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EXHIBIT 2.2
CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT (this "Agreement") is dated as of the 11th
day of October, 2000, by and among (i) Sunrise Abington Assisted Living, L.L.C.,
a Pennsylvania limited liability company ("Sunrise Abington"), (ii) Sunrise
Xxxxx Assisted Living, L.L.C., a New Jersey limited liability company ("Sunrise
Wayne"), (iii) Sunrise Springfield Assisted Living, L.L.C., a Virginia limited
liability company ("Sunrise Springfield"), (iv) Sunrise Granite Run Assisted
Living, L.L.C., a Pennsylvania limited liability company ("Sunrise Granite
Run"), (v) Sunrise Haverford Assisted Living, L.L.C., a Pennsylvania limited
liability company ("Sunrise Haverford"), (vi) Sunrise Xxxxxx Plains Assisted
Living, L.L.C., a New Jersey limited liability company ("Sunrise Xxxxxx
Plains"), (vii) Sunrise Westfield Assisted Living, L.L.C., a New Jersey limited
liability company ("Sunrise Westfield"), (viii) Sunrise Old Tappan Assisted
Living, L.L.C., a New Jersey limited liability company ("Sunrise Old Tappan"),
(ix) Sunrise Assisted Living Investments, Inc., a Virginia corporation
("SALII"), (x) Sunrise Assisted Living, Inc., a Delaware corporation ("SALI")
(Sunrise Abington, Sunrise Springfield, Sunrise Granite Run, Sunrise Haverford,
Sunrise Xxxxxx Plains, Sunrise Old Tappan, Sunrise Xxxxx, Sunrise Westfield,
SALI and SALII are hereinafter individually and collectively referred to as
"Sunrise") and (xi) Senior Housing Partners I, L.P., a Delaware limited
partnership (hereinafter referred to as "SHP").
RECITALS:
1. Sunrise Abington owns the assisted living facility located in
Abington, Pennsylvania known as Sunrise Assisted Living of Abington, as more
fully described on Exhibit A attached hereto and made a part hereof (the
"Abington Facility"). SALII owns 100% of the membership interests in Sunrise
Abington.
2. Sunrise Xxxxx owns the assisted living facility located in
Wayne, New Jersey known as Sunrise Assisted Living of Wayne, as more fully
described on Exhibit B attached hereto and made a part hereof (the "Wayne
Facility"). SALII owns 100% of the membership interests in Sunrise Wayne.
3. Sunrise Westfield owns the assisted living facility located in
Westfield, New Jersey known as Sunrise Assisted Living of Westfield, as more
fully described on Exhibit C attached hereto and made a part hereof (the
"Westfield Facility"). SALII owns 100% of the membership interests in Sunrise
Westfield.
4. Sunrise Springfield owns the assisted living facility located in
Springfield, Virginia known as Sunrise Assisted Living of Springfield, as more
fully described on Exhibit D attached hereto and made a part hereof (the
"Springfield Facility"). SALII owns 100% of the membership interests in Sunrise
Springfield.
5. Sunrise Granite Run owns the assisted living facility located in
Granite Run, Pennsylvania known as Sunrise Assisted Living of Granite Run, as
more fully described on Exhibit
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E attached hereto and made a part hereof (the "Granite Run Facility"). SALII
owns 100% of the membership interests in Sunrise Granite Run.P
6. Sunrise Haverford owns the assisted living facility located in
Haverford, Pennsylvania known as Sunrise Assisted Living of Haverford, as more
fully described on Exhibit F attached hereto and made a part hereof (the
"Haverford Facility"). SALII owns 100% of the membership interests in Sunrise
Haverford.
7. Sunrise Xxxxxx Plains owns the assisted living facility located
in Xxxxxx Plains, New Jersey known as Sunrise Assisted Living of Xxxxxx Plains,
as more fully described on Exhibit G attached hereto and made a part hereof (the
"Xxxxxx Plains Facility"). SALII owns 100% of the membership interests in
Sunrise Xxxxxx Plains.
8. Sunrise Old Tappan owns the assisted living facility located in
Old Tappan, New Jersey known as Sunrise Assisted Living of Old Tappan, as more
fully described on Exhibit H attached hereto and made a part hereof (the "Old
Tappan Facility"). SALII owns 100% of the membership interests in Sunrise Old
Tappan.
Sunrise Abington, Sunrise Xxxxx, Sunrise Westfield, Sunrise
Springfield, Sunrise Granite Run, Sunrise Haverford, Sunrise Xxxxxx Plains, and
Sunrise Old Tappan are individually referred to herein as a "Facility Owner" and
collectively referred to herein as the "Facility Owners." The assisted living
facilities described in recital paragraphs 1 through 8 are individually referred
to herein as a "Facility" and are collectively referred to as the "Facilities."
9. SHP desires to acquire a 75% membership interest in each of the
Facility Owners (collectively, the 75% membership interests to be acquired by
SHP are referred to herein as the "Interests") in exchange for cash capital
contributions to the Facility Owners as set forth below; and the Facility Owners
desire to accept such capital contributions from SHP in exchange for issuance by
the Facility Owners to SHP of the Interests, according to the terms and
conditions set forth below.
10. SHP and SALII will enter into Amended and Restated LLC Operating
Agreements (the "Limited Liability Company Agreements") to govern the operation
of each of the Facility Owners setting forth, inter alia, the 75% ownership by
SHP and the 25% ownership by SALII of the Facility Owners, and the
acknowledgment and consent of SALII to the dilution of its ownership interest in
the Facility Owners due to issuance by the Facility Owners of the Interests.
11. The Facility Owners will form a new Delaware general partnership
("Master Entity"). The Pooling and Partnership Agreement of the Master Entity
will provide for pooling of certain rights and obligations of SHP and SALII to
cash flow distributions, allocations of profits and losses, the determinations
of capital accounts, and the funding of operating deficits. The form of the
Partnership Agreement for the Master Entity will be agreed upon, in writing, by
SHP and Sunrise prior to the end of the Due Diligence Period.
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12. Notwithstanding the foregoing, SHP and Sunrise will work
together to determine the most efficient and cost effective structure for the
ownership of the Facilities so long as the aggregated economic benefits and
burdens are allocated initially seventy-five percent (75%) to SHP (or its
Affiliates) and twenty-five percent (25%) to SALII (or its Affiliates) and the
control of the Facilities is the same for all Facilities and is agreed upon by
SHP and SALII during negotiation of the Management Agreements and the Limited
Liability Company Agreements.
13. The Facilities will be managed by Sunrise Assisted Living
Management, Inc., a Virginia corporation ("Manager"), pursuant to separate
Management Agreements with each Facility Owner.
Accordingly, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
TERMINOLOGY
1.1 Defined Terms. As used herein, the following terms shall have
the meanings indicated:
Affiliate: With respect to any specified person or entity, another
person or entity which, directly or indirectly controls, is controlled
by, or is under common control with, the specified person or entity.
Code: The Internal Revenue Code of 1986, as amended.
Documents: This Agreement and all Exhibits hereto, and each other
agreement, certificate or instrument delivered pursuant to this
Agreement.
Due Diligence Period: The period ending sixty (60) calendar days after
execution of this Agreement, during which SHP may investigate the
financial, legal, operational, environmental and all other aspects of
the Facilities as SHP may desire in order to determine whether to
consummate the transactions contemplated by this Agreement or terminate
this Agreement in accordance with Section 3.2.
FF&E: All the furniture, fixtures and equipment owned by Sunrise and
located at the Facilities, which is used or maintained in connection
with the operation of the Facilities.
Xxxxxxx Mac Loans: Those certain loans secured by first lien mortgages
or deeds of trust encumbering the Facilities evidenced by promissory
notes dated May 20, 1999 in the following original principal amounts:
Abington Facility $ 14,468,000
Springfield Facility $ 9,903,000
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Granite Run Facility $ 9,219,000
Haverford Facility $ 8,850,000
Xxxxxx Plains Facility $11,725,000
Old Tappan Facility $11,725,000
Wayne Facility $10,385,000
Westfield Facility $11,725,000
Health Department(s): Singularly or collectively, the departments of
health and/or any other governmental or regulatory authorities of each
of the states where the Facilities are located, which authorities have
jurisdiction over the licensing, ownership and/or operation of the
Facilities as assisted living/dementia facilities.
Knowledge: As used in this Agreement, the term "knowledge" when used to
refer to the knowledge of Sunrise or its Affiliates (a) shall mean and
apply to the actual knowledge of the responsible officers of Sunrise or
its Affiliates who are directly engaged in the management of the
Facilities and not to any other persons or parties, and (b) shall mean
the actual knowledge of such responsible officers, it being understood
and acknowledged that such responsible officers are not charged with
knowledge of all the acts and/or omissions of their predecessors or with
acts or omissions of agents or employees of Sunrise. Neither Sunrise nor
the "Responsible Parties" as hereinafter defined, shall be obligated to
do or perform any independent investigation in connection with the
making of any representations or warranties as set forth in this
Agreement; provided, however, that the Responsible Parties shall make a
good faith inquiry of the executive director of each of the Facilities
in connection with such representations and warranties. The responsible
officers of Sunrise directly engaged in the management and operation of
the Facilities are: Xxxxxx X. Xxxxxx, Xxxxx X. Xxxxx, Xxxxx X. Xxxxxxx,
and the current executive directors of each of the Facilities (whether
one or more, the "Responsible Parties").
Licenses. All certificates, licenses, and permits issued by governmental
authorities held by Sunrise or Sunrise's Affiliates in connection with
the ownership, use, occupancy, operation, and maintenance of the
Facilities. A list of Licenses for each of the Facilities is attached
hereto and incorporated herein as Exhibit X.
Xxxx: Any mortgage, deed of trust, pledge, hypothecation, title defect,
right of first refusal, security or other adverse interest, encumbrance,
claim, option, lien, lease or charge of any kind, whether voluntarily
incurred or arising by operation of law or otherwise, affecting any
assets or property, including any agreement to give or grant any of the
foregoing, any conditional sale or other title retention agreement, and
the filing of or agreement to give any financing statement with respect
to any assets or property under the Uniform Commercial Code or
comparable law of any jurisdiction.
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Loss: With respect to any person or entity, any and all costs,
obligations, liabilities, demands, claims, settlement payments, awards,
judgments, fines, penalties, damages and reasonable out-of-pocket
expenses, including court costs and reasonable attorneys' fees, whether
or not arising out of a third party claim.
Management Agreements: The agreements by and between each Facility Owner
and Manager to be executed and delivered at Closing pertaining to the
operation, direction, marketing, management and supervision of the
Facilities, the form of which will be agreed upon, in writing, by
Sunrise and SHP prior to the end of the Due Diligence Period.
Manager: Sunrise Assisted Living Management, Inc., a Virginia
corporation, its successors or assigns, which shall be the manager of
the Facilities under the Management Agreements.
Material Adverse Effect: A material adverse effect on the assets,
business, operations, financial condition or results of operations of
the Facilities, or any one of them.
Permitted Lien: Any statutory lien which secures a governmentally
required payment not yet due that arises, and is customarily discharged,
in the ordinary course of Sunrise's business.
Resident Deposits: All deposits or advances of any kind or nature from
any resident of any Facility.
Taxes: All federal, state, local and foreign taxes including, without
limitation, income, gains, transfer, unemployment, withholding, payroll,
social security, real property, personal property, excise, sales, use
and franchise taxes, levies, assessments, imposts, duties, licenses and
registration fees and charges of any nature whatsoever, including
interest, penalties and additions with respect thereto and any interest
in respect of such additions or penalties, but excluding impact fees or
other similar exactions levied or payable in connection with the
development of any of the Facilities and excluding special assessments.
Tax Return: Any return, filing, report, declaration, questionnaire or
other document required to be filed for any period with any taxing
authority (whether domestic or foreign) in connection with any Taxes
(whether or not payment is required to be made with respect to such
document).
1.2 Additional Defined Terms. As used herein, the following terms
shall have the meanings defined in the recitals or section indicated below:
Balance Sheet Section 4.4
SHP Preamble
Closing Section 9.1
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Closing Date Section 9.1
Contributions Section 2.4
Excluded Assets Section 2.2
Facilities Recital 8
Facility Agreements Section 2.1(c)
Improvements Section 2.1(a)
Indemnified Party Section 10.4(a)
Indemnifying Party Section 10.4(a)
Intellectual Property Section 2.2(h)
Interim Statements Section 4.4
Land Section 2.1(a)(i)
Master Entity Recital 11
Permitted Exception Section 7.3(b)
Personal Property Section 2.1(b)
Post-Closing Contributions Adjustment Section 2.4(c)
Proration Date Section 2.6(a)
Proration Schedule Section 2.6(a)
Real Estate Tax Adjustment Section 2.4(d)
Real Property Section 2.1(a)(i)
Receivables Section 2.7
Resident Agreements Section 2.1(c)
SALI Preamble
Sunrise Preamble
Surveys Section 7.3(d)
Title Commitments Section 7.3(a)
Title Defect Section 7.3(b)
Title Insurer Section 7.3(a)
Title Notice Section 7.3(b)
ARTICLE II
CONTRIBUTION AND ACQUISITION OF INTERESTS
2.1 Owned Assets. Upon and subject to the terms and conditions
provided herein, on the Closing Date, the Facility Owners will issue to SHP (or
its designated wholly-owned subsidiary) the Interests in accordance with this
Agreement and the Limited Liability Company Agreements, and SHP, which may
exercise its rights hereunder through one or more wholly-owned subsidiaries,
will make the Contributions to the Facility Owners as described below. As of the
Closing Date, all tangible and intangible assets (except Excluded Assets) used
or useful in the operation of the Facilities (the "Owned Assets") as they have
been operated by the Facility Owners will be owned by the Facility Owners. The
Owned Assets include the following:
(a) Real Property.
