington Manor
Management Agreement; and
(iii) Make available to Purchaser the regular, internally prepared and
un-audited monthly financial statements, including the income statement and
balance sheet, regarding the Essington Manor Facility as and when they
customarily become available to Joliet.
(b) CLOSING. At the Closing, each of the Sellers agrees that it will:
(i) Execute and deliver such endorsements, assignments and other
instruments of transfer and conveyance as shall be reasonable or necessary to
transfer and assign the Sellers' Assets to Purchaser as herein provided,
conveying title to the Real Property and the Facilities subject only to the
Permitted Exceptions (as hereinafter defined) and conveying to title to the
remainder of the Sellers' Assets free and clear of all liens and encumbrances;
(ii) Deliver to Purchaser a certificate dated as of the date of Closing
certifying in such detail as Purchaser may reasonably specify that such Seller's
representations and warranties contained in this Agreement or in any certificate
or document delivered in connection with this Agreement or the transactions
contemplated herein are true at and as of the date of Closing as though such
representations and warranties were then again made and that such Seller shall
have performed its obligations under this Agreement that are to be performed
prior to or at Closing;
(iii) Pay for any of the costs and expenses identified in Paragraph 5
for which it is responsible;
(iv) Deliver the documents described in Section 4(a) to which such Seller is
a party.
(c) POST-CLOSING. After the Closing, each of the Sellers agrees that
it will take such actions and properly execute and deliver to Purchaser such
further instruments of assignment, conveyance and transfer as, in the reasonable
opinion of counsel for Purchaser, may be necessary to assure, complete and
evidence the full and effective transfer and conveyance of Sellers' Assets and
the continued licensing of the Facilities.
11. PURCHASER'S COVENANTS
----------------------
(a) PRE-CLOSING. Between the date hereof and the Closing, except as
contemplated by this Agreement or with the consent of Sellers', Purchaser agrees
that:
(i) Purchaser will not take any action inconsistent with its
obligations under this Agreement or which could hinder or delay the consummation
of the transaction contemplated by this Agreement;
(ii) Purchaser will make all reasonable efforts, with all due
diligence, to obtain all consents, approvals and licenses necessary to permit
the consummation of the transaction contemplated by this Agreement and/or
necessary to permit Purchaser to own and operate the Facilities as of the
Closing Date; provided, however, Purchaser shall not be deemed to be in breach
of its obligations under this Section 11(a)(ii) in the event it is not licensed
by Closing to operate any or all of the Facilities;
(iii) Purchaser will proceed with all due diligence and at its sole
cost and expense to conduct such investigations with respect to Sellers' Assets
as it deems to be reasonably necessary in connection with its purchase thereof,
including, but not limited to, zoning investigations, soil studies,
environmental assessments, seismic assessments, wetlands reports, appraisals,
investigations of Sellers' and the Facilities' books and records and operations,
dry rot and termite inspections and structural inspections, provided no
investigations will be physically intrusive on the Real Property or the
Facilities unless Sellers consent thereto, which consents shall not be
unreasonably withheld (the "Due Diligence Review"); provided, however, that
Purchaser shall maintain the confidentiality of any documents or information
obtained by it from Sellers during the course of its Due Diligence Review and
shall return the same to Sellers in the event the transaction provided for
herein fails to close for any reason whatsoever. Furthermore, Purchaser shall
indemnify, defend and hold Sellers and the Sellers' Assets harmless of and from
any and all losses, liabilities, costs, expenses (including without limitation,
reasonable attorney's fees and costs of court at trial and on appeal), damages,
liens, claims (including, without limitation mechanics' or materialmans' liens
or claims of liens), actions and causes of action arising from or relating to
Purchaser (or Purchaser's agents, employees, or representatives) entering on the
Real Property and/or the Facilities to test, study, investigate or inspect the
same or any part thereof, whether pursuant to this paragraph or otherwise or
from a breach by Purchaser of its confidentiality obligations hereunder. The
foregoing indemnity shall expressly survive the Closing or the earlier
termination of this Agreement;
(iv) Prior to the Closing with respect to the Essington Manor Facility,
Purchaser will advise Sellers in writing which, if any of the Operating
Contracts it elects to assume as of the Closing Date (the "Assumed Operating
Contracts");
(v) Purchaser will negotiate in good faith with Sellers with respect to
the terms of the Management Termination Agreements, the Management Amendment
Agreements, the Notes and the Interim Subleases; and
(vi) Purchaser will continue to manage or to cause ESC to manage the
Facilities, other than the Essington Manor Facility, in accordance with the
terms of the Management Agreements.
(b) CLOSING. At the Closing, Purchaser agrees that it will:
(i) Pay or cause NHP to pay the cash due under Sections 2(a)(ii) and
2(b)(ii);
(ii) Deliver to Sellers a Certificate dated as of the date of Closing
certifying in such detail as Sellers may reasonably specify the fulfillment of
the conditions set forth in Paragraph 13(b)(i);
(iii) Pay for any of the costs and expenses specified in Paragraph 5
for which it is responsible;
(iv) Deliver or caused to be delivered the documents described in
Section 4(b).
(c) POST-CLOSING. After the Closing, Purchaser agrees that it will
take such actions and properly execute and deliver such further instruments as
Sellers may reasonably request to assure, complete and evidence the transactions
provided for in this Agreement.
12. MUTUAL COVENANTS
-----------------
Following the execution of this Agreement, Purchaser and Sellers agree:
(a) If any event should occur, either within or without the knowledge
or control of Purchaser or Sellers which would prevent fulfillment of the
conditions to the obligations of any party hereto to consummate the transactions
contemplated by this Agreement, to use its or their reasonable efforts to cure
the same as expeditiously as possible.
(b) To cooperate fully with each other in preparing, filing,
prosecuting, and taking any other actions which are or may be reasonable and
necessary to obtain the consent of any governmental instrumentality or any third
party or to accomplish the transactions contemplated by this Agreement.
(c) To effect in a timely fashion all pro-rations contemplated in this
Agreement.
13. CONDITIONS PRECEDENT TO CLOSING
----------------------------------
(a) PURCHASER'S CONDITIONS. Purchaser's obligation to purchase
Sellers' Assets hereunder is subject to the following conditions, any one or all
of which may be waived by Purchaser:
(i) TITLE AND SURVEY REVIEW.