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(i) That certain real property consisting of land ("Land")
and all buildings, structures, fixtures and other improvements
("Improvements") located thereon, such Land and Improvements being more
particularly described as follows:
Home Address Units
---- ------- -----
Abington 0000 Xxxxxxxxxxx Xxxx 000
Xxxxxxxx, XX 00000
Granite Run 000 Xxxxx Xxxxxxxxxx Xxxx 00
Xxxxx, XX 00000
Haverford 000 Xxxx Xxxxxxxxxx Xxxxxx 00
Xxxxxxxxx, XX 00000
Xxxxxx Plains 000 Xxxxxxxxx Xxxx 00
Xxxxxx Xxxxxx, XX 00000
Old Tappan 000 Xxx Xxxxxx Xxxx 00
Xxx Xxxxxx, XX 00000
Springfield 0000 Xxxxxxxxx Xxxx 00
Xxxxxxxxxxx, XX 00000
Wayne 000 Xxxxxx Xxxxxx 00
Xxxxx, XX 00000
Westfield 000 Xxxxxxxxxxx Xxxxxx 00
Xxxxxxxxx, XX 00000
The Land and related real property (the "Real Property") are
more fully described on Exhibit A through Exhibit H and shall be
deemed to include all permits, easements, Licenses (except to the extent
hereinafter expressly excluded) rights-of-way, rights, members and
related appurtenances.
(ii) All right, title and interest of the Facility Owners as
landlord (whether named as such therein, or by assignment or otherwise)
in any leases and subleases, if any, regarding the Real Property now
existing or at any time hereafter made, and all amendments,
modifications, supplements, renewals and extensions thereof, together
with any security deposits made by the lessees thereunder.
(b) Personal Property.
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(i) Any and all furniture, fixtures, furnishings, machinery
and equipment used in connection with the Facilities, and all other
personal property used in connection with the Real Property and now
located upon the Real Property, if any. A list of such tangible personal
property will be attached hereto as Exhibit I within ten (10) days of
the date hereof. In no event shall the Personal Property include any
property owned by Manager, notwithstanding Manager's use of such
property in connection with its management and administration of the
Facilities. A list of any such excluded personal property located on any
of the Real Property shall be attached hereto as Exhibit I-1, within ten
(10) days of the date hereof.
(ii) Goodwill, going concern, and all existing warranties and
guaranties (express or implied) issued to the Facility Owners in
connection with the Improvements or the Personal Property described in
paragraph (b)(i) above.
(iii) The tangible and intangible property described in
Sections 2.1(b)(i) and 2.1(b)(ii) shall be referred to herein as the
"Personal Property."
(c) Facility Agreements and Resident Agreements. All rights
of Sunrise in, to and under all contracts, leases, agreements, commitments and
other arrangements, and any amendments or modifications, used or useful in the
operation of the Facilities as of the date hereof or made or entered into by the
Facility Owners between the date hereof and the Closing Date in compliance with
this Agreement (the "Facility Agreements"), including but not limited to
occupancy, residency, lease, tenancy and similar written agreements entered into
in the ordinary course of business with residents of the Facilities, and all
amendments, modifications, supplements, renewals, and extensions thereof
("Resident Agreements") and all Resident Deposits, but excluding any Facility
Agreements or Resident Agreements entered into by Sunrise or Manager after the
date hereof and prior to the Closing Date in breach of the provisions of Section
6.1 of this Agreement.
(d) Records. True and complete copies of all of the books,
records, accounts, files, logs, ledgers and journals pertaining to or used in
the operation of the Facilities, including, but not limited to, any electronic
data stored on computer disks or tapes, and originals of any of the foregoing
that relate to residents of the Facilities other than Excluded Assets.
(e) Licenses. Any and all Licenses now held in the name of
Sunrise, Operator or any Affiliate or either of them and used or useful in the
operation of the Facilities, and any renewals, extensions, amendments or
modifications thereof, except to the extent not transferable or assignable under
applicable law.
(f) Miscellaneous Assets. Any other tangible or intangible
assets, properties or rights of any kind or nature not otherwise described above
in this Section 2.1 and now or hereafter owned by the Facility Owners and used
in connection with the operation of the Facilities (except Excluded Assets).
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2.2 Excluded Assets. Notwithstanding any provision of this Agreement
to the contrary, the Owned Assets shall not include any of the following
(collectively, the "Excluded Assets"):
(a) Any and all cash, bank deposits and other cash
equivalents, certificates of deposits, marketable securities, cash deposits made
by or on behalf of the Facility Owners to secure contract obligations (except to
the extent Sunrise receives a credit therefor under Section 2.6).
(b) Any and all rights in and to claims or causes of action
of SALII or the Facility Owners or any of their Affiliates against third parties
(including, without limitation, for indemnification) with respect to, or which
are made under or pursuant to the Owned Assets or the Excluded Assets, and which
arose prior to the date of Closing, it being specifically agreed that Sunrise
shall be responsible for all costs and expenses (including attorneys fees)
incurred in connection with the prosecution of such claims or causes of action;
provided, however, Owned Assets shall include rights in and to any such claims
or causes of action to the extent they are in the nature of enforcing a
guaranty, warranty or a contract obligation to complete improvements, make
repairs or deliver services to any of the Facilities.
(c) All prepaid expenses (and rights arising therefrom or
related thereto) except to the extent taken into account in determining the
Adjustment Amount under Section 2.6.
(d) All loan agreements and other instruments evidencing
indebtedness for borrowed money, except in connection with the Xxxxxxx Mac
Loans.
(e) All contracts of insurance, all coverages and (subject
to Section 13.17 below) proceeds thereunder and all rights in connection
therewith, including, without limitation, rights arising from any refunds due
with respect to insurance premium payments to the extent they relate to such
insurance policies.
(f) All tangible personal property disposed of or consumed
at or in connection with the Facilities between the date hereof and the Closing
Date in accordance with the terms and provisions of this Agreement.
(g) To the extent now or hereafter held by or issued in the
name of SALII, Manager or their Affiliates (other than the Facility Owners) and
not transferrable or assignable under applicable law, all Licenses (and any
renewals, extensions, amendments or modifications thereof), provided, however,
that SALII shall, and shall cause Manager and the Affiliates of SALII and
Manager, to fulfill their obligations as set forth in Section 6.12 to have such
Licenses transferred or reissued in the names of the appropriate Facility Owner,
or such other party as SHP may direct.
(h) Any and all rights of SALI, or any of its Affiliates
with respect to the use of (i) all trade names, trademarks, service marks,
copyrights, patents, jingles, slogans, symbols, logos, inventions, computer
software or other proprietary material, process, trade secret or trade right
used by SALI or its Affiliates in the operation of the Facilities, (ii) all
registrations, applications and licenses for any of the foregoing, and (iii) any
additional such items acquired or used by SALI or its Affiliates in connection
with the operation of the Facilities between the date hereof and the Closing
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Date (collectively, the "Intellectual Property"), provided, however, that SHP or
its Affiliates shall have the right to use the Intellectual Property in
connection with the operation of the Facilities for so long as the Management
Agreements with Manager govern operation of the Facilities.
(i) All corporate minute books, corporate seals, stock
transfer records and other corporate records (except to the extent such records
pertain primarily to or are used primarily in the operation of the Facilities)
and any records relating to Excluded Assets and to liabilities other than the
Assumed Obligations.
(j) Personal property of all officers or employees of SALI
or its Affiliates located in their respective personal offices at the
Facilities.
(k) All other assets of Sunrise or its Affiliates not
located on or used in connection with the operation of the Facilities.
2.3 Acknowledgment of Liabilities. SHP acknowledges that the
Facility Owners shall be obligated to pay, discharge and perform when due, from
and after Closing, the liabilities and obligations listed below (collectively,
the "Owner Obligations"), but Sunrise shall be obligated to fulfill and
discharge all duties and obligations, and shall be responsible for all
liabilities with respect to all items listed below, to the extent attributable
to or arising out of matters that occur prior to Closing:
(a) The Xxxxxxx Mac Loans;
(b) All liabilities and obligations arising under the
Facility Agreements transferred to the Facility Owners in
accordance with this Agreement (but not any Facility Agreements
which are entered into after the date hereof not in compliance
with this Agreement), to the extent such liabilities and
obligations arise during and relate to any period from and after
the Closing Date; and
(c) Provided that Sunrise pays SHP the amount, if any, owed
by Sunrise at Closing under Section 2.6, the Owner
Obligations shall also include such other liabilities of
Sunrise (including but not limited to Resident Deposits)
to the extent, and only to the extent, the amount
thereof is included as a credit to SHP in calculating
the Adjustment Amount as ultimately determined pursuant
to Section 2.6.
2.4 Contribution Amount.
(a) The aggregate amount of SHP's contributions to the
Facility Owners for the Interests ("Contributions") shall be an amount equal to
seventy-five percent (75%) of the excess of (i) One Hundred Thirty-One Million
Dollars ($131,000,000) over (ii) the outstanding principal balance of the
Xxxxxxx Mac Loans as of the Closing Date (such total excess being the "Gross
Equity Value"). The Contributions, subject to adjustment as provided in Section
2.6 below, shall be paid
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by SHP to the Facility Owners on the Closing Date by wire transfer of
immediately available funds to the Title Insurer (as defined in Section 7.3).
(b) If SHP does not elect to terminate this Agreement during
the Due Diligence Period, SHP shall be obligated to close this transaction (if
all conditions precedent hereto have been satisfied) and failure of SHP to close
shall constitute a default.
(c) In the event that aggregate Gross Revenues (as defined
in the Management Agreements) for the Facilities in any of the first four fiscal
quarters after the Closing is less than the "Threshold Revenue Amount" for any
such fiscal quarter (as shown in Exhibit L to be supplied by Sunrise not less
than ten (10) days prior to the Closing Date, which exhibit shall be subject to
SHP's prior reasonable approval), then the Contributions shall be reduced by the
amount determined as shown in Exhibit L, but in no event shall the aggregate
amount of reduction exceed One Hundred Fifty Thousand and 00/100 Dollars
($150,000.00) (the "Post-Closing Contributions Adjustment") for each such fiscal
quarter. Such Post-Closing Contributions Adjustment, if any, shall be allocated
among the Owned Assets in the proportion that the Contributions are allocated
among the Owned Assets in Section 2.5 below. The determination of the aggregate
Gross Revenues for the Facilities and Sunrise's payment, if any, of the
Post-Closing Contributions Adjustment in cash to SHP shall be made within sixty
(60) days following the end of the fourth fiscal quarter after the Closing.
(d) If the aggregate real estate taxes (excluding increases
due to changes in millage rates) levied against the Facilities with respect to
calendar year 2001 exceed 104% of the real estate taxes levied against the
Facilities with respect to calendar year 2000 (the "Excess Real Estate Taxes"),
then the Contributions shall be reduced by the sum of the Excess Real Estate
Taxes divided by 10.75% (the "Real Estate Tax Adjustment"). The Real Estate Tax
Adjustment, if any, shall be paid by SALI to the Master Entity. The Master
Entity shall distribute such sum to its members, pro rata, which distribution
shall be treated as a capital distribution requiring appropriate adjustments to
be made to the capital accounts of the respective members of the Master Entity.
In no event shall such Real Estate Tax Adjustment be required to be made until
after Sunrise has been provided a reasonable opportunity to contest by
appropriate legal proceedings, conducted diligently and in good faith, the
amount or validity of any increase in real estate taxes. SHP and Sunrise agree
that the aggregate amount of the Real Estate Tax Adjustment shall in no event
exceed Three Million Dollars ($3,000,000).
2.5 Allocation of the Contributions. The allocation of the
Contributions among the Facility Owners shall be based on the following gross
valuation breakdown among the Facilities, which amounts total $131,000,000.
Facility Gross Value
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Abington $21,540,000
Granite Run $16,780,000
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Haverford $12,930,000
Xxxxxx Plains $18,130,000
Old Tappan $17,520,000
Springfield $14,560,000
Xxxxx $13,130,000
Westfield $16,410,000
SALII, SHP and the Facility Owners each agree to report such allocations, if
agreed upon, to the Internal Revenue Service and to use such allocation for all
other reporting purposes after Closing in connection with federal, state and
local income and, to the extent permitted under applicable law, franchise taxes.
2.6 Adjustment of Contributions Amount.
(a) All income and expenses (including prepaid expenses) of the
Facilities shall be prorated on a daily basis between Sunrise and SHP as of
11:59 p.m., on the date (the "Proration Date") immediately preceding the Closing
Date. Such items to be prorated shall include:
(i) Rents under the leases and Resident Agreements and other
income, if any, including prepaid rents, community fees, and security
deposits;
(ii) Utility charges, if any;
(iii) Payments under service agreements;
(iv) Food inventory;
(v) Supplies inventory;
(vi) Xxxxx cash;
(vii) Taxes;
(viii) Any escrow accounts or cash deposits held by an utility
companies or otherwise to secure obligations under
contracts that will continue after Closing;
(ix) Interest on the Xxxxxxx Mac Loans; and
(x) Payments under any leases of personal property used in
connection with the operation of the Facilities.
SALII shall prepare a proposed schedule (the "Proration Schedule") and deliver
it to SHP at least five (5) business days prior to Closing, including: (i) the
items listed above, (ii) any items which are
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customarily apportioned between a purchaser and seller in the localities in
which the Facilities are located, and (iii) any other items the parties
determine necessary. Such Proration Schedule shall include all applicable income
and expenses with regard to the Facilities. SALII and SHP will use all
reasonable efforts to finalize and agree upon the Proration Schedule at least
two (2) business days prior to Closing. The amount of the Contributions shall be
adjusted in accordance with the Proration Schedule. Each party shall be
responsible for its own legal fees in connection with this transaction. All
other costs of Closing, including, without limitation, the costs of Surveys,
Title Insurance, all transfer taxes, and all fees charged by Xxxxxxx Mac in
connection with the acquisition by SHP of the Interests, shall be paid 50% by
SHP and 50% by Sunrise.
(b) In the event Sunrise has received any pre-paid rent or any
security deposits from a resident for any period from and after the Proration
Date, such pre-paid rent and/or security deposits will remain in the accounts of
the applicable Facility Owner.
(c) The parties agree that any amounts which may become due under
this Section 2.6 shall be paid at Closing as can best be determined. A
post-Closing reconciliation of such pro-rated items shall be made by the parties
sixty (60) days after Closing and any amounts due at that time shall be promptly
forwarded to the respective party in a lump sum payment. Any additional amounts
which may become due after such determination shall be forwarded at the time
they are received. Any amounts due under this Section 2.6 which cannot be
determined within sixty (60) days after Closing (such as, for example, fiscal
year-end real estate taxes) shall be reconciled as soon thereafter as such
amounts can be determined. Sunrise, on behalf of itself and its Affiliates,
agrees that SHP shall have the right to audit the records of Sunrise in
connection with any such post-closing reconciliation.
2.7 Accounts Receivable. As of the Proration Date, the Facilities
will have certain outstanding accounts receivable (the "Receivables"). SALII
shall receive a credit at Closing in consideration of the Facility Owners' right
to collect the Receivables after Closing. Such credit shall be in an amount
equal to the lesser of (i) seventy-five percent (75%) of the Receivables
outstanding as of the Closing Date or (ii) a sum to be determined by mutual
agreement of SHP and Sunrise. Sunrise agrees that during the term of this
Agreement, it will cause the Facility Owners and Manager to continue to use
usual and customary procedures to collect the Receivables which will be listed
on Exhibit W within ten (10) days of the date hereof. Any and all payments made
to the Facility Owners from and after Closing shall be retained by the Facility
Owners and SALII shall have no separate individual rights with respect thereto,
regardless of whether such payments are for amounts due prior to or subsequent
to Closing.
ARTICLE III
DUE DILIGENCE PERIOD
3.1 Due Diligence Period. During the Due Diligence Period, SHP shall
have the right to review and evaluate the Owned Assets, the nature and extent of
the Owned Assets and operations and all rights and liabilities related thereto.
Sunrise shall furnish or make available to SHP or its
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representatives within five (5) days after the date hereof, the following to the
extent they are in Sunrise's possession or control or are readily obtainable by
Sunrise:
(a) Any and all title insurance policies, (together with copies of
all exception documents referenced therein), as-built surveys, environmental
reports, property condition reports, site inspection reports, and MAI
Appraisals;
(b) Any and all contracts, leases, (including a sample Resident
Lease from each facility), equipment agreements, and information regarding any
claims affecting the Real Property or the Personal Property;
(c) All licenses and permits currently held by Sunrise, Manager, or
their Affiliates in connection with the ownership or operation of the
Facilities, and all existing warranties and guaranties (express or implied)
issued in connection with the Owned Assets;
(d) Facility budgets for the year 2000; and
(e) Copies of any and all notices received by Sunrise, Manager, or
their Affiliates from (i) any Health Departments with respect to: material
violation or alleged material violations of Licenses; substantial complaints by
Residents or their families; material defects or other material deficiencies in
the Facilities; results of all inspections of the Facilities conducted within
the past twelve (12) months; (ii) any other governmental authorities with
respect to material violations or alleged material violations of applicable
laws, codes, regulations, licenses or requirements including health/sanitation
codes, fire codes, building codes, and environmental laws and regulations; and
(iii) any other third parties with respect to any material matters of the type
described in (i) and (ii) above.
(f) All other such documents or items as SHP may reasonably request
in connection with its due diligence investigations of the Facilities.
3.2 Termination during Due Diligence. At any time during the Due
Diligence Period, SHP shall have the right, in its sole discretion and for any
reason or no reason, to terminate this Agreement by written notice to SALII.
Upon such notice, this Agreement shall terminate and be of no further force and
effect.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SUNRISE
Sunrise represents and warrants to SHP as follows:
4.1 Organization, Good Standing and Entity Authority. Each of the
Facility Owners is a limited liability company, duly organized, validly existing
and in good standing under the laws of the State in which the Facility which it
owns is located, and has all requisite authority to own, and operate its Owned
Assets and carry on its business. SALII is a corporation duly organized, validly
existing and in good standing under the laws of the Commonwealth of Virginia and
SALI is a
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corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware.
4.2 Authorization and Binding Effect of Documents. SALII and each
Facility Owner have all requisite power and authority to enter into this
Agreement and the other Documents to which they are a party and to consummate
the transactions contemplated by this Agreement. The execution and delivery of
this Agreement and each of the other Documents by Sunrise and the consummation
by Sunrise of the transactions contemplated hereby and thereby have been duly
authorized by all necessary action on the part of Sunrise and Sunrise's members
or board of directors, as the case may be. This Agreement has been, and each of
the other Documents at or prior to Closing will be, duly executed and delivered
by Sunrise. This Agreement constitutes (and each of the other Documents, when
executed and delivered, will constitute) the valid and binding obligation of
Sunrise enforceable against Sunrise in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium and other similar
laws affecting the rights of creditors generally and to the exercise of judicial
discretion in accordance with general principles of equity, whether applied by a
court of law or of equity.
4.3 Absence of Conflicts. The execution, delivery and performance by
Sunrise of this Agreement and the other Documents, and consummation by Sunrise
of the transactions contemplated hereby and thereby, do not and will not, to the
best of Sunrise's knowledge, (i) conflict with or result in any breach of any of
the terms, conditions or provisions of, (ii) constitute a default under, (iii)
result in a violation of, (iv) give any third party the right to modify,
terminate or accelerate any obligation under, or (v) result in the creation of
any Lien upon the Interests or the Owned Assets under the provisions of the
Articles of Incorporation or Bylaws of Sunrise, the organizational instruments
of any Facility Owner, any laws or regulations to which Sunrise or any Facility
Owner is subject, or any indenture, mortgage, lease, loan agreement or other
agreement or instrument to which Sunrise or the Facilities are subject.
4.4 Financial Statements. Sunrise has delivered to SHP prior to the
date of this Agreement the unaudited financial statements for each of the
Facilities as of December 31, 1999, including but not limited to an unaudited
balance sheet as of December 31, 1999 (the "Balance Sheet"). Sunrise has also
delivered to SHP prior to the date of this Agreement the unaudited financial
statements for each of the Facilities as of June 30, 2000 (the "Interim
Statements"), certified by the Chief Financial Officer of SALI. All such
statements (i) are in accordance in all material respects with the books and
records of Sunrise and (ii) have been prepared in accordance with GAAP applied
on a consistent basis and fairly present the assets and liabilities of the
Facilities as of the dates stated and accurately reflect the results of
operations of the Facilities for the periods covered by the statements, with the
exception that the Interim Statements are subject to normal year-end
adjustments.
4.5 Absence of Certain Changes or Events. Since the date of the
Balance Sheet (except as disclosed in the Interim Statements):
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(a) There has not been any damage, destruction or other
casualty loss with respect to the Owned Assets (whether or not covered by
insurance) which, individually or in the aggregate has, or could reasonably be
expected to have, a Material Adverse Effect.
(b) None of Sunrise, Manager, or the Facilities has suffered
any adverse change or development which, individually or in the aggregate, has
had or could reasonably be expected to have a Material Adverse Effect.
(c) Neither Sunrise or Manager has:
(i) amended or terminated any Facility Agreement or
Resident Agreement, except in the ordinary course of business;
(ii) mortgaged, pledged, suffered or subjected to any
Lien, the Interests or any of the Owned Assets, except for Permitted
Liens and any Lien which will be released at or prior to the Closing
Date;
(iii) acquired or disposed of any assets, personal
property or properties affecting the Facilities or entered into any
agreement or other arrangement for such acquisition or disposition,
except in the ordinary course of business;
(iv) entered into any agreement, commitment or other
transaction affecting the Facilities other than in the ordinary course
of business;
(v) operated the Facilities other than in the
ordinary course of business.
4.6 Broker's or Finder's Fees. No agent, broker, investment banker
or other person or firm acting on behalf of or under the authority of Sunrise or
any Affiliate of Sunrise is or will be entitled to any broker's or finder's fee
or any other commission or similar fee, directly or indirectly, in connection
with the transactions contemplated by this Agreement. Sunrise agrees to
indemnify and hold SHP harmless from any Loss resulting from a breach of this
representation and warranty. Notwithstanding the provisions of Article X below,
such agreement to indemnify shall survive the Closing without limitation.
4.7 Insurance. There is now, and until Closing there will remain, in
full force and effect with reputable insurance companies, full replacement cost,
"all risks" property insurance with respect to each of the Facilities and
commercial general liability insurance, with respect to each of the Facilities,
written on an occurrence basis with combined single limits for personal injury,
death and property damage, of at least $3,000,000.00 per occurrence.
4.8 Litigation. Except as set forth on Exhibit M, there is no
pending, or to the best of Sunrise's knowledge, threatened litigation,
proceeding or investigation (by any person, governmental or quasi-governmental
agency or authority or otherwise) to which Sunrise is a party, including without
limitation litigation brought by Sunrise against third parties. The litigation,
proceedings and investigations listed on Exhibit M will not, individually or in
the aggregate, materially adversely
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affect the ownership, use, occupancy, operation, cash flow, profitability or
title to any of the Facilities.
4.9 Compliance with Laws. To the best of Sunrise's knowledge, the
Improvements have been constructed and the Facilities have been and are
presently used and operated in compliance in all material respects with, and in
no material way violate any applicable statute, law, regulation, rule,
ordinance, order, License or permit of any kind whatsoever affecting the
Facilities or any part thereof. Neither Sunrise nor any of Sunrise's Affiliates
has received notice of any such violation.
4.10 Environmental Matters. Except as set forth in the environmental
reports delivered to SHP pursuant to Section 3.1(a), to Sunrise's knowledge,
neither Sunrise, nor any of Sunrise's Affiliates has generated, stored or
disposed of any hazardous waste at any of the Facilities, and Sunrise has no
knowledge of any previous or present generation, storage, disposal or existence
of any hazardous waste at any of the Facilities. The term "hazardous waste"
shall mean "hazardous waste," "toxic substances," or other similar or related
terms as defined or used from time to time in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. Sections
1801, et seq.), the Resource Conservation and Recovery Act, as amended (42
U.S.C. Section 6921, et seq.), similar state laws and regulations adopted
thereunder. Hazardous waste shall not include (1) pre-packaged supplies,
cleaning materials and petroleum products customarily used in the operation and
maintenance of comparable properties, (2) cleaning materials, personal grooming
items and other items sold in pre-packaged containers for consumer use and used
by tenants and residents in the Facilities; and (3) petroleum products used in
the operation and maintenance of motor vehicles from time to time located on the
Facilities' parking areas, so long as, to the extent required, all applicable
permits for the use of any of the foregoing have been obtained and are in full
force and effect and so long as all the foregoing are used, stored, handled,
transported and disposed of in compliance with all hazardous substances laws and
any such applicable permits.
4.11 Assessments. There are no special or other assessments for
public improvements or otherwise now affecting any of the Facilities, nor does
Sunrise have knowledge of (i) any pending or threatened special assessments
affecting any of the Facilities or (ii) any contemplated improvements affecting
any of the Facilities that may result in special assessments affecting any of
the Facilities.
4.12. Resident Agreements. Attached hereto as Exhibit N are true and
correct copies of the forms of Resident Agreement used at the Facilities. No
Resident Agreement currently in effect with respect to any of the Facilities
contains any material deviations from the forms attached hereto as Exhibit N.
Sunrise is not in default under any of its material obligations under any
Resident Agreement or any lease and, except as set forth on the rent roll
attached hereto as Exhibit U (the "Rent Roll"), Sunrise has no knowledge of any
material default on the part of any other party thereto. All of the Resident
Agreements and leases identified on the Rent Roll are currently in full force
and effect. The Rent Roll is true and correct in all material respects and
Sunrise will provide an updated Rent Roll at Closing and will re-affirm the
foregoing representations and warranty with respect to such updated Rent Rolls.
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4.13. Facility Agreements. The Facility Agreements listed on Exhibit O
hereto are all of the Facility Agreements relating to or affecting any of the
Facilities. Sunrise has heretofore delivered to SHP true and complete copies of
all such Facility Agreements, including all amendments and modifications
thereto; neither Sunrise nor any of its Affiliates is in default of any of its
material obligations under any of such Facility Agreements, and Sunrise has no
knowledge of any material default on the part of any other party thereto. All of
the Facility Agreements listed on Exhibit O are currently in full force and
effect. Except for the Facility Agreements and the Resident Agreements described
in Section 4.12 above, there are no material service contracts, leases or other
contracts or agreements affecting any of the Facilities.
4.14 Permits. Exhibit K attached hereto is a true and complete list
of all Licenses. All the Licenses are valid and no material violations exist. To
Sunrise's knowledge, the Licenses are the only certificates, licenses, and
permits which are required for the lawful ownership, use, occupancy, operation
and maintenance of the Facilities as assisted living/dementia facilities.
4.15 Medicare; Medicaid. As of the date hereof, no resident at any
Facility is a participant in Medicare, Medicaid or other public payor program
with respect to such resident's fees or other services payable to Sunrise or
Manager. To Sunrise's knowledge, no action, proceeding, or investigation in
connection with Medicare, Medicaid or other public or private third-party payor
or other programs is pending or threatened against Sunrise or any of Sunrise's
Affiliates in connection with the Facilities. Neither Sunrise nor Sunrise's
Affiliates has received notice of any threatened or pending investigation in
connection with (i) Medicare, Medicaid, or other public or private third-party
payor programs or (ii) any fraud, false statement or false claim applicable to
its business or (iii) any patient care, patient rights or other law applicable
to its business. Sunrise or Sunrise's Affiliates have prepared and filed all
cost reports, if any, that were required to be filed for Medicare and Medicaid
purposes and for all other public or private third-party reimbursement programs
through the date of this Agreement. All such cost reports, if any, are correct
and accurate and have been prepared in conformity with Sunrise's books and
records. Neither Sunrise nor Sunrise's Affiliates has received notice that
Medicare, Medicaid or any other public or private third-party payor has any
claims for disallowance of costs against it. To Sunrise's knowledge, neither
Sunrise nor any Affiliate of Sunrise has committed any violation of the Medicare
and Medicaid fraud and abuse provisions of the Social Security Act, any similar
state law or Title VI of the Civil Rights Act.