(A) As of the Execution Date, (i) Purchaser has caused to be
delivered to Seller title reports or commitments (the "Title Commitments") for
extended coverage title insurance policies with respect to the Real Property
issued by the Title Company, along with legible copies of all of the exception
documents referenced therein with respect to each of the Facilities and (ii)
Purchaser has ordered a litigation, bankruptcy, judgment and security interest
search in the names of the Sellers, the Facilities, XL, in the case of the
Essington Manor Facility, and Purchaser and ESC in the case of the remaining
Facilities (the "Litigation and Lien Search").
(B) As of the Execution Date, Purchaser has ordered ALTA surveys
with respect to any of the Real Property not covered by the Existing Surveys
(the "New Surveys"), which are being prepared by surveyors acceptable to
Purchaser (the "Surveyors") and Purchaser has requested that the Existing
Surveys be recertified to Purchaser, NHP and the Title Company (the "Recertified
Surveys" and together with the New Surveys, the "Surveys"), with, in each case,
the intent of the parties being that at Closing Purchaser will receive ALTA
Surveys which are sufficient to cause the Title Company to issue the Title
Policies (as defined below) without the survey exception or, in the case of the
portion of the Real Property located in Texas, with the survey exception limited
to shortages in area (the "Surveys"). The New Surveys shall be certified to the
Purchaser, Sellers, the Title Company and NHP and, upon completion thereof,
Purchaser shall cause the New Surveys and the Recertified Surveys to be
delivered by the Surveyors to Purchaser, Sellers, the Title Company and NHP.
(C) Prior to Closing, in the case of any of the Facilities which are
subject to an anticipated March 31, 2004 Closing, and within five (5) business
days, in the case of any of the Facilities which are subject to an anticipated
Closing subsequent to March 31, 2004, after Purchaser's receipt of the last of
the Title Commitment (including legible copies of all of the exception documents
referenced therein), the results of the Litigation and Lien Search and the
Survey with respect to a Facility, Purchaser shall advise the applicable Seller
in writing on a Facility by Facility basis of its objections, if any, to the
matters reflected therein (a "Title and Survey Objection Letter").
(D) Prior to Closing, in the case of any of the Facilities which
are subject to an anticipated March 31, 2004 Closing, and within five (5)
business days after the applicable Seller's receipt of the Title and Survey
Objection Letter related to the Facility owned by it, in the case of any of the
Facilities which are subject to an anticipated Closing subsequent to March 31,
2004, such Seller shall specify by written notice delivered to Purchaser which
of the objections described therein it will correct at or prior to the Closing
Date and which of such objections it is unable or elects not to correct at or
prior to the Closing Date (the "Seller Title and Survey Response Notice"). If
any Seller fails to deliver a Seller Title and Survey Response Notice prior to
Closing or within the applicable five (5) day period, as applicable, such
Sellers shall be deemed to have elected not to correct any of the matters to
which Purchaser objected in the applicable Title and Survey Objection Letter. If
a Seller elects or is deemed to have elected not to correct some or all of the
matters objected to in the applicable Title and Survey Objection Letter,
Purchaser shall have until Closing, in the case of any of the Facilities which
are subject to an anticipated March 31, 2004 Closing, or within five (5) days
after the receipt of a Seller Title and Survey Response Notice or after the date
by which the Seller Title and Survey Response Notice was due in accordance with
the terms hereof , in the case of any of the Facilities which are subject to an
anticipated Closing subsequent to March 31, 2004, in which to advise the
applicable Seller of its decision to close, notwithstanding the defects which
such Seller is unable, or has elected not, to correct, or of its election to
terminate this Agreement either in its entirety or solely as to the affected
Facility(ies). In the event Purchaser elects to terminate this Agreement as a
result of the existence of title, survey or defects which a Seller elects not,
or is unable, to correct by Closing, neither party shall have any further rights
or obligations hereunder.
(E) Any matter reflected on the Title Commitments or in the
results of the Litigation and Lien Search or on the Surveys and not objected to
by Purchaser or as to which Purchaser waives its objections in accordance with
the terms hereof, shall be deemed accepted by Purchaser and shall for purposes
hereof be deemed to be the "Permitted Exceptions."
(F) At Closing, Sellers shall cause the Title Company to issue one or
more extended coverage title insurance policies to Purchaser or NHP insuring
Purchaser's or NHP's title to the Real Property as of the Closing Date subject
to no exceptions other than the Permitted Exceptions in an aggregate amount
equal to the Purchase Price (unless a higher amount of title insurance has been
specified by Purchaser and the additional premium attributable to such higher
amount has been deposited by Purchaser with the Escrow Agent at or prior to
Closing) (the "Owner's Title Policies").
(G) At Closing, the Surveyors shall issue to Purchaser the Surveys of
the Real Property revised to reflect any objections included in the Title and
Survey Objection Letters which Sellers agree to correct in accordance with the
terms hereof and certified in the manner specified herein.
(ii) ASBESTOS AND ENVIRONMENTAL REPORT. As of the Execution Date, Purchaser
has ordered from duly licensed environmental inspection companies reports with
respect to the Facilities indicating (A) the presence (or absence) of asbestos
in each of the Facilities, the level thereof, whether it is friable or
non-friable, if it is friable the recommended steps to correct the problem and
the anticipated cost thereof and (B) the results of a Phase I Assessment of the
Real Property and the Facilities (the "Asbestos and Environmental Reports").
Prior to Closing, in the case of any of the Facilities which are subject to an
anticipated March 31, 2004 Closing and within five (5) business days, in the
case of any of the Facilities which are subject to an anticipated Closing
subsequent to March 31, 2004, after Purchaser's receipt of the Asbestos and
Environmental Reports (the "Environmental Review Period") Purchaser shall
approve or disapprove each of the Asbestos and Environmental Reports in
Purchaser's sole and absolute discretion. Should Purchaser disapprove the
Asbestos and Environmental Reports, it shall notify the applicable Seller in
writing of such disapproval and the reasons therefor at or prior to the
expiration of the Environmental Review Period (the "Environmental Notice"). If
any Seller advises Purchaser prior to Closing, in the case of any of the
Facilities which are subject to an anticipated March 31, 2004 Closing, or within
five (5) business days, in the case of any of the Facilities which are subject
to an anticipated Closing subsequent to March 31, 2004, after their receipt of
Purchaser's Environmental Notice that such Sellers is unwilling or unable to
remedy all such objections prior to the Closing Date, Purchaser shall have until
Closing, in the case of any of the Facilities which are subject to an
anticipated Closing on March 31, 2004, or (2) business days thereafter, in the
case of any of the Facilities which are subject to an anticipated Closing
subsequent to March 31, 2004, in which to advise the applicable Seller in
writing of its election either to waive the matters to which it has objected and
which Sellers are unwilling or unable to remedy or to terminate this Agreement
either in its entirety or solely as to the affected Facility(ies). Seller's
failure to respond to the Environmental Notice by Closing or within such five
(5) business day period, as applicable, shall be deemed to be Seller's notice to
Purchaser that it is unable or unwilling to remedy the objections set forth in
the Environmental Notice. Notwithstanding the foregoing, in the event Purchaser
has not advised Seller (i) by March 30, 2004 with respect to any of the
Facilities, other than the Autumn Ridge Facility, the Essington Manor Facility
and the Facility located in Everett, Washington and known as Arbor Place (the
"Arbor Place Facility") or (ii) by April 15, 2004 with respect to the Autumn
Ridge Facility, the Essington Manor Facility and the Arbor Place Facility that
it is not satisfied with this condition, this condition shall be deemed to be
satisfied as of such date.
(iii) DUE DILIGENCE REVIEW. Purchaser shall be satisfied with the results
of the Due Diligence Review; provided, however, if Purchaser is not satisfied
with the results of its Due Diligence Review, Purchaser shall have the right to
terminate this Agreement either in its entirety or solely as to the affected
Facility(ies). Notwithstanding the foregoing, in the event Purchaser has not
advised Seller (i) by March 30, 2004 with respect to any of the Facilities,
other than the Autumn Ridge Facility, the Essington Manor Facility and the
Facility located in Everett, Washington and known as Arbor Place (the "Arbor
Place Facility") or (ii) by April 15, 2004 with respect to the Autumn Ridge
Facility, the Essington Manor Facility and the Arbor Place Facility that it is
not satisfied with this condition, this condition shall be deemed to be
satisfied as of such date.
(iv) REGULATORY APPROVAL; LICENSING. Either (i) the approval of the
transaction by the appropriate regulatory and licensing authorities and agencies
of the states where each of the Facilities is located, including receipt by
Purchaser of all consents, approvals, licenses and certificates as may be
necessary for Purchaser lawfully to own and operate the Facilities or (ii) the
execution and delivery by the applicable Seller of the Interim Sublease and
Management Agreement Amendment with respect to any Facility for which Purchaser
does not hold a license in its own name as of the Closing Date.
(v) DAMAGE AND CONDEMNATION. Prior to the Closing Date, the risk of
physical loss to the Sellers' Assets shall be borne by Sellers. Accordingly, it
shall be a condition to Purchaser's obligation hereunder that prior to the
Closing Date, no material portion of any of the Facilities nor any material
portion of any of the Sellers' Assets shall have been damaged or destroyed by
fire or other casualty, or shall have been taken or condemned by any public or
quasi-public authority under the power of eminent domain, in any such case to an
extent which causes the affected Facility(ies) to lose use of any of its
licensed beds/units or to become impracticable to operate as of the Closing Date
or the postponement thereof, if applicable. If the Sellers' Assets shall have
been so damaged or destroyed and Purchaser waives this condition, the applicable
Seller shall assign to Purchaser all of its rights to any insurance proceeds in
the connection therewith and the Purchase Price shall be reduced by any
deductible which Purchaser shall be required to pay in connection with such
damage or destruction or by any uninsured costs of repair or reconstruction. If
the Sellers' Assets shall be so taken or condemned prior to Closing, and if
Purchaser waive this condition, Sellers shall pay or assign to Purchaser all
Sellers' right to the proceeds of any condemnation award in connection thereof
and the Purchase Price shall be reduced by such amount as may be agreed upon by
the applicable Seller and Purchaser as a reasonable estimate of the amount by
which the cost to repair the portion of the Sellers' Assets affected by such
taking exceeds such condemnation award; provided, however, if the applicable
Seller and Purchaser are unable to so agree by the Closing, then Purchaser may
exercise its right to terminate this Agreement pursuant to the immediately
following sentence. Purchaser may, however, in lieu of closing, elect to
exercise its rights under Paragraph 15(a) (iii) with respect to the affected
Facility or Facilities if a material portion of the Seller's Assets is damaged,
destroyed or taken prior to the Closing Date but such election shall not affect
Purchaser's obligation to purchase, or Sellers' obligation to sell, the
remainder of the Sellers' Assets in accordance with the terms of this Agreement.
(vi) NO DEFAULTS. (VI) NO DEFAULTS. Sellers shall not be in
default under any mortgage, contract, lease or other agreement affecting or
relating to the Sellers' Assets including, but not limited to, the documents
evidencing or securing the Existing Financing. provided, however, if such a
default exists, Purchaser shall have the right to terminate this Agreement
either in its entirety or solely as to the affected Facility(ies)
(vii) SELLERS' PERFORMANCE. (VII) SELLER'S PERFORMANCE. Each
Seller shall have performed all of its obligations under this Agreement that are
to be performed prior to or at Closing to the extent the same have not been
waived by Purchaser in accordance with the terms hereof; provided, however, if
Seller has not performed its obligations under this Agreement, Purchaser shall
have the right to terminate this Agreement either in its entirety or solely as
to the affected Facility(ies).
(viii) SELLERS' REPRESENTATIONS AND WARRANTIES. (VIII) SELLER'S
REPRESENTATIONS AND WARRANTIES. Sellers' representations and warranties
contained in this Agreement or in any certificate or document delivered in
connection with this Agreement or the transactions contemplated herein shall be
true in all material respects at and as of the date of Closing as though such
representations and warranties were then again made; provided, however, if
Seller's representations and warranties are not materially true at Closing,
Purchaser shall have the right to terminate this Agreement either in its
entirety or solely as to the affected Facility(ies).