4.16 Condemnation. Neither Sunrise nor any of Sunrise's Affiliates
has received any written notice of any pending or contemplated condemnation,
eminent domain or similar proceeding with respect to all or any portion of the
Facilities and, to Sunrise's knowledge, no such condemnation proceeding is being
considered.
4.17 Condition of Property. To Sunrise's knowledge, with regard to
the Improvements, (i) there are no material structural defects, (ii) they are
free of insect and rodent infestation, (iii) the roofs are free of active leaks,
(iv) all mechanical and utility systems servicing the Improvements are in good
condition and proper working order, free of material defects and, to Sunrise's
knowledge, in compliance with all applicable laws and codes. To Sunrise's
knowledge, all the Personal Property is in good condition, working order and
repair.
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4.18 Independent Facilities. To Sunrise's knowledge, each Facility is
an independent unit which as of the date hereof does not rely, and as of the
Closing, will not rely on any facilities (other than the facilities of public
utility, sewer and water companies) located on any property not included in such
Facility (i) to fulfill any zoning, building code, or other municipal or
governmental requirement, or (ii) for structural support or the furnishing of
any essential building systems or utilities, including, but not limited to,
electric, plumbing, mechanical, heating, ventilating and air conditioning
systems. To Sunrise's knowledge, no building or other improvements not included
in the Facilities relies on any part of the Facilities to fulfill any zoning,
building code or other municipal or governmental requirement or for structural
support or the furnishing of any essential building systems or utilities.
4.19 Full Disclosure. None of the representations or warranties in
this Agreement by Sunrise, nor any descriptive information concerning the Owned
Assets set forth in this Agreement, nor, to Sunrise's knowledge, does any
document, statement, certificate, schedule or other information furnished or to
be furnished to SHP by Sunrise in connection with this Agreement, contain, or
will as of the Closing, contain any untrue statement of a material fact or omit,
or will as of the Closing omit, to state a material fact necessary to make the
statements of fact contained therein not misleading.
4.20 Utilities Access. Each Facility has adequate water supply, storm
and sanitary sewer facilities, adequate access to telephone, gas and electricity
connections, adequate fire protection, drainage, means of ingress and egress to
and from public highways and, without limitation, other public utilities for
operation as an assisted living/dementia facility. To Sunrise's knowledge, the
parking facilities located on each Facility meet all applicable requirements
imposed by applicable law or requisite exceptions, conditions, or variances to
such laws. All such public utilities are installed and operating and all
installation and connection charges have been paid in full and all such
utilities are provided to each Facility either directly from an adjacent public
right-of-way or through valid, recorded, insurable public or private easements.
All streets and roads necessary for access to and full utilization of each of
the Facilities, and every part thereof, have been built, completed, dedicated
and accepted for maintenance and public use by the appropriate governmental
authorities or are otherwise owned and maintained by local governments for
public use. Sunrise has no knowledge of any fact or condition existing that
would result or could result in the termination or reduction of the current
access from the Facilities to the existing roads and highways or to sewer or
other utility services presently serving the Facilities.
4.21 Zoning. To Sunrise's knowledge, the use of each of the
Facilities as assisted living/dementia facilities, together with the ancillary
uses thereto, are permitted under the applicable municipal zoning ordinances, or
special exceptions, variances, or conditions thereto, and the Facilities comply,
to the extent required (and not waived or grandfathered), with all conditions,
restrictions and requirements of such zoning ordinances and all amendments
thereto.
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4.22 No Employees. None of the employees at the Facilities is
employed by SALII or the Facility Owners. All such employees are employed by
Manager or its Affiliates other than SALII. None of the Facility Owners now has,
and at no time ever had, any employees.
4.23 Intentionally Deleted.
4.24 Bank Accounts. Exhibit P, to be attached hereto within ten (10)
days of the date hereof, sets forth the names and locations of all banks, trust
companies, savings and loan associations, and other financial institutions or
depositories at which SALII or the Facility Owners maintain any safe deposit
boxes or accounts of any nature, the numbers and types thereof, and the names of
all persons authorized to draw thereon, make withdrawals therefrom or have
access thereto. After the Closing, Sunrise shall cooperate with SHP to the
extent necessary to close any such accounts which SHP desires closed, and to
change the persons authorized to draw upon such accounts which SHP does not
desire closed.
4.25 Taxes. Sunrise has accurately prepared and duly and timely filed
(or has filed as part of a consolidated tax filing) all tax reports and returns
required to be filed by them and, whether or not shown on such returns or
reports to be due, has duly paid or provided for the payment of all taxes and
other charges due or claimed to be due from it by federal, state, local or
foreign taxing authorities (including, without limitation, those due in respect
of the properties, income, franchises, licenses, sales, usages or payrolls of
Sunrise); there are no tax liens upon any property or assets of Sunrise except
liens for current taxes not yet due. Each of the Facilities is a separate,
independent tax parcel consisting of the applicable tract of Land and the
Improvements thereon. The federal income tax returns of SALII and the Facility
Owners have not been audited or otherwise examined by the Internal Revenue
Service within the past three years, and no state or local income, sales, use,
or property tax returns of SALII and the Facility Owners have been audited or
otherwise examined within the past three years. Sunrise has no notice of the
pendency of any such audit or examination. There are no outstanding agreements
or waivers extending the statutory period of limitation applicable to any
federal or state income tax return for any period and Sunrise has not filed any
consent under Section 341(f) of the Code.
4.26 Owned Assets. The Owned Assets (except Excluded Assets)
constitute all real, tangible and intangible assets and property used or useful
in the operation of the Facilities as they have been operated by the Facility
Owners. Sunrise or Manager is the Landlord under all leases and Resident
Agreements relating to the Facilities. Sunrise has not pledged or assigned its
right with respect to any of the Resident Agreements, except for the collateral
assignment thereof as security for the Xxxxxxx Mac Loans. The Facility Owners
will not, as of Closing, own or hold an interest in any property, real or
personal, tangible or intangible, except for the Owned Assets.
4.27 Interests. SALII owns 100% of the membership interests in each
Facility Owner, free and clear of all liens, options, claims, encumbrances or
charges of any kind, and there are no outstanding options or other rights to
purchase or otherwise acquire any membership interest in any of the Facility
Owners.
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4.28 Executive Director. The executive director of each Facility is
the person most likely to have knowledge regarding the accuracy or inaccuracy of
any of the representations of Sunrise set forth herein which are qualified to
Sunrise's knowledge.
4.29 Title Encumbrances. Neither SALII nor the Facility Owners are in
default under any of their material obligations under any recorded agreement,
easement or instrument encumbering title to any of the Facilities, and Sunrise
has no knowledge of any material default on the part of any other party thereto.
4.30 Affordable Housing Units. Exhibit Q to be attached hereto within
ten (10) days of the date hereof is a true and complete list of each unit within
the Facilities (specifying the number of bedrooms in each unit) which is leased
or reserved for lease as an affordable housing unit, or for low or moderate
income residents. Exhibit Q truly and correctly lists the number of units (and
the number of bedrooms in each such unit) at the Facilities which may be
required to be leased as an affordable housing unit, or for low or moderate
income residents, pursuant to a presently existing agreement or requirement of
law.
4.31 No New Survey Matters. To Sunrise's knowledge, since the dates
of the as-built surveys for each of the Facilities previously provided to SHP by
Sunrise (the "Xxxxxxx Mac Surveys"), no new survey matters have arisen in
connection with any of the Real Property which would otherwise be required to be
shown thereon under the applicable ALTA/ACSM standards used in preparing the
Xxxxxxx Mac Surveys to be shown thereon.
4.32 Xxxxxxx Mac Loans. To the best of Sunrise's knowledge, the
Xxxxxxx Mac Loans are in full force and effect, and there exists no Event of
Default thereunder, and no event or circumstance which, with the passing of time
or giving of notice, would constitute an Event of Default thereunder. Sunrise
has delivered to SHP full and complete copies of all the loan documents
evidencing and securing the Xxxxxxx Mac Loans.
4.33 Insolvency. Neither Sunrise nor any of its Affiliates has (i)
commenced a voluntary case or had entered against it a petition for relief under
any federal bankruptcy act or any similar petition order or to create under any
federal or state law or statute relative to bankruptcy, insolvency or other
relief for debtors, (ii) caused, suffered or consented to the appointment of a
receiver, trustee, administrator, conservator, liquidator or similar official in
any federal, state or foreign judicial or nonjudicial proceeding to hold,
administer and/or liquidate all or substantially all of its assets, (iii) had
filed against it any involuntary petition seeking relief under any federal or
state law or statute relative to bankruptcy, insolvency or other relief to
debtors which involuntary petition is not dismissed within sixty (60) days, or
(iv) made a general assignment for the benefit of creditors.
4.34 REOC Status. As of the date of this Agreement, each of the
Facility Owners has been conducting their respective business activities so as
to qualify as a REOC within the meaning of 29 CFR Section 2510.3 101 and SALII
will cause each of the Facility Owners to qualify as a REOC as of the Closing
Date.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SHP
SHP represents and warrants to Sunrise as follows:
5.1 Organization and Good Standing. SHP is a limited liability
partnership duly organized, validly existing and in good standing under the laws
of the State of Delaware. SHP has all requisite company power to own, operate
and lease its properties and carry on its business as it is now being conducted
and as the same will be conducted following the Closing.
5.2 Authorization and Binding Effect of Documents. Subject to
Section 7.11 of this Agreement, SHP (and its Affiliates) will, prior to Closing,
have all requisite power and authority to enter into this Agreement and the
other Documents and to consummate the transactions contemplated by this
Agreement. The execution and delivery of this Agreement and each of the other
Documents by SHP (and its Affiliates) and the consummation by SHP (and its
Affiliates) of the transactions contemplated by this Agreement will, subject to
Section 7.11 of this Agreement, be duly authorized by all necessary company
action on the part of SHP. Subject to Section 7.11 of this Agreement, this
Agreement has been, and each of the other Documents at or prior to Closing will
be, duly executed and delivered by SHP. Subject to Section 7.11 of this
Agreement, to the best of SHP's knowledge, this Agreement constitutes (and each
of the other Documents, when executed and delivered, will constitute) the valid
and binding obligation of SHP enforceable against SHP in accordance with its
terms subject to applicable bankruptcy, insolvency, reorganization, moratorium
and other similar laws affecting the rights of creditors generally and to the
exercise of judicial discretion in accordance with general principles of equity,
whether applied by a court of law or of equity.
5.3 Absence of Conflicts. Subject to Section 7.11 of this Agreement,
the execution, delivery and performance by SHP (and/or its Affiliates) of this
Agreement and the other Documents, and consummation by SHP (and/or its
Affiliates) of the transactions contemplated hereby and thereby, do not and will
not (i) conflict with or result in any breach of any of the terms, conditions or
provisions of, (ii) constitute a default under, (iii) result in a violation of,
(iv) give any third party the right to modify, terminate or accelerate any
obligation under, the provisions of the articles of organization or operating
agreement of SHP (and/or its Affiliates), any indenture, mortgage, lease, loan
agreement or other agreement or instrument to which SHP (and/or its Affiliates)
is bound or affected, or any law, statute, rule, judgment, order or decree to
which SHP (and/or its Affiliates) is subject.
5.4 Consents. The execution, delivery and performance by SHP (and/or
its Affiliates) of this Agreement and the other Documents, and consummation by
SHP (and/or its Affiliates) of the transactions contemplated hereby and thereby,
do not and will not require the authorization, consent, approval, exemption,
clearance or other action by or notice or declaration to, or filing with, any
court or administrative or other governmental body, or the consent, waiver or
approval of any other person or entity.
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5.5 Broker's or Finder's Fees. No agent, broker, investment banker,
or other person or firm acting on behalf of SHP or under its authority is or
will be entitled to any broker's or finder's fee or any other commission or
similar fee, directly or indirectly, from SHP in connection with the
transactions contemplated by this Agreement. SHP agrees to indemnify and hold
SALII and its Affiliates harmless form any Loss, resulting from a breach of the
representations and warranties set forth in this section. Notwithstanding the
provisions of Article X below, such agreement to indemnify shall survive the
Closing without limitation.
ARTICLE VI
OTHER COVENANTS
6.1 Conduct of the Facility's Business Prior to the Closing Date.
Sunrise covenants and agrees with SHP that from the date hereof through the
Closing Date, unless SHP otherwise consents in writing (which consent shall not
be unreasonably withheld), Sunrise or Sunrise's Affiliates shall:
(a) Operate the Facilities in the ordinary course of
business, including (i) incurring expenses consistent with the past practices,
(ii) making reasonable capital expenditures prior to the Closing Date, but only
in an amount consistent with past practices and the current Facility budget,
(iii) using commercially reasonable efforts to preserve the Facilities' present
business operations, organization and goodwill and its relationships with
residents, customers, employees, advertisers, suppliers and other contractors,
and (iv) maintain the REOC status of each Facility Owner.
(b) Operate the Facilities and otherwise conduct its
business in all material respects in accordance with the terms or conditions of
the Licenses, all applicable rules and regulations of the relevant State, and to
the best of its knowledge all other rules, regulations, laws and orders of all
governmental authorities having jurisdiction over any aspect of the operation of
such Facilities and all applicable insurance requirements.
(c) Maintain the Facility Owners' books and records in
accordance with GAAP on a basis consistent with prior periods.
(d) Timely comply in all material respects with any Facility
Agreements.
(e) Not sell, lease, grant any rights in or to or otherwise
dispose of, or agree to sell, lease or otherwise dispose of, any of the Owned
Assets except for dispositions of assets that (A) are in the ordinary course of
business and (B) if material, are replaced by similar assets of substantially
equal or greater value and utility.
(f) Maintain the FF&E and Personal Property currently in use
in reasonably good operating condition and repair, except for ordinary wear and
tear, in a manner consistent with past practices.
(g) Perform all covenants, terms and conditions and make all
payments under the Xxxxxxx Mac Loans in a timely fashion.