(ix) NO MATERIAL ADVERSE CHANGE. There shall be no material adverse
change in the financial or physical condition or results of operations of each
of the Facilities unless Sellers are able to demonstrate that such change is due
to a breach by Purchaser or ESC of its obligations under the Management
Agreements.
(x) BOARD APPROVAL. Purchaser shall have secured the approval of the
Transaction by its Board of Directors.
(xi) THE EXISTING FINANCING. In the case of the Facilities secured by the
Existing Financing, NHP shall have secured the consent of the lender to the
assumption of the Existing Financing.
For the avoidance of doubt, in the event that as of the Closing, any of the
foregoing conditions to Closing have been satisfied as to some, but not all, of
the Facilities, Purchaser shall have the right to either (A) waive the
condition(s) which has not been satisfied and proceed with the Closing or (B)
terminate this Agreement in its entirety or (C) terminate this Agreement solely
as to the Facilities with respect to which the condition(s) to Closing has not
been satisfied.
(b) SELLERS' CONDITIONS. Sellers' obligation to sell Sellers' Assets
hereunder is subject to the fulfillment of each of the following conditions, any
one or all of which may be waived by Seller in writing:
(i) PURCHASER'S REPRESENTATIONS AND WARRANTIES. (i) Purchaser's
Representations and Warranties. Purchaser's representations and warranties
contained in this Agreement or in any certificate or document delivered in
connection with this Agreement or the transactions contem-plated herein shall be
true in all material respects at and as of the date of Closing as though
such representations and warranties were then again made; provided, however, if
Purchaser's representations and warranties are not materially true at Closing,
Seller shall have the right to terminate this Agreement either in its entirety
or solely as to the affected Facility(ies).
(ii) PURCHASER'S PERFORMANCE. (ii) Purchaser's
Performance. Purchaser shall have performed its obligations under this
Agreement that are to be performed prior to or at Closing to the extent the same
have not been waived by Seller in accordance with the terms hereof; provided,
however, if Purchaser has not performed its obligations hereunder at Closing,
Purchaser shall have the right to terminate this Agreement either in its
entirety or solely as to the affected Facility(ies).
(iii) THE ARBOR PLACE FACILITY. With respect to the Arbor Place
Facility, the applicable Seller shall have secured the consent of its partner to
the sale of the Facility; provided, however, if this condition has not been
satisfied by April 30, 2004 it shall be deemed to have become incapable of being
satisfied and the applicable Seller shall thereafter have no further obligation
to sell, nor shall Purchaser or NHP have any further obligation to purchase from
the applicable Seller, the Arbor Place Facility
For the avoidance of doubt, in the event that as of the Closing, any of the
foregoing conditions to Closing have been satisfied as to some, but not all, of
the Facilities, Seller shall have the right to either (A) waive the condition(s)
which has not been satisfied and proceed with the Closing or (B) terminate this
Agreement in its entirety or (C) terminate this Agreement solely as to the
Facilities with respect to which the condition(s) to Closing has not been
satisfied; provided, however, if, as a result of the exercise by Seller of its
rights under clause (C), the aggregate number of Facilities which Seller
proposes to convey to Purchaser at Closing is less than five (5), Purchaser
shall have the option of terminating this Agreement in its entirety.
14. INDEMNIFICATION
---------------
(a) BY SELLERS. Each Seller shall indemnify, defend and hold harmless
Purchaser from and against any and all costs, losses, damages, liabilities and
obligations arising from or related to:
(i) The ownership and/or operation by such Seller of the portion of the
Sellers' Assets owned by it which exist as of the Closing Date, except to the
extent Purchaser is responsible for such costs, losses, damages, liabilities and
obligations under the terms of the Management Agreements, in which case Seller
shall have no indemnity obligation to Purchaser by virtue of the terms of this
Section 14(a);
(ii) Any misrepresentation, breach of warranty or non-fulfillment of
any agreement or covenant on the part of such Seller under this Agreement or
from any misrepresentation in or omission from any certificate furnished or to
be furnished by such Seller to Purchaser hereunder;
(iii) Any litigation, investigations or other proceedings pending or
threatened against or relating to the Facility owned by such Seller or the
business being conducted thereon or against or relating to such Seller, its
properties or business, including but not limited to any such litigation,
investigations or other proceedings which may be disclosed to Purchaser in this
Agreement, or any exhibit attached to this Agreement, or otherwise; and
(iv) Any and all actions, suits, proceedings, demands, assessments,
judgments, costs and legal and other expenses, including, but not limited to,
reasonable attorney's fees, incident to any of the foregoing;
For purposes of this Paragraph 14, an obligation shall be deemed to "exist" as
of the Closing if it relates to events which occurred prior to the Closing even
if it is not asserted until after the Closing.
(b) BY PURCHASER. Purchaser shall indemnify, defend and hold Sellers
harmless from and against any and all costs, losses, damages, liabilities and
obligations arising from or related to:
(i) Except as otherwise provided in this Agreement, the ownership and
operation of the Sellers' Assets from and after the Closing Date;
(ii) Any misrepresentation, breach of warranty or non-fulfillment of any
agreement on the part of Purchaser under this Agreement or from any
misrepresentation in or omission from any certificate furnished or to be
furnished by Purchaser to Sellers hereunder; and
(iii) Any and all actions, suits, proceedings, demands, assessments,
judgments, costs and legal and other expenses, including, but not limited to,
reasonable attorney's fees, incident to any of the foregoing.
15. TERMINATION
-----------
(a) GROUNDS FOR TERMINATION. This Agreement may be terminated and the
transaction contemplated herein abandoned at any time prior to Closing:
(i) By mutual written agreement of the parties;
(ii) By Sellers, if any of the conditions set forth in Paragraph 13(b)
shall have become incapable of fulfillment prior to the Closing Date or such
earlier date as may be specifi-cally provided for the performance thereof (as
the same may be extended) through no fault of Sellers and the same shall not
have been waived by Sellers;
(iii) By Purchaser, if any of the conditions set forth in Paragraph 13(a)
shall have become incapable of fulfillment prior to the Closing Date or such
earlier date as may be specifi-cally provided for the performance thereof (as
the same may be extended) through no fault of Purchaser or ESC hereunder or
under the Management Agreements and the same shall not have been waived by
Purchaser;
(iv) By either Sellers or Purchaser in the event of a material breach by the
other party of its obligations hereunder;
(v) By either Sellers or Purchaser if the Closing has not occurred by the
Closing Date specified in Paragraph 3 as the same may be extended in accordance
with the terms thereof; and
(vi) By Purchaser upon Purchaser's receipt of written notification of any
fact which would materially change any of the representations or warranties of
Sellers herein.
Provided, however, in the event either party elects to terminate this
Agreement as to less than all of the Facilities, the non terminating party shall
have the right, on written notice to the terminating party, to terminate this
Agreement in its entirety if, as a result thereof, the number of Facilities
remaining to be conveyed to Purchaser is less than five (5).
(b) SELLERS' REMEDIES UPON TERMINATION. In the event of the
termination of this Agreement by Sellers under Paragraphs 15(a) (ii) or (iv) or
under Paragraph 15(a)(v) in the event the Closing has failed to occur as a
result of a material breach by Purchaser of its obligations hereunder, Purchaser
and Sellers acknowledge and agree as follows:
PURCHASER SHALL PAY TO SELLERS AS SELLERS' SOLE AND EXCLUSIVE REMEDY AN AMOUNT
NOT TO EXCEED SEVEN HUNDRED THOUSAND AND NO/100 DOLLARS ($700,000.00) AS
LIQUIDATED DAMAGES, THE PARTIES ACKNOWLEDGING AND AGREEING THAT THE AMOUNT OF
DAMAGES WHICH SELLERS MAY INCUR AS A RESULT OF SUCH TERMINATION MAY BE DIFFICULT
TO ASCERTAIN AND THAT THE AMOUNT PROVIDED FOR HEREIN IS A REASONABLE AND FAIR
ESTIMATE THEREOF, AFTER WHICH THE PARTIES SHALL HAVE NO FURTHER RIGHTS OR
OBLIGATIONS HEREUNDER. THE LIQUIDATED DAMAGES PROVIDED FOR HEREIN ASSUMES THAT
SELLERS HAVE AGREED TO SELL, AND PURCHASERS HAVE AGREED TO PURCHASE, FOURTEEN
FACILITIES FOR A TOTAL LIQUIDATED DAMAGES AMOUNT PER FACILITY OF FIFTY THOUSAND
AND NO/100 DOLLARS ($50,000). ACCORDINGLY, THE ACTUAL AMOUNT DUE FROM PURCHASER
TO SELLERS SHALL BE FIFTY THOUSAND AND NO/100 DOLLARS ($50,000) PER FACILITY
WHICH IS NOT PURCHASED BY PURCHASER OR NHP AS A RESULT OF A DEFAULT BY PURCHASER
HEREUNDER IT BEING UNDERSTOOD AND AGREED BY SELLERS AND PURCHASER THAT, AMONG
OTHER THINGS, THE INABILITY TO SECURE THE CONSENT OF A LENDER TO THE ASSUMPTION
OF THE EXISTING FINANCING SHALL NOT BE DEEMED TO BE A DEFAULT BY PURCHASER OR
NHP.
_____________________ __________________
Sellers' Initials Purchaser's Initials
(c) PURCHASER'S REMEDIES UPON TERMINATION. In the event Purchaser has the
right to terminate this Agreement by Purchaser under Paragraphs 15(a) (iii) or
(iv) or under Paragraph 15(a) (v) in the event the Closing has failed to occur
as of a material breach by Sellers of their obligations hereunder, Purchaser
shall have the right either to (i) waive the condition or covenant or breach at
issue and proceed with the transaction on the terms contemplated herein or (ii)
seek specific performance of Sellers' obligations hereunder or (iii) terminate
this Agreement and seek to recover from Sellers the actual damages suffered by
Purchaser as a result of such breach. In no event will Sellers be liable to
Purchaser for consequential or incidental damages including, without limitation,
lost profits.
(d) EXPENSES. In the event the transaction contemplated hereby is not
closed for any reason other than a breach by Purchaser or Sellers, Sellers and
Purchaser shall share on a 50-50 basis all escrow cancellation fees and title
charges. In the event the transaction contemplated hereby is not closed as a
result of a breach by Purchaser, Purchaser shall pay all escrow cancellation
fees and title charges and in the event the transaction contemplated hereby is
not closed as a result of a breach by Sellers, Sellers shall pay all escrow
cancellation fees and title charges,
(e) MANAGEMENT AGREEMENTS. In the event the Transaction does not close
for any reason, the rights and obligations of the Sellers and the Purchaser
under the Management Agreements shall remain unaffected.
16. MISCELLANEOUS
-------------
(a) NOTICE. Any notice, request or other communication to be
given by any party hereunder shall be in writing and shall be personally
delivered or sent by registered or certified mail, postage prepaid, by overnight
courier guaranteeing overnight delivery or by facsimile transmission (if
confirmed verbally or in writing by mail as aforesaid), to the following
address:
To Sellers: c/o Columbia Pacific Management, Inc.
600 University Street
Suite 2500
Seattle, WA 98101
Telephone: (206) 728-9063
Facsimile: (206) 728-9327
with a copy to: Tom Barkewitz
Alston, Courtnage & Bassetti, LLP
1000 2nd Avenue
Suite 3900
Seattle, WA 98104
Telephone: (206) 623-7600
Facsimile: (206) 623-1752
To Purchaser: Emeritus Corporation
3131 Elliott Ave, Suite 500
Seattle, WA 98121
Telephone: (206) 298-2909
Facsimile: (206) 301-4500
with a copy to: The Nathanson Group PLLC
1520 Fourth Avenue
Sixth Floor
Seattle, WA 98101
Attn: Randi S. Nathanson
Telephone: 206-623-6239
Facsimile: 206-623-1738
Notice shall be deemed upon the actual receipt or refusal of receipt thereof
regardless of the method of delivery used.