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(h) Not enter into any Resident Agreements except at rental
rates, term duration and on other terms and conditions consistent in all
material respects with the existing Resident Agreements for the applicable
Facility, as set forth in the Rent Rolls attached to this Agreement.
(i) Not make any alterations or improvements to any Facility
or make any capital expenditure with respect to any Facility, except as
described in item 6.1(a)(ii) above.
(j) Not enter into any Facility Agreements which call for
annual payments in excess of $20,000.00 or for a term in excess of one year,
unless the applicable Facility Agreement can be terminated by the Facility Owner
upon not more than sixty (60) days prior written notice without the payment of
any termination fee or penalty payment.
6.2 Notification of Certain Matters. SALII shall give prompt notice
to SHP, and SHP shall give prompt notice to SALII, of (i) the occurrence, or
failure to occur, of any event that would be likely to cause any of their
respective representations or warranties contained in this Agreement to be
untrue or inaccurate in any material respect at any time from the date hereof to
the Closing Date, and (ii) any failure on their respective parts to comply with
or satisfy, in any material respect, any covenant, condition or agreement to be
complied with or satisfied by any of them under this Agreement.
6.3 Title; Additional Documents. At the Closing, the Facility Owners
shall own the Owned Assets free and clear of any Liens except Permitted
Exceptions and the Xxxxxxx Mac Loans. At the Closing, all warranties and
guaranties relating to the Facilities shall be held and owned by the Facility
Owners. SALII, Facility Owners and/or their Affiliates shall execute or cause to
be executed such documents, in addition to those delivered at the Closing, as
may be necessary to confirm in SHP good and marketable title to the Interests
and to carry out the purposes and intent of this Agreement. SHP, and/or its
Affiliates, shall execute or cause to be executed such documents, in addition to
those delivered at Closing as may be necessary to confirm SHP's, or such
Affiliates,' assumption of the Owner Obligations.
6.4 Other Consents. Sunrise shall use reasonable efforts to obtain
the consents or waivers to the transactions contemplated by this Agreement
required under any Facility Agreements; provided that Sunrise shall not be
required to make any financial accommodation to a third party in order to obtain
any such consent or waiver (other than payment of any amount otherwise due such
third party).
6.5 Inspection and Access. Sunrise and Manager shall, commencing on
the date of this Agreement, open the assets, books, accounting records,
correspondence and files of SALII, the Facility Owners, and Manager (to the
extent related to the operation of the Facilities) for examination by SHP, its
officers, attorneys, accountants and agents, with the right to make copies of
such books, records and files or extracts therefrom. Such access will be
available to SHP during normal business hours, upon reasonable notice and in
such manner as will not unreasonably interfere with the conduct of the business
of the Facilities. All requests for access shall be made by XXX xx Xxxxxx X.
Xxxxxx,
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Xxxxx X. Xxxxxxx or Xxxxxxx Bath on behalf of SALII. As and when Sunrise
prepares the same for its own purposes (which preparation shall be consistent in
terms of timing with Sunrise's past practices), Sunrise will furnish to SHP
unaudited financial statements of SALII and the Facility Owners for the periods
from and after the date of the Interim Statements prepared in a manner
consistent with the Interim Statements. Sunrise will make available to SHP such
additional financial and operating data and other available information
regarding the Facilities or the Owned Assets as SHP may reasonably request.
Those books, records and files (the possession of which is not being transferred
to SHP pursuant to this Agreement) which relate to the Owned Assets shall be
preserved and maintained by Sunrise for four (4) years after the Closing and
those books, records and files relating to the Owned Assets the possession of
which is being transferred to SHP hereunder shall be maintained and preserved by
SHP for a period of four (4) years after the Closing. Each such party shall give
to the other party and its authorized representatives, during normal business
hours, such access to, and the opportunity at the other party's expense to copy,
such books and records retained by it as may be reasonably requested by the
other party.
6.6 Confidentiality. SHP and SALI entered into a confidentiality
agreement dated August 16, 2000 (the "Confidentiality Agreement"), a copy of
which is attached hereto as Exhibit R, in connection with the transactions
contemplated by this Agreement, which agreement shall remain in full force and
effect, unmodified by the terms of this Agreement. Sunrise and SHP will use
their best efforts to comply with the terms of the Confidentiality Agreement.
Notwithstanding any other provision in this Agreement, this Section shall
survive the Closing indefinitely.
6.7 Publicity. The parties agree that no public release or
announcement concerning the transactions contemplated hereby shall be issued by
any party without the prior written consent of the other party, except as
required by law or applicable regulations.
6.8 Material Adverse Change. SHP and Sunrise will promptly notify
the other party of any event of which SHP or Sunrise, as the case may be,
obtains knowledge which has had or could reasonably be expected to have a
Material Adverse Effect.
6.9 Reasonable Best Efforts. Subject to the terms and conditions of
this Agreement, each party will use its reasonable best efforts to take all
action and to do all things necessary, proper or advisable to satisfy any
condition hereunder in its power to satisfy and to consummate and make effective
as soon as practicable the transactions contemplated by this Agreement.
6.10 Health Department Reports. Sunrise shall file, or cause its
Affiliates to file, on a current and timely basis and in all material respects
in a truthful and complete fashion until the Closing Date, all reports and
documents required to be filed with the Health Department with respect to the
Facilities.
6.11 Tax Returns and Payments. Sunrise will timely file with the
appropriate governmental agencies all Tax Returns required to be filed by
Sunrise with respect to the Facilities prior to Closing and timely pay all Taxes
reflected on such Tax Returns as owing by Sunrise or its Affiliates.
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6.12 Post-Closing Obligation of Sunrise. Sunrise shall use, and shall
cause Manager and Sunrise's Affiliates to use diligent efforts to promptly
cooperate with SHP and its Affiliates to have the Licenses reissued in
accordance with Section 7.6 of this Agreement (or to otherwise satisfy the
provisions of Section 7.6 of this Agreement). This covenant of Sunrise shall
survive Closing indefinitely.
ARTICLE VII
CONDITIONS PRECEDENT TO THE OBLIGATION OF SHP TO CLOSE
SHP's obligation to make the Contributions and acquire the Interests
pursuant to the terms of this Agreement is subject to the satisfaction, on or
prior to the Closing Date, of each of the following conditions, unless waived by
SHP in writing:
7.1 Accuracy of Representations and Warranties; Closing Certificate.
(a) The representations and warranties of Sunrise and its
Affiliates contained in this Agreement or in any other Document shall be true
and correct in all material respects on the date hereof, and at the Closing Date
with same effect as though made at such time except for changes permitted
hereunder.
(b) Sunrise shall have delivered to SHP on the Closing Date
a certificate that the conditions specified in Sections 7.1(a) and 7.2 are
satisfied as of the Closing Date.
7.2 Performance of Agreement. Sunrise shall have performed in all
material respects all of its covenants, agreements and obligations required by
this Agreement to be performed or complied with by it prior to or upon the
Closing Date.
7.3 Title Insurance and Survey.
(a) Within five (5) days after the execution of this
Agreement, SHP, at its expense, shall order commitments for owner's policies of
title insurance (the "Title Commitments") issued by either Chicago Title
Insurance Company, Washington, D.C. National Business Unit, or First American
Title Insurance Company - Washington, D.C. National Business Office ("Title
Insurer") covering each parcel of Real Property, in which the Title Insurer
shall agree to insure, in such amount as SHP deems adequate, merchantable title
to the Real Property in the name of SHP or its wholly-owned subsidiaries, as the
case may be, free from the Schedule B standard printed exceptions and all other
exceptions except Permitted Exceptions (as defined below) with such endorsements
as SHP shall reasonably require and with insurance coverage over any "gap"
period. Such Title Commitments shall have attached thereto complete, legible
copies of all instruments noted as exceptions therein. The Title Commitments
shall be updated not more than two (2) business days prior to the Closing to
reflect the state of the title. SHP shall pay any and all costs and expenses
related to the title insurance, including all search fees, closing fees and the
premium for the policy issued pursuant to the Title Commitments.
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(b) If (1) the Title Commitments reflect any exceptions to
title other than Permitted Liens which are not acceptable to SHP in SHP's sole
discretion, or (2) the Survey delivered to SHP pursuant to Section 7.3(d) below
discloses any state of fact not acceptable to SHP in SHP's sole discretion, or
(3) at any time prior to the Closing, title to the Real Property is encumbered
by any exception to title other than Permitted Liens which was not on the
initial Title Commitments and is not acceptable to SHP in SHP's sole discretion
(any such exception or unacceptable state of fact being referred to herein as a
"Title Defect"), then SHP shall, on or before the later of the end of the Due
Diligence Period or ten (10) days following receipt of the Title Commitments or
discovery of the Title Defect, as the case may be, give SALII written notice of
such Title Defect (the "Title Notice"). Such Title Notice shall include a copy
of the relevant Title Commitment and copies of the exceptions. Any exception to
title to the Real Property that is (i) disclosed in the Title Commitment, or
(ii) identified on a Survey, which, in either case, is not identified as a Title
Defect in the Title Notice, shall be deemed to be a "Permitted Exception" for
purposes of this Agreement. SALII shall have the right, but not the obligation,
within ten (10) days after receipt of any such Title Notice, to notify SHP that
Sunrise will take the action necessary to remove such Title Defect. If SALII
elects to so notify SHP, then, on or before the Closing, SALII shall provide SHP
with reasonable evidence of such removal or provide title insurance over such
Title Defect in form satisfactory to SHP. Notwithstanding anything contained
herein to the contrary, Sunrise shall be obligated (or shall cause its
Affiliates) to expend whatever sums are reasonably required to cure the
following Title Defects prior to, or at, the Closing:
(i) All mortgages, security deeds, other security
instruments or other monetary liens encumbering the Real Property, other
than the Xxxxxxx Mac Loans;
(ii) All past due ad valorem taxes and assessments of
any kind, whether or not of record, which constitute, or may constitute,
a lien against the Real Property; and
(iii) Judgments against the Sunrise or its Affiliates
(which do not result from acts or omissions on the part of SHP) which
have attached to and become a lien against the Real Property.
(c) In the event SALII does not notify SHP, within such ten
(10) day period, that Sunrise will cure any Title Defect, SHP shall have the
option to (i) waive any Title Defect and proceed to Closing or (ii) terminate
this Agreement. If SALII notifies SHP that Sunrise will cure any Title Defect
but fails to do so, or if Sunrise is obligated to cure a Title Defect pursuant
to subparagraph (b) above and fails to do so, SHP shall have the right, in
addition to the rights described in the preceding sentence, to: (x) pay a sum
(up to a maximum of $10,000 per Facility) necessary to cure the Title Defect and
deduct such amount from the Contributions, or (y) pursue any and all remedies
provided in Section 11.2 of this Agreement as a result of Sunrise's default.
Such maximum sum shall not apply in the case of liens of a liquidated amount
which are not being disputed by Sunrise.
(d) Within five (5) days after the execution of this
Agreement, SHP, at SHP's expense, may order boundary surveys for each parcel of
the Real Property (the "Survey" or
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"Surveys") prepared by a registered land surveyor or surveyors satisfactory to
SHP. The Surveys, if they are ordered, shall (1) be completed in accordance with
SHP's reasonable survey requirements, and shall be certified to Sunrise, SHP,
and the Title Insurer by such surveyor; (2) have one perimeter description for
the Real Property on which each of the Facilities are located; (3) show all
easements, rights-of-way, setback lines, encroachments and other matters
affecting the use or development of the Real Property; and (4) disclose on the
face thereof the gross and net acreage of each parcel of Real Property. Upon
receipt of the Survey by SHP, SHP shall promptly furnish a copy of same to
SALII. SHP, at its option, may choose not to order the Surveys and instead rely
on the Xxxxxxx Mac Surveys and the warranty of Sunrise in Article IV above that,
to its knowledge, no new survey matters have arisen with regard to the
Facilities.
(e) Any failure by SHP to perform under this Section 7.3
shall not relieve SHP of its obligation to proceed to Closing under this
Agreement.
(f) At Closing, the Title Insurer shall be prepared to issue
Title Insurance Policies in accordance with the Title Commitments, with all
endorsements included and with coverage over any "gap" period.
7.4 Other Inspections. During the Due Diligence Period, at
reasonable times and upon reasonable notice, SHP or SHP's agent(s), consultants
or other retained professionals shall have the right, at SHP's expense, to
perform or complete such inspections and assessments of the Real Property and
Improvements as SHP deems necessary or desirable, including, without limitation,
environmental and structural aspects, and assessments of the compliance of the
Facilities with all applicable laws and regulations. SHP shall cause its
inspectors and/or consultants to deliver to SALII a copy of each such inspection
report at the time such report(s) are delivered to SHP. A failure by SHP to
perform any inspections or assessments shall not relieve SHP of its obligation
to proceed to Closing under this Agreement.
7.5 Delivery of Closing Documents. Sunrise shall have delivered or
caused to be delivered to SHP on the Closing Date each of the documents required
to be delivered pursuant to Section 9.2.
7.6 Licenses.
(a) For those facilities in Pennsylvania, the Facility
Owners shall, if any license change is required in connection with the
transactions contemplated by this Agreement, (i) have timely filed an
application with the Pennsylvania Department of Public Welfare and (ii) shall
have received a comfort letter from Sunrise's Pennsylvania regulatory counsel
regarding the issuance of the Pennsylvania licenses substantially in the form
provided to SHP at least five (5) business days prior to the expiration of the
Due Diligence Period or, if a license is not so required, the Facility Owners
shall have obtained evidence or confirmation reasonably satisfactory to SHP that
no new License is needed (in the form of a comfort letter or other letter from
the applicable regulators) in connection with the Transactions contemplated by
this Agreement.
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(b) For those facilities located in New Jersey, the Facility
Owners shall, if any license change is required in connection with the
transactions contemplated by this Agreement, have timely submitted its
Introductory Letter to the New Jersey Department of Health and the Department of
Health shall have responded with its usual form of written notification
approving the potential transfer. Such form shall be provided to SHP at least
five (5) business days prior to the expiration of the Due Diligence Period or,
if a license change is not so required, the Facility Owners shall have obtained
evidence or confirmation reasonably satisfactory to SHP that no new License is
needed (in the form of a comfort letter or other letter from the applicable
regulators) in connection with the Transactions contemplated by this Agreement.