(b) SOLE AGREEMENT. This Agreement may not be amended or modified in
any respect whatsoever except by instrument in writing signed by the parties
hereto. This Agreement constitutes the entire agreement between the parties
hereto and supersedes all prior negotiations, discussions, writings and
agreements between them.
(c) ASSIGNMENT. The terms of this Agreement shall be binding upon and
inure to the benefit of and be enforceable by and against the heirs and
successors of the parties hereto, it being specifically understood and agreed
that at or prior to Closing Purchaser may assign certain of it rights and
obligations hereunder to NHP and/or to Purchaser's affiliate, ESC IV, L.P.
("ESC") and that such assignment shall be permitted without the further consent
of Sellers. Any other assignment shall require the consent of Sellers, which
consent shall not be unreasonably withheld. Sellers acknowledge and agree that
notwithstanding that NHP may be the ultimate purchaser of certain of Seller's
Assets, NHP shall not be liable for the obligations of Purchaser under this
Agreement, including the obligation to pay the Emeritus Purchase Price, except
to the extent NHP specifically assumes for the benefit of Purchaser, but not
Sellers, such obligations under the terms of a Nomination Agreement between
Purchaser and NHP.
(d) CAPTIONS. The captions of this agreement are for convenience of
reference only and shall not define or limit any of the terms or provisions
hereof.
(e) SURVIVAL. All covenants, indemnities, warranties and
representations of Purchaser and Sellers herein shall survive the Closing and
shall continue in effect for a period of two (2) years after Closing with
respect to the Essington Manor Facility and one (1) year after the Closing Date
with respect to the remainder of the Facilities, after which they shall
terminate and be of no further force or effect.
(f) GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Washington.
(g) SEVERABILITY. 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 or enforceability of the remaining provisions hereof
shall not in any way be affected or impaired thereby.
(h) COUNTERPARTS. This Agreement 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.
(i) CONFIDENTIALITY. In the event the Transaction fails to close for
any reason, Purchaser and Sellers agree to keep confidential any proprietary
information disclosed to them by the other party during the course of this
Transaction.
(j) CONSTRUCTION. 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.
(k) ATTORNEYS' FEES. In the event of litigation or other proceedings
involving the parties to this Agreement to enforce any provision of this
Agreement, to enforce any remedy available upon default under this Agreement, or
seeking a declaration of the rights of either party under this Agreement, the
prevailing party shall be entitled to recover from the other such reasonable
attorneys' fees and costs as may be actually incurred, including its costs and
fees on appeal.
(l) WAIVER OF JURY TRIAL.
EACH OF THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL
ACTION BROUGHT ON OR WITH RESPECT TO THIS AGREEMENT, INCLUDING TO ENFORCE OR
DEFEND ANY RIGHTS HEREUNDER AND AGREES THAT ANY SUCH ACTION SHALL BE TRIED
BEFORE A COURT AND NOT BEFORE A JURY.
(m) CALCULATION OF TIME PERIODS. Unless otherwise specified, in
computing any period of time described herein, the day of the act or event on
which the designated period of time begins to run shall not be included and the
last day of the period so computed shall be included, unless such last day is a
Saturday, Sunday or legal holiday, in which event the period shall run until the
next day which is not a Saturday, Sunday or a legal holiday.
(n) EXPENSES. Except as otherwise specifically provided herein, each
party shall bear its own costs and expenses (including legal fees and expenses)
incurred in connection with this Agreement and the Transaction.
17. EMPLOYEE BENEFITS
------------------
Sellers and Purchaser acknowledge and agree that with the exception of the
Essington Manor Facility, all of the employees of the Facilities are currently
the employees of Purchaser under the terms of the Management Agreements. With
respect to the Essington Manor Facility, Joliet and Purchaser agree as follows.
At Closing, Joliet shall terminate or shall cause XL to terminate all of the
employees of the Essington Manor Facility and shall pay to them or cause XL to
pay to them any wages and benefits, i.e., vacation days and wellness days, which
are due as of the Closing Date under applicable State law. Purchaser agrees to
extend an offer of employment to each of the employees of the Essington Manor
Facility on reasonably comparable terms and conditions to the current terms of
their employment as disclosed to Purchaser by Joliet or XL. Purchaser
acknowledges and agrees that Joliet and XL are relying on Purchaser's agreement
as set forth in this Paragraph 17 in not giving notice to the employees of the
Essington Manor Facility of the transaction provided for herein under the
provisions of the WARN Act.
18. RESIDENT SECURITY DEPOSITS
----------------------------
(a) Sellers and Purchaser acknowledge and agree that, with the
exception of the Essington Manor Facility, Purchaser already has possession and
supervisory control of all of the resident security deposits at the Facilities
under the terms of the Management Agreements. With respect to the Essington
Manor Facility, at Closing, Joliet shall provide or shall cause XL to provide
Purchaser with an accounting of all resident security deposits being held by
Joliet or XL as of the Closing Date for the residents or prospective residents
of the Essington Manor Facility (the "Resident Deposits"). Such accounting
shall set forth the names of the residents or prospective residents for whom
such funds are held, the amounts held on behalf of each resident or prospective
resident and the warranty of Joliet or XL that the accounting is true, correct
and complete.
(b) On the Closing Date, Joliet shall transfer or cause to be
transferred the Resident Deposits to the bank account designated by the
Purchaser and Purchaser shall in writing acknowledge to Joliet and/or XL
receipt of and expressly assume all Joliet's and/or XL's financial and
custodial obligations with respect thereto, it being the intent and purpose of
this provision that, at Closing, Joliet and XL will be relieved of all fiduciary
and custodial obligations with respect to the Resident Deposits actually
transferred to Purchaser, and that Purchaser will assume all such obligations
and be directly accountable to the residents and prospective residents of the
Essington Manor Facility, with respect thereto.
(c) Notwithstanding the foregoing, Joliet will indemnify and hold
Purchaser harmless from all liabilities, claims and demands in the event the
amount of the Resident Deposits transferred to the Purchaser's bank account as
provided in Paragraph 18(b) did not repre-sent the full amount of such Resident
Deposits then or thereafter shown to have been delivered to Joliet or XL by the
current residents or prospective residents of the Essington Manor Facility.
19. ACCOUNTS RECEIVABLE
--------------------
(a) Sellers and Purchaser acknowledge and agree that, with the exception of
the Essington Manor Facility Purchaser currently possesses all of the
information which it may need with respect to the accounts receivable of the
Facilities. However, with respect to the Essington Manor Facility, Joliet and
Purchaser agree as follows. Within ten days prior to the Closing Date, Joliet
shall provide or cause XL to Purchaser with a detailed listing of the accounts
receivable which are anticipated to be outstanding from the residents of the
Essington Manor Facility on the Closing Date.
(b) With respect to each of the Facilities, from and after the Closing Date,
Purchaser shall assume responsibility for the billing for and collection of
payments on account of services rendered or goods sold by it on and after the
Closing Date and Sellers shall retain all right, title and interest in and to
and all responsibility for the collection of its accounts receivable for
services rendered or goods sold prior to the Closing Date.
(c) Any payments received by Purchaser after the Closing Date from
residents with balances due for the period prior to and after the Closing Date
shall be remitted by Purchaser to Sellers first to reduce any pre-Closing Date
balances, with the excess, if any, retained by Purchaser to reduce any
post-Closing Date balances due.
(d) Sellers shall have the right during normal business hours and
on reasonable notice to Purchaser to inspect Purchaser's books and records with
respect to the accounts receivable received by it after the Closing Date from
residents with balances due as of the Closing Date.
20. THIRD PARTY BENEFICIARY
-------------------------
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, ESC and NHP in the event Purchaser assigns some or all of its rights
hereunder to ESC and NHP, respectively) any rights or remedies under or by
reason of this Agreement, including without limitation, any right to enforce
this Agreement.
IN WITNESS WHEREOF, the parties hereby execute this Agreement as of the
Effective Date.