(c) For the Springfield Facility, to the extent Sunrise and
SHP mutually agree that Virginia law allows the license to be issued in the name
of the Facility Owner, Sunrise shall use diligent efforts to have the license
reissued in the name of Sunrise Springfield, including timely filing an
appropriate application with the Virginia Department of Health. In the event
Sunrise and SHP fail to so mutually agree, after reasonable review of applicable
law and good faith discussions with applicable regulatory authorities, Manager
shall remain the licensed operator. In the event the Virginia Department of
Health declines to issue a comfort letter reasonably acceptable to SHP, the
parties agree to proceed based on oral assurances or instructions received from
the Virginia Department of Health or upon a comfort letter from Sunrise's
Virginia regulatory counsel. The form of comfort letter from the state and/or
regulatory counsel shall be provided to SHP at least five (5) business days
prior to the expiration of the Due Diligence Period.
7.7 Management Agreements. Manager shall have entered into
Management Agreements with each Facility Owner for the operation of the
Facilities, which Management Agreements shall be in substantially the form
agreed upon, in writing, by SALII and SHP prior to the end of the Due Diligence
Period.
7.8 Amended and Restated LLC Operating Agreements. SHP and SALII (or
their respective Affiliates) shall have entered into the Limited Liability
Company Agreements to govern the operations of each Facility Owner, the form of
which shall be agreed upon, in writing, by SALII and SHP prior to the end of the
Due Diligence Period.
7.9 INTENTIONALLY DELETED.
7.10 Xxxxxxx Mac Approval. Xxxxxxx Mac shall have given its consent
to the transactions contemplated by this Agreement with a fee not exceeding one
and one-half percent (1 1/2 %) of the outstanding principal balance of the
Xxxxxxx Mac Loans. Sunrise shall have provided a certificate to SHP certifying
that the Xxxxxxx Mac Loans are in full force and effect, and there exists no
Event of Default thereunder, and no event or circumstance which, with the
passing of time or giving of notice, would constitute an Event of Default
thereunder. Sunrise shall with SHP's full cooperation negotiate the consent from
Xxxxxxx Mac diligently and in good faith and both parties to the transactions
contemplated hereby shall reasonably consider any commercially reasonable
modifications to this Agreement that Xxxxxxx Mac may require in connection with
the approval by
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Xxxxxxx Mac of the transactions contemplated hereby. In the event that despite
such diligent, good faith efforts by SALII, Sunrise and SHP, Xxxxxxx Mac does
not ultimately consent to the Contributions and acquisition of the Interests by
SHP, then Sunrise shall reimburse SHP for up to One Hundred Fifty Thousand and
00/100 Dollars ($150,000.00) of those actual, third-party costs incurred by SHP
during the Due Diligence Period (including legal fees and expenses) in
connection with SHP's due diligence investigations conducted to determine
whether to consummate the transactions contemplated by this Agreement, but such
reimbursement shall only be made for those costs incurred after the execution of
this Agreement by both parties. SHP shall provide SALII with evidence reasonably
acceptable to SALII that SHP has incurred such due diligence costs.
7.11 Investment Committee Approval. SHP shall have obtained the
approval of the Investment Committee of Prudential Real Estate Investors for SHP
to enter into this Agreement and to consummate the transaction contemplated by
this Agreement. SHP will notify SALII promptly following the meeting of the
Investment Committee whether or not the necessary approval has been obtained.
SHP shall obtain the approval of the Investment Committee on or before the
expiration of the Due Diligence Period, or Sunrise's obligations under this
Agreement shall lapse and be of no further force and effect.
7.12 ERISA. SHP shall be satisfied that its ownership interest in the
Facility Owners shall not cause a violation of ERISA requirements. Sunrise will
cooperate with SHP to execute certifications or add other provisions to the
documents necessary for SHP to determine that not ERISA violations will exist.
ARTICLE VIII
CONDITIONS PRECEDENT TO THE OBLIGATION OF SUNRISE TO CLOSE
The obligations of Sunrise to close the transactions contemplated in
this Agreement pursuant to the terms of this Agreement are subject to the
satisfaction, on or prior to the Closing Date, of each of the following
conditions, unless waived by SALII in writing:
8.1 Accuracy of Representations and Warranties.
(a) The representations and warranties of SHP contained in
this Agreement shall be true and correct in all material respects on the date
hereof and at the Closing Date with the same effect as though made at such time,
except for changes that are not materially adverse to SALII or its Affiliates.
(b) SHP shall have delivered to SALII on the Closing Date a
certificate that the conditions specified in Sections 8.1(a) and 8.2 are
satisfied as of the Closing Date.
8.2 Performance of Agreements. SHP shall have performed in all
material respects all of its covenants, agreements and obligations required by
this Agreement and each of the other Documents to be performed or complied with
by it prior to or upon the Closing Date.
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8.3 Licenses.
(a) For those facilities in Pennsylvania, the Facility
Owners shall, if any license change is required in connection with the
transactions contemplated by this Agreement, (i) have timely filed an
application with the Pennsylvania Department of Public Welfare and (ii) shall
have received a comfort letter from Sunrise's Pennsylvania regulatory counsel
regarding the issuance of the Pennsylvania licenses substantially in the form
provided to SHP at least five (5) business days prior to the expiration of the
Due Diligence Period or, if a license change is not so required, the Facility
Owners shall have obtained evidence or confirmation reasonably satisfactory to
SHP that no new License is needed (in the form of a comfort letter or other
letter from the applicable regulators) in connection with the Transactions
contemplated by this Agreement.
(b) For those facilities located in New Jersey, the Facility
Owners shall, if any license change is required in connection with the
transactions contemplated by this Agreement, have timely submitted its
Introductory Letter to the New Jersey Department of Health and the Department of
Health shall have responded with its usual form of written notification
approving the potential transfer. Such form shall be provided to SHP at least
five (5) business days prior to the expiration of the Due Diligence Period or,
if a license change is not so required, the Facility Owners shall have obtained
evidence or confirmation reasonably satisfactory to SHP that no new License is
needed (in the form of a comfort letter or other letter from the applicable
regulators) in connection with the Transactions contemplated by this Agreement.
(c) For the Springfield Facility, to the extent Sunrise and
SHP mutually agree that Virginia law allows the license to be issued in the name
of the Facility Owner, Sunrise shall use diligent efforts to have the license
reissued in the name of Sunrise Springfield, including timely filing an
appropriate application with the Virginia Department of Health. In the event
Sunrise and SHP fail to so mutually agree, after reasonable review of applicable
law and good faith discussions with applicable regulatory authorities, Manager
shall remain the licensed operator. In the event the Virginia Department of
Health declines to issue a comfort letter reasonably acceptable to SHP, the
parties agree to proceed based on oral assurances or instructions received from
the Virginia Department of Health or upon a comfort letter from Sunrise's
Virginia regulatory counsel. The form of comfort letter from the state and/or
regulatory counsel shall be provided to SHP at least five (5) business days
prior to the expiration of the Due Diligence Period.
8.4 Amended and Restated LLC Operating Agreement. SHP and SALII (or
their respective Affiliates) shall have entered into the Limited Liability
Company Agreements to govern the operations of the Facility Owners, the forms of
which shall be agreed upon, in writing, by SALII and SHP prior to the end of the
Due Diligence Period.
8.5 INTENTIONALLY DELETED.
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8.6 Delivery of Closing Documents. SHP shall have delivered or
caused to be delivered to SALII on the Closing Date each of the Documents
required to be delivered pursuant to Section 9.3.
8.7 Xxxxxxx Mac Approval. Xxxxxxx Mac shall have given its consent
to the transactions contemplated by this Agreement, with an assumption fee not
exceeding one and one-half percent (1 1/2%) of the outstanding principal balance
of the Xxxxxxx Mac Loans.
ARTICLE IX
CLOSING
9.1 Time and Place. Closing of the Contributions and SHP's
acquisition of the Interests pursuant to this Agreement (the "Closing") shall
take place through escrow at the offices of the Title Insurer at 10:00 a.m. on
January 15, 2001, or at such later date as may be mutually agreed upon by the
parties (the "Closing Date"). Time is of the essence of the terms of this
Section.
9.2 Documents to be Delivered to SHP by Sunrise. At the Closing,
Sunrise shall deliver or cause to be delivered to SHP the following, in each
case in form and substance reasonably satisfactory to SHP:
(a) Governmental certificates, dated as of a date as near as
practicable to the Closing Date, showing that (i) each entity defined herein as
"Sunrise," is in good standing in the state of organization of such entity, and
(ii) each Facility Owner is in good standing in the state of its organization
and qualified to do business in the state in where the Facility it owns is
located.
(b) A certificate of the Secretary or Assistant Secretary of
Sunrise attesting as to the incumbency of each officer of Sunrise who executes
this Agreement and any of the other Documents, certifying that resolutions and
consents necessary for Sunrise to act in accordance with the terms of this
Agreement have been adopted or obtained (with copies thereof attached) and to
similar customary matters.
(c) A Limited Liability Company Agreement for each Facility
Owner, wherein SALII acknowledges and consents to the dilution of its 100%
ownership to 25% ownership.
(d) An agreement of assignment and conveyance, in form
satisfactory to SHP, transferring the Interests to SHP.
(e) The certificate described in Section 7.1(b).
(e) A true, correct and complete Rent Roll certified by an
officer of SALII, for each Facility listing each resident as of the Closing
Date, the unit, bed or room number of such resident, and the amount of the
monthly fees to be paid by such resident (including room, meal and
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other applicable monthly fees), the amount of security deposit, if any, date of
Resident Agreement and the expiration date of such Resident Agreement, in the
form of Exhibit U.
(f) A letter agreement from Sunrise and Manager in favor of
SHP confirming their obligations under Section 6.12 above.
(g) An indemnity agreement from Sunrise (unlimited in amount
and duration), in form satisfactory to SHP, indemnifying SHP, the Facility
Owners, and SHP's Affiliates from any and all claims, liabilities, obligations,
damages or expenses that may have existed or which arise out of events that
occurred prior to Closing with respect to the Facility Owners, except for
liabilities accruing under the Owner Obligations on or after the Proration Date.
(h) Letters from Health Departments and/or local counsel for
each of the Facilities addressing such matters regarding the Licenses as may be
reasonably requested by SHP and as required by Section 7.6 hereof.
(i) Such additional information and materials as SHP shall
have reasonably requested to evidence the satisfaction of the conditions to its
obligations hereunder, including without limitation, evidence that all consents
and approvals required as a condition to SHP's obligation to close hereunder
have been obtained, title affidavits, such affidavits and indemnities as the
Title Insurer may require to issue the Title Insurance policies, the gap
coverage and all endorsements including, without limitation, non-imputation
endorsements and "fairways endorsements," and any other documents expressly
required by this Agreement to be delivered by Sunrise at Closing, or as may be
required by the Title Insurer.
9.3 Deliveries to SALII by SHP. At the Closing, SHP shall deliver or
cause to be delivered to SALII or other appropriate party the following, in each
case in form and substance reasonably satisfactory to SALII or such other party:
(a) The Contributions in accordance with Section 2.4, and
the adjustments under Section 2.6.
(b) The certificate described in Section 8.1(b).
(c) A Limited Liability Company Agreement for each Facility
Owner.
(d) Governmental Certificates dated as of a date as near as
practicable to the Closing Date showing that SHP is duly organized and in good
standing in the State of Delaware.
(e) A certificate of the Secretary or Assistant Secretary of
SHP attesting as to the incumbency of each Officer of SHP who executes this
Agreement and any of the other Documents and to similar customary matters.
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(f) All documents required in order to evidence the consent
of Xxxxxxx Mac to the acquisition by SHP of the Interests.
(g) Such additional information and materials as SALII shall
have reasonably requested to evidence the satisfaction of the conditions to its
obligations hereunder.
9.4 Closing Costs. SHP and Sunrise shall each pay their respective
attorneys' fees and expenses. All costs of the Title Insurer to insure title,
and the cost of owner's title insurance policies, and all county or state
transfer or recording taxes, if any, and all costs associated with the consent
of Xxxxxxx Mac will be paid fifty percent (50%) by SHP (or its Affiliates) and
fifty percent (50%) by Sunrise (or its Affiliates). All items described in
Section 2.6 above shall be prorated between the parties as of the Closing Date.
ARTICLE X
INDEMNIFICATION
10.1 Survival. All representations, warranties, covenants and
agreements in this Agreement or any other Document shall survive the Closing for
a period of one (1) year. The rights to indemnification set forth in this
Article X shall be exclusive of all other rights to monetary damages that any
party (or the party's successors or assigns) would otherwise have by statute or
common law in connection with the transactions contemplated by this Agreement or
any other Document. Notwithstanding anything to the contrary herein, if (a) SHP
is notified of the untruth of any representation or warranty made by Sunrise
hereunder by (i) written notice from SALII (which notice shall refer to the
representation or warranty which is untrue) or (ii) the professional written
reports and studies prepared by SHP as part of SHP's due diligence, and (b) SHP
nevertheless elects to close under this Agreement, then SHP shall be deemed to
have waived the breach in question and shall not assert any post-closing claim
against Sunrise with respect to that breach. However, if Sunrise first notifies
SHP of any such untruth after the end of the Due Diligence Period, such
notification shall be deemed a material default by Sunrise and, if SHP elects to
terminate this Agreement, SHP shall be entitled to liquidated damages, as
provided in Section 11.2(a)(i) below.
10.2 Indemnification by SALII and SALI. SALII and SALI shall
indemnify, defend, and hold harmless SHP, each Facility Owner, and their
respective officers, directors, employees, Affiliates, successors and assigns
from and against, and pay or reimburse each of them for and with respect to, any
Loss relating to, arising out of or resulting from any of the following:
(a) Any breach by Sunrise of any of its representations,
warranties, covenants or agreements in this Agreement or any other Document; or
(b) Any obligation, indebtedness or liability of Sunrise
other than (i) the Owner Obligations and (ii) obligations, indebtedness or
liabilities to the extent an adjustment is made to the Purchase Price pursuant
to Section 2.6. Subject to the foregoing clauses (i) and (ii), the obligations,
indebtedness and liabilities of Sunrise hereunder shall include, but not be
limited to, (a) claims by state or federal governmental agencies for repayment
of claims for reimbursement of costs,
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regardless of whether disclosed to SHP and regardless whether constituting a
breach by Sunrise of any representation, warranty, covenant or agreement
hereunder or under any other Document, and (b) all claims and causes of action
held by Sunrise against third parties, or held by any third party against
Sunrise, which claims or causes of action accrued prior to the Closing Date,
regardless of whether constituting a breach by Sunrise of any representation,
warranty, covenant, or agreement hereunder; or
(c) Noncompliance by Sunrise with the provisions of the Bulk
Sales Act, if such act applies, in connection with the transactions contemplated
by this Agreement.
10.3 Indemnification by SHP. SHP shall indemnify and hold harmless
Sunrise and its officers, directors, employees, agents, representatives,
Affiliates, successors and assigns from and against, and pay or reimburse each
of them for and with respect to any Loss relating to, arising out of or
resulting from:
(a) Any breach by SHP of any of its representations,
warranties, covenants or agreements in this Agreement or any other Document; or
(b) All Owner Obligations; or
(c) The Facility Owners' operation of the Facilities on or
after the Closing Date.
10.4 Administration of Indemnification. For purposes of administering
the indemnification provisions set forth in Sections 10.2 and 10.3, the
following procedure shall apply:
(a) Whenever a claim shall arise for indemnification under
this Article, the party entitled to indemnification (the "Indemnified Party")
shall reasonably promptly give written notice to the party from whom
indemnification is sought (the "Indemnifying Party") setting forth in reasonable
detail, to the extent then available, the facts concerning the nature of such
claim and the basis upon which the Indemnified Party believes that it is
entitled to indemnification hereunder.
(b) In the event of any claim for indemnification resulting
from or in connection with any claim by a third party, the Indemnifying Party
shall be entitled, at its sole expense, either (i) to participate in defending
against such claim or (ii) to assume the entire defense with counsel which is
selected by it and which is reasonably satisfactory to the Indemnified Party
provided that (A) the Indemnifying Party agrees in writing that it does not and
will not contest its responsibility for indemnifying the Indemnified Party in
respect of such claim or proceeding and (B) no settlement shall be made and no
judgment consented to without the prior written consent of the Indemnified Party
which shall not be unreasonably withheld. If, however, (i) the claim, action,
suit or proceeding would, if successful, result in the imposition of damages for
which the Indemnifying Party would not be solely responsible, or (ii)
representation of both parties by the same counsel would otherwise be
inappropriate due to actual or potential differing interests between them, then
the Indemnifying Party shall not be entitled to assume the entire defense and
each party shall be
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entitled to retain counsel who shall cooperate with one another in defending
against such claim. In the case of Clause (i) of the preceding sentence, the
Indemnifying Party shall be obligated to bear only that portion of the expense
of the Indemnified Party's counsel that is in proportion to the damages
indemnifiable by the Indemnifying Party compared to the total amount of the
third-party claim against the Indemnified Party.
(c) If the Indemnifying Party does not choose to defend
against a claim by a third party, the Indemnified Party may defend in such
manner as it deems appropriate or settle the claim (after giving notice thereof
to the Indemnifying Party) on such terms as the Indemnified Party may deem
appropriate, and the Indemnified Party shall be entitled to periodic
reimbursement of defense expenses incurred and prompt indemnification from the
Indemnifying Party in accordance with this Article.
(d) Failure or delay by an Indemnified Party to give a
reasonably prompt notice of any claim (if given prior to expiration of any
applicable Survival Period) shall not release, waive or otherwise affect an
Indemnifying Party's obligations with respect to the claim, except to the extent
that the Indemnifying Party can demonstrate actual loss or prejudice as a result
of such failure or delay.
(e) The provisions of Sections 10.2, 10.3, and this Section
10.4 shall survive the Closing hereunder indefinitely.
ARTICLE XI
DEFAULT AND TERMINATION
11.1 Right of Termination. This Agreement may be terminated prior to
Closing:
(a) By SHP during the Due Diligence Period for any reason or
no reason, for failure of any of the conditions set forth in Article VII to
occur, or as otherwise permitted by this Agreement; or
(b) By written agreement of SALII and XXX.
00.0 Xxxxxxxx xxxx Xxxxxxx.
(x) If Sunrise defaults on any of its material obligations
hereunder, and such default continues for ten (10) business days after written
notice thereof specifying such default, SHP may, as its sole remedy hereunder,
by serving notice in writing to SALII in the manner provided in this Agreement,
either:
(i) Terminate this Agreement and declare it null and void,
in which event Sunrise shall pay to SHP the sum of Two
Million Dollars ($2,000,000) as agreed and liquidated
damages, and as the sole legal or equitable remedy for
Sunrise's default, Sunrise and SHP hereby acknowledging
and agreeing that the
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damages which SHP would suffer as a result of such
default and termination would be difficult, if not
impossible, to determine and that the liquidated damages
provided for herein are a fair and reasonable estimation
of such damages; or
(ii) Waive any such conditions, title objections or defaults
and consummate the transaction contemplated by this
Agreement in the same manner as if there had been no
title objections, conditions or defaults without any
reduction in the Purchase Price and without any further
claim against Sunrise therefor.
(b) If SHP materially defaults on any of its obligations
hereunder, including, without limitation, the obligation to make the
Contributions on or before the Closing Date, time being of the essence, then
Sunrise may as its sole remedy hereunder, by serving notice in writing to SHP
and Escrow Agent in the manner provided in this Agreement, recover liquidated
damages from SHP in the amount of Two Million Dollars ($2,000,000), SHP and
Sunrise hereby acknowledging and agreeing that the damages which Sunrise would
suffer as a result of such default and termination would be difficult, if not
impossible, to determine and that the liquidated damages provided for herein are
a fair and reasonable estimation of such damages.
11.3 No Specific Performance. SHP specifically agrees that SHP shall
not be entitled, in the event of a breach by Sunrise, to enforcement of this
Agreement by a decree of specific performance or injunctive relief requiring
Sunrise to fulfill its obligations under this Agreement. SHP hereby knowingly
and intentionally waives any such right of specific performance or injunctive
relief in favor of SHP's right to recover liquidated damages as set forth in
Section 11.2(a) above for Sunrise's breach.
11.4 Obligations Upon Termination. Upon termination of this
Agreement, each party shall thereafter remain liable for breach of this
Agreement prior to such termination. If this Agreement is terminated without any
breach by either party hereto, each of the parties shall be liable and
responsible for any costs incurred by such party in connection with the
transactions contemplated by this Agreement.
11.5 Termination Notice. Each notice given by a party to terminate
this Agreement shall specify the Subsection of Article 11 pursuant to which such
notice is given. If at the time a party gives a termination notice, such party
is entitled to give such notice pursuant to more than one Section of Article 11,
the Subsection pursuant to which such notice is given and termination is
effected shall be deemed to be the section specified in such notice provided
that the party giving such notice is at such time entitled to terminate this
Agreement pursuant to the specified section.
11.6 Survival. Notwithstanding anything to the contrary contained
herein upon the expiration or any termination of this Agreement the rights and
obligations of the parties under Section 6.6 and Section 6.7 shall survive such
termination or expiration for a period of one (1) year.
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ARTICLE XII
TRANSITIONAL MATTERS
12.1 Prior to Closing. Upon a written request from SHP or Manager,
the parties shall conduct meetings with residents, families of residents and
employees of Manager for the purpose of explaining as the parties hereto deem
reasonably necessary any changes in ownership and operation of the Facilities
arising out of the transactions contemplated hereby.
ARTICLE XIII
MISCELLANEOUS
13.1 Further Actions. From time to time before, at and after the
Closing, each party, at its expense and without further consideration, will
execute and deliver such documents as reasonably requested by the other party in
order more effectively to consummate the transactions contemplated hereby.
13.2 Notices. All notices, demands or other communications given
hereunder shall be in writing and shall be sufficiently given if delivered by
courier (including overnight delivery service) or sent by registered or
certified mail, first class, postage prepaid, addressed as follows:
(a) If to SHP, to:
Senior Housing Partners I, L.P.
c/o Xxxx X. Dark, Principal
Xxx Xxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
with copies to:
Senior Housing Partners I, L.P.
c/o The Prudential Insurance Company of America
0 Xxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxx X. Xxxxxx, Assistant General Counsel
and:
Xxxx X. Xxxxxx, Esq.
Xxxxxx & Bird, LLP
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
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(b) If to Sunrise, to:
Sunrise Assisted Living, Inc.
0000 Xxxxxxxx Xxxxx
XxXxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx,
Executive Vice President-Finance
with copies to:
Sunrise Assisted Living, Inc.
0000 Xxxxxxxx Xxxxx
XxXxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
and to:
Xxxxx X. Xxxxxxx, Esq.
Watt, Tieder, Hoffar & Xxxxxxxxxx, L.L.P.
0000 Xxxxxxxx Xxxxx, Xxxxx 000
XxXxxx, Xxxxxxxx 00000
(c) if to Escrow Agent, to:
First American Title Insurance Company
0000 Xxxxxxxxxxx Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Xx. Xxxxx X. Xxxxxxx
or such other address as a party may from time to time notify the other party in
writing (as provided above). Any such notice, demand or communication shall be
deemed to have been given (i) if so mailed, as of the close of the third
business day following the date so mailed, and (ii) if delivered by courier, on
the date received.
13.4 Entire Agreement. This Agreement, Exhibits and the other
Documents constitute the entire agreement and understanding between the parties
with respect to the subject matter hereof and supersede any prior negotiations,
agreements, understandings or arrangements between the parties hereto with
respect to the subject matter hereof.
13.5 Binding Effect; Benefits. Except as otherwise provided herein,
this Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors or permitted assigns. Except to the
extent specified herein, nothing in this Agreement, express or implied, shall
confer on any person other than the parties hereto and their respective
successors or permitted assigns any rights, remedies, obligations or liabilities
under or by reason of this Agreement.
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13.6 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder may be assigned by either party without the
prior written consent of the other party, provided that SHP may assign all of
its rights under this Agreement to an Affiliate, provided that (i) the
representations and warranties of SHP hereunder shall be true and correct in all
material respects as applied to the assignee, (ii) both SHP and the assignee
shall execute and deliver to SALII a written instrument in form and substance
satisfactory to SALII within their reasonable judgment in which both SHP and the
assignee agree to be jointly and severally liable for performance of all of
SHP's obligations under this Agreement, and (iii) SHP and the assignee shall
deliver such other documents and instruments as reasonably requested by SALII,
including appropriate certified resolutions of the boards of directors of SHP
and the assignee.
13.7 Governing Law. This Agreement shall in all respects be governed
by and construed in accordance with the laws of the Commonwealth of Virginia
without regard to its principles of conflicts of laws, provided, however, that,
in the event Sunrise or SHP breach this agreement and such breach relates to a
particular Facility, neither Sunrise nor SHP shall be precluded from exercising
any rights or remedies which it may have under the laws of the jurisdiction in
which such Facility is located.
13.8 Amendments and Waivers. No term or provision of this Agreement
may be amended, waived, discharged or terminated orally but only by an
instrument in writing signed by the party against whom the enforcement of such
amendment, waiver, discharge or termination is sought. Any waiver shall be
effective only in accordance with its express terms and conditions.
13.9 Severability. Any provision of this Agreement which is
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such unenforceability without invalidating the remaining
provisions hereof, and any such unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction. To
the extent permitted by applicable law, the parties hereto hereby waive any
provision of law now or hereafter in effect which renders any provision hereof
unenforceable in any respect.
13.10 Headings. The captions in this Agreement are for convenience of
reference only and shall not define or limit any of the terms or provisions
hereof.
13.11 Counterparts. This Agreement may be executed in any number of
counterparts, and by any party on separate counterparts, each of which shall be
an original, and all of which together shall constitute one and the same
instrument.
13.12 References. All references in this Agreement to Articles and
Sections are to Articles and Sections contained in this Agreement unless a
different document is expressly specified.
13.13 Exhibits. Unless otherwise specified herein, each Exhibit
referred to in this Agreement is attached hereto, and each such Exhibit is
hereby incorporated by reference and made a part hereof as if fully set forth
herein.
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13.14 Attorneys' Fees. In the event either party brings an action to
enforce or interpret any of the provisions of this Agreement, the "prevailing
party" in such action shall, in addition to any other recovery, be entitled to
its reasonable attorneys' fees and expenses arising from such action and any
appeal or any bankruptcy action related thereto, whether or not such matter
proceeds to court. For purposes of this Agreement, "prevailing party" shall
mean, in the case of a person asserting a claim, such person is successful in
obtaining substantially all of the relief sought, and in the case of a person
defending against or responding to a claim, such person is successful in denying
substantially all of the relief sought.
13.15 Section 1031 Exchange. The parties agree and understand that, if
requested by either party, the other party shall cooperate in permitting the
requesting party to accomplish an exchange under Section 1031 of the Code;
provided, however, that such exchange shall not modify any terms of this
Agreement, shall not delay the Closing, shall not relieve Sunrise of any
liability for Sunrise's obligations hereunder, shall not cause SHP to incur any
liability or additional expense therefor or be required to take title to any
other property, and shall not cause SHP (except for customary consent to
assignment of this Agreement to an exchange intermediary) to incur obligations
to any third parties.
13.16 Closing Affidavits. Sunrise shall execute, and shall cause its
Affiliates to execute, at Closing, such affidavits and/or certifications as may
be necessary to consummate the transactions contemplated hereby, including
without limitation, non-imputation affidavits and affidavits necessary for a
"fairways endorsement" to be issued.
13.17. Joint and Several. Each of the parties defined as "Sunrise"
shall be jointly and severally liable with the other such parties for performing
all obligations of Sunrise under this Agreement.