SELLERS: THE LAKES ASSISTED LIVING, LLC,
a Washington limited liability company
By: /s/ Daniel R. Baty
Daniel R. Baty
Its: Manager
SACRAMENTO COUNTY ASSISTED LLC,
a Washington limited liability company
By: /s/ Daniel R. Baty
Daniel R. Baty
Its: Manager
ROCKFORD RETIREMENT RESIDENCE, LLC,
a Washington limited liability company
By: /s/ Daniel R. Baty
Daniel R. Baty
Its: Manager
HB-ESC I, LLC,
a Washington limited liability company
By: /s/ Daniel R. Baty
Daniel R. Baty
Its: Manager
CANTERBURY WOODS ASSISTED LIVING, LLC,
a Washington limited liability company
By: /s/ Daniel R. Baty
Daniel R. Baty
Its: Manager
AUTUMN RIDGE HERCULANEUM, L.L.C.,
a Washington limited liability company
By: /s/ Daniel R. Baty
Daniel R. Baty
Its: Manager
MERIDIAN ASSISTED, L.L.C.,
a Washington limited liability company
By: /s/ Daniel R. Baty
Daniel R. Baty
Its: Manager
GOLDSBORO ASSISTED, L.L.C.,
a Washington limited liability company
By: /s/ Daniel R. Baty
Daniel R. Baty
Its: Manager
CAPE MAY ASSISTED LIVING, LLC,
a Washington limited liability company
By: /s/ Daniel R. Baty
Daniel R. Baty
Its: Manager
TRAVIS COUNTY ASSISTED LIVING LP,
a Washington limited partnership
By: /s/ Daniel R. Baty
Daniel R. Baty
Its: Manager
RICHLAND ASSISTED, L.L.C.,
a Washington limited liability company
By: /s/ Daniel R. Baty
Daniel R. Baty
Its: Manager
SILVER LAKE ASSISTED LIVING LLC,
a Washington limited liability company
By: /s/ Daniel R. Baty
Daniel R. Baty
Its: Manager
CHARLESTON ASSISTED LIVING, LLC,
a Washington limited liability company
By: /s/ Daniel R. Baty
Daniel R. Baty
Its: Manager
JOLIET ASSISTED L.L.C.,
a Washington limited liability company
By: /s/ Daniel R. Baty
Daniel R. Baty
Its: Manager
PURCHASER: EMERITUS CORPORATION,
a Washington corporation
By: /s/ William M. Shorten
William M. Shorten
Its: Director of Real Estate Finance
EXHIBITS A
LEGAL DESCRIPTIONS
SEE ATTACHED
EXHIBIT B
LIST OF FACILITIES
FACILITY ADDRESS
-------- -------
7460 Lake Breeze Drive
The Lakes Fort Meyers, Florida 33907
- ---------- -----------------------------
780 Harrington Way
Loyalton of Folsom Folsom, California 95630
- -------------------- --------------------------
1545 Temple Lane
Loyalton of Rockford Rockford, Illinois 61112
- ---------------------- --------------------------
7110 University Drive
Kingsley Place - Shreveport Shreveport, Louisiana 71105
- ------------------------------ -----------------------------
100 Garfield Avenue
Canterbury Woods Attleboro, Massachusetts 02703
- ----------------- --------------------------------
300 Autumn Ridge Drive
Autumn Ridge Herculaneum, Missouri 63045
- ------------- -----------------------------
4555 35th Avenue
Silverleaf Manor Meridian, Mississippi 39305
- ----------------- -----------------------------
380 Country Day Road
Pines of Goldsboro Goldsboro, North Carolina 27530
- -------------------- ----------------------------------
601 Rt. 9 South
Loyalton of Cape May Cape May Courthouse, New Jersey 08210
- ----------------------- ------------------------------------------
7709 Beckett Road
Beckett Meadows Austin, Texas 78749
- ---------------- ---------------------
770 West Gage Blvd.
Richland Gardens Richland, Washington 99352
- ----------------- ----------------------------
12806 Bothell Everett Highway
Arbor Place Everett, Washington 98208
- ------------ ---------------------------
800 Association Drive, Northgate
Charleston Gardens Charleston, West Virginia 25311
- ------------------- ----------------------------------
3320 Executive Drive
Manor at Essington Joliet, Illinois 60431
- -------------------- ------------------------
EXHIBIT C
VEHICLES
SEE ATTACHED
EXHIBIT D
CLOSING COST ALLOCATIONS
STATE CLOSING FEES OWNER'S PREMIUM RECORDING FEES SEARCH/EXAM
- ----- ------------ --------------- -------------- -----------
FEES SURVEY TRANSFER TAX
- ---- ------ ------------
California D S P-Deed; S-E Included in title premium P S
- ---------- - - ----------- ------------------------- - -
Florida D S P-Deed; S-E S D S
- ------- - - ----------- - - -
S but
Illinois D S P-Deed; S-E S S P-local
- -------- - - ----------- - - -------
Louisiana D P P-Deed; S-E P P N/A
- --------- - - ----------- - - ---
Massachusetts D P P-Deed; S-E P P S
- ------------- - - ----------- - - -
Mississippi D S P S D N/A
- ----------- - - - - - ---
Missouri D P P-Deed; S-E P S N/A
- -------- - - ----------- - - ---
New Jersey P P P-Deed; S-E P P S
- ---------- - - ----------- - - -
North Carolina D P P-Deed; S-E P P S
- -------------- - - ----------- - - -
Texas D S P-Deed; S-E Included in premium D N/A
- ----- - - ----------- ------------------- - ---
Washington D S P Included in premium P S
- ---------- - - - ------------------- - -
West Virginia P P P-Deed; S-E P P S
- ------------- - - ----------- - - -
Key:
D: Divided Equally
S: Seller Pays
P: Purchase Pays
P-Deed: Purchaser pays to record deed
S-E: Seller pays to record documents to remove encumbrances
N/A: Not Applicable
EXHIBIT E
UTILITIES DEPOSITS
The Lakes has posted a deposit with Florida Power and Light in the amount of
$20,050. There are no other utility deposits posted at this time.
EXHIBIT F
REPAIR ITEMS
SEE ATTACHED
EXHIBIT G
LITIGATION BY FACILITY
The Seller which is the owner of the Facility located in Ft. Myers, Florida was
recently served with an administrative complaint in Case No. 2004000520 filed by
the Agency for Health Care Administration seeking the collection of
administrative penalties arising for the operation of the Facility in the
aggregate amount of $1,250. The Seller has the right to request an
administrative hearing with respect to these penalties. No decision has yet been
made by the applicable Seller or Purchaser, in its capacity as the Manager of
the Facility, as to what action will be taken with respect to this complaint.
EXHIBIT H
DESCRIPTIONS OF MANAGEMENT AGREEMENTS
FACILITY DESCRIPTION OF MANAGEMENT AGREEMENT
- -------- -----------------------------------
The Lakes An unexecuted Agreement to Provide Management Services to an
- --------- ------------------------------------------------------------
Assisted Living Facility dated as of May 26, 2000 between The Lakes Assisted
- ----------------------------------------------------------------------------
Living, LLC and Emeritus Corporation
- ------------------------------------
Loyalton of Folsom None - This Facility is Leased by Emeritus Corporation
- ------------------ ------------------------------------------------------
from Sacramento County Assisted LLC
- -----------------------------------
Loyalton of Rockford Agreement to Provide Management Services to an
- -------------------- ----------------------------------------------
Independent Living Facility dated as of May 17, 1999 by and between Rockford
- ----------------------------------------------------------------------------
Retirement Residence LLC and Emeritus Corporation
- --------------------------------------------------
Kingsley Place Shreveport Agreement to Provide Management Services to an
- ------------------------- ----------------------------------------------
Assisted Living Facility dated as of May 1, 2002 by and between HB-ESC I, LLC
- -----------------------------------------------------------------------------
and Emeritus Corporation
- ------------------------
Canterbury Woods An unexecuted Agreement to Provide Management Services to
- ---------------- ---------------------------------------------------------
an Assisted Living Facility dated as of May 26, 2000 between Canterbury Woods
- -----------------------------------------------------------------------------
Assisted Living, LLC and Emeritus Corporation
- ---------------------------------------------
Autumn Ridge Agreement to Provide Management Services to an Assisted Living
- ------------ --------------------------------------------------------------
and Independent Living Facility dated as of June 1, 1997 by and between Columbia
- --------------------------------------------------------------------------------
House and Emeritus Corporation
- ------------------------------
Silverleaf Manor Agreement to Provide Management Services to an Assisted
- ---------------- -------------------------------------------------------
Living Facility dated as of February 2, 1998 by and between Meridian Assisted,
- ------------------------------------------------------------------------------
L.L.C. and Emeritus Corporation
- -------------------------------
Pines of Goldsboro Agreement to Provide Management Services to an Assisted
- ------------------ -------------------------------------------------------
Living Facility dated as of February 2, 1998 by and between Goldsboro Assisted,
- -------------------------------------------------------------------------------
L.L.C. and Emeritus Corporation
- -------------------------------
Loyalton of Cape May Agreement to Provide Management Services to an Assisted
- -------------------- -------------------------------------------------------
Living Facility dated as of March 1, 2000 by and between Cape May Assisted
- --------------------------------------------------------------------------
Living LLC and Emeritus Corporation
- -----------------------------------
Beckett Meadows Agreement to Provide Management Services to an Assisted
- --------------- -------------------------------------------------------
Living Facility dated as of October 15, 2002 by and between Travis County
- -------------------------------------------------------------------------
Assisted Living LP and ESC IV, LP
- ---------------------------------
Richland Gardens Agreement to Provide Management Services to an Assisted
- ---------------- -------------------------------------------------------
Living Facility dated as of February 2, 1998 by and between Richland Assisted,
- ------------------------------------------------------------------------------
L.L.C. and Emeritus Corporation, as successor in interest by assignment to Acorn
- --------------------------------------------------------------------------------
Service Corporation
- -------------------
Arbor Place Management Agreement dated as of September 1, 1998 by and
- ----------- ---------------------------------------------------------
between Silver Lake Assisted Living LLC and Emeritus Corporation
- ----------------------------------------------------------------
Charleston Gardens Agreement to Provide Management Services to an Assisted
- ------------------ -------------------------------------------------------
Living Facility dated as of March 13, 2000 by and between Charleston Assisted
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Living LLC and Emeritus Corporation
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