13.18 Casualty and Condemnation.
(a) The risk of any loss or damage to the Facilities by fire
or other casualty before the Closing shall continue to be borne by Sunrise.
Sunrise shall promptly give SHP written notice of any fire or other casualty (in
any event within five (5) days of the occurrence of same, which notice shall
include a description thereof in reasonable detail and an estimate of the cost
of time to repair. In the event that any Facility shall suffer any fire or other
casualty or any injury and SHP does not elect to cancel this Agreement as
hereinafter provided, Sunrise shall repair the damage at its sole cost and
expense before the Closing Date (and SHP may elect to postpone the Closing Date
until the repairs are completed) or, at the option of SHP, make an appropriate
reduction in the Contributions herein set forth based on a reasonable
approximation of the cost of such repair as agreed by the parties plus any
deductibles. In the event of any material damage or destruction of any of the
Facilities, SHP, at any time thereafter, by written notice to Sunrise, shall
have the option to cancel this Agreement. For the purposes hereof, "material"
damage or destruction shall include any damage or destruction which would
require more than $250,000 per Facility to repair (including in said
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amount the amount of any revenues lost as a result of said fire or other
casualty). If SHP so elects to cancel this Agreement, this Agreement shall
terminate and be of no further force and effect and neither party shall have any
liability to the other hereunder, except as may be otherwise set forth herein
with regard to surviving provisions.
(b) The risk of any loss or damage to the Facilities by
condemnation before the Closing Date shall continue to be borne by Sunrise. In
the event any condemnation proceeding is commenced or threatened, Sunrise shall
promptly give SHP written notice thereof (in any event within five (5) days
after the occurrence of same), together with such reasonable details with
respect thereto as to which Sunrise may have knowledge. As soon thereafter as
the portion or portions of the Facility to be taken are reasonably determinable,
Sunrise shall give SHP written notice thereof ("Sunrise's Notice") together with
Sunrise's estimate of the value of the portion or portions of the Facility to be
so taken. In the event of any taking of any portion of any Facility or any means
of access thereto, SHP, by written notice to Sunrise at any time thereafter,
shall have the option to cancel this Agreement, in which event this Agreement
shall terminate and be of no further force and effect and neither party shall
have any liability to the other hereunder, except as may be otherwise set forth
herein with regard to surviving provisions. If SHP shall not so elect to cancel
this Agreement, then SHP's acquisition of the Interests and Contributions to the
Facility Owners shall be consummated as herein provided (without abatement) and
Sunrise shall pay over to SHP at the Closing all amounts theretofore received by
Sunrise in connection with such condemnation or insurance received therefor and
shall assign to SHP all rights to any future condemnation awards/proceeds due
with respect thereto. SHP shall be entitled to participate in any such
condemnation proceeding and Sunrise shall cooperate with SHP in such respect.
(c) The parties' obligations, if any, under this Section
13.17 shall survive the Closing.
[SIGNATURES FOLLOW ON NEXT PAGE]
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed as of the date first written above.
SUNRISE:
SUNRISE ASSISTED LIVING, INC., a Delaware
corporation
By: /s/Xxxxxx X. Xxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxx
--------------------------
Title: President
-------------------------
SUNRISE ASSISTED LIVING INVESTMENTS,
INC., a Virginia Corporation
By: /s/ Xxxxxx X. Xxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxx
--------------------------
Title: Vice President
--------------------------
SUNRISE ABINGTON ASSISTED LIVING, L.L.C.,
a Pennsylvania limited liability company
By: Sunrise Assisted Living Investments, Inc., a
Virginia corporation, sole member
By: /s/ Xxxxxx X. Xxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxx
--------------------------
Title: Vice President
--------------------------
SUNRISE XXXXX ASSISTED LIVING, L.L.C.,
a New Jersey limited liability company
By: Sunrise Assisted Living Investments, Inc., a
Virginia corporation, sole member
By: /s/ Xxxxxx X. Xxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxx
--------------------------
Title: Vice President
--------------------------
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SUNRISE SPRINGFIELD ASSISTED LIVING, L.L.C.,
a Virginia limited liability company
By: Sunrise Assisted Living Investments, Inc., a
Virginia corporation, sole member
By: /s/ Xxxxxx X. Xxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxx
--------------------------
Title: Vice President
--------------------------
SUNRISE GRANITE RUN ASSISTED LIVING, L.L.C.,
a Pennsylvania limited liability company
By: Sunrise Assisted Living Investments, Inc., a
Virginia corporation, sole member
By: /s/ Xxxxxx X. Xxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxx
--------------------------
Title: Vice President
--------------------------
SUNRISE HAVERFORD ASSISTED LIVING, L.L.C.,
a Pennsylvania limited liability company
By: Sunrise Assisted Living Investments, Inc., a
Virginia corporation, sole member
By: /s/ Xxxxxx X. Xxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxx
--------------------------
Title: Vice President
--------------------------
SUNRISE XXXXXX PLAINS ASSISTED LIVING, L.L.C.,
a New Jersey limited liability company
By: Sunrise Assisted Living Investments, Inc., a
Virginia corporation, sole member
By: /s/ Xxxxxx X. Xxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxx
--------------------------
Title: Vice President
--------------------------
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SUNRISE OLD TAPPAN ASSISTED LIVING, L.L.C.,
a New Jersey limited liability company
By: Sunrise Assisted Living Investments, Inc., a
Virginia corporation, sole member
By: /s/ Xxxxxx X. Xxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxx
--------------------------
Title: Vice President
--------------------------
SHP:
SENIOR HOUSING PARTNERS I, L.P., a Delaware
limited partnership
By: Senior Housing Partners I, L.L.C., a Delaware
limited liability company, its general partner
By: The ******** Insurance Company of
America, a New Jersey corporation, Managing
Member
By: /s/ Xxxx X. Dark
--------------------------
Name: Xxxx X. Dark
--------------------------
Title: Vice President
--------------------------
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EXHIBIT LIST
Exhibit A - Legal Description - Abington Facility
Exhibit B - Legal Description - Xxxxx Facility
Exhibit C - Legal Description - Westfield Facility
Exhibit D - Legal Description - Springfield Facility
Exhibit E - Legal Description - Granite Run Facility
Exhibit F - Legal Description - Haverford Facility
Exhibit G - Legal Description - Xxxxxx Plains Facility
Exhibit H - Legal Description - Old Tappan Facility
Exhibit I - List of Tangible Personal Property
Exhibit J - [Omitted]
Exhibit K - List of Licenses
Exhibit L - Post-Closing Contributions Adjustment Threshold Schedule
Exhibit M - Schedule of Pending Litigation
Exhibit N - Forms of Resident Agreement
Exhibit O - Schedule of Facility Agreements
Exhibit P - List of Bank Accounts
Exhibit Q - List of Affordable Housing Units
Exhibit R - Confidentiality Agreement
Exhibit S - [Omitted]
Exhibit T - [Omitted]
Exhibit U - Rent Rolls
Exhibit V - [Omitted]
Exhibit W - Receivables
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FIRST AMENDMENT TO CONTRIBUTION AGREEMENT
THIS FIRST AMENDMENT TO CONTRIBUTION AGREEMENT (this "First Amendment") is dated
as of the 8th day of December, 2000, by and among (i) Sunrise Abington Assisted
Living, L.L.C., a Pennsylvania limited liability company ("Sunrise Abington"),
(ii) Sunrise Xxxxx Assisted Living, L.L.C., a New Jersey limited liability
company ("Sunrise Xxxxx"), (iii) Sunrise Springfield Assisted Living, L.L.C., a
Virginia limited liability company ("Sunrise Springfield"), (iv) Sunrise Granite
Run Assisted Living, L.L.C., a Pennsylvania limited liability company ("Sunrise
Granite Run"), (v) Sunrise Haverford Assisted Living, L.L.C., a Pennsylvania
limited liability company ("Sunrise Haverford"), (vi) Sunrise Xxxxxx Plains
Assisted Living, L.L.C., a New Jersey limited liability company ("Sunrise Xxxxxx
Plains"), (vii) Sunrise Westfield Assisted Living, L.L.C., a New Jersey limited
liability company ("Sunrise Westfield"), (viii) Sunrise Old Tappan Assisted
Living, L.L.C., a New Jersey limited liability company ("Sunrise Old Tappan"),
(ix) Sunrise Assisted Living Investments, Inc., a Virginia corporation
("SALII"), (x) Sunrise Assisted Living, Inc., a Delaware corporation ("SALI")
(Sunrise Abington, Sunrise Springfield, Sunrise Granite Run, Sunrise Haverford,
Sunrise Xxxxxx Plains, Sunrise Old Tappan, Sunrise Xxxxx, Sunrise Westfield,
SALI and SALII are hereinafter individually and collectively referred to as
"Sunrise") and (xi) Senior Housing Partners I, L.P., a Delaware limited
partnership (hereinafter referred to as "SHP").
W I T N E S S E T H:
WHEREAS, Sunrise and SHP have entered into that certain Contribution
Agreement dated as of October 11, 2000 (the "Contribution Agreement"); all
capitalized terms not otherwise defined herein shall have the meanings set forth
therein;
WHEREAS, SHP and Sunrise desire to amend the Contribution Agreement in
certain respects.
NOW, THEREFORE, for and in consideration of the sum of One hundred and
No/100 Dollars ($100.00), the mutual covenants contained herein, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, SHP and Sunrise, intending to be legally bound, agree as follows:
1. The definition of "Due Diligence Period" defined in Section 1.1 as:
"The period ending sixty (60) calendar days after execution of
this Agreement, during which SHP may investigate the financial,
legal, operational, environmental and all other aspects of the
Facilities as SHP may desire in order to determine whether to
consummate the transactions contemplated by this Agreement or
terminate this Agreement in accordance with Section 3.2,"
is hereby deleted for all purposes under the Contribution Agreement and the
following is inserted in lieu thereof for all purposes under the Contribution
Agreement:
"The period ending at 5:00 pm Eastern Time, December 19, 2000,
during which SHP may investigate the financial, legal,
operational, environmental and all other aspects of the Facilities
as SHP may desire in order to determine whether to consummate the
transactions contemplated by this Agreement or terminate this
Agreement in accordance with Section 3.2"
2. Inadvertently, Sunrise Westfield failed to execute the Contribution
Agreement. As stated in the Contribution Agreement, Sunrise Westfield is the
owner of the Westfield Facility and did intend and does
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presently intend to be legally bound by the provisions of the Contribution
Agreement, as amended hereby. By executing below, Sunrise Westfield hereby
ratifies, publishes, agrees to and consents to each and every representation,
warranty, covenant, term and condition of the Contribution Agreement, as amended
hereby, with Sunrise Westfield being bound by such representations, warranties,
covenants, terms and conditions as if Sunrise Westfield had executed the
Contribution Agreement as of October 11, 2000. Sunrise Westfield, and the other
parties comprising "Sunrise", hereby waive the right to claim Sunrise
Westfield's failure to sign the Contribution Agreement as a defense to the
enforcement of the Contribution Agreement against Sunrise Westfield or against
any other party comprising "Sunrise."
3. Except as specifically set forth herein, all other terms and conditions
of the Contribution Agreement shall remain unmodified and in full force and
effect, the same being ratified and confirmed hereby.
4. This First Amendment may be executed in any number of counterparts, each
of which shall constitute an original, but all of which taken together shall
constitute one and the same instrument, and any of the parties or signatories
hereto may execute this First Amendment by signing any such counterpart. A
photocopy or other facsimile of this First Amendment and all signatures hereon,
shall be deemed to be originals for all purposes.
[SIGNATURES APPEAR ON NEXT PAGE]
49
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment
to be executed by their duly authorized representatives as of the date and year
first above written.
SUNRISE:
SUNRISE ASSISTED LIVING, INC., a Delaware
corporation
By: /s/Xxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxx
----------------------------------
Title: President
----------------------------------
SUNRISE ASSISTED LIVING INVESTMENTS,
INC., a Virginia Corporation
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxx
----------------------------------
Title: Vice President
----------------------------------
SUNRISE ABINGTON ASSISTED LIVING, L.L.C.,
a Pennsylvania limited liability company
By: Sunrise Assisted Living Investments, Inc., a
Virginia corporation, sole member
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxx
----------------------------------
Title: Vice President
----------------------------------
SUNRISE XXXXX ASSISTED LIVING, L.L.C.,
a New Jersey limited liability company
By: Sunrise Assisted Living Investments, Inc., a
Virginia corporation, sole member
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxx
----------------------------------
Title: Vice President
----------------------------------
50
SUNRISE SPRINGFIELD ASSISTED LIVING, L.L.C.,
a Virginia limited liability company
By: Sunrise Assisted Living Investments, Inc., a
Virginia corporation, sole member
By: /s/ Xxxxxx X. Gorha
----------------------------------
Name: Xxxxxx X. Xxxxxx
----------------------------------
Title: Vice President
----------------------------------
SUNRISE GRANITE RUN ASSISTED LIVING, L.L.C.,
a Pennsylvania limited liability company
By: Sunrise Assisted Living Investments, Inc., a
Virginia corporation, sole member
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxx
----------------------------------
Title: Vice President
----------------------------------
SUNRISE HAVERFORD ASSISTED LIVING, L.L.C.,
a Pennsylvania limited liability company
By: Sunrise Assisted Living Investments, Inc., a
Virginia corporation, sole member
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxx
----------------------------------
Title: Vice President
----------------------------------
SUNRISE XXXXXX PLAINS ASSISTED
LIVING, L.L.C.,
a New Jersey limited liability company
By: Sunrise Assisted Living Investments, Inc., a
Virginia corporation, sole member
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxx
----------------------------------
Title: Vice President
----------------------------------
51
SUNRISE OLD TAPPAN ASSISTED
LIVING, L.L.C.,
a New Jersey limited liability company
By: Sunrise Assisted Living Investments, Inc., a
Virginia corporation, sole member
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxx
----------------------------------
Title: Vice President
----------------------------------
SHP:
SENIOR HOUSING PARTNERS I,
L.P., a Delaware limited partnership
By: Senior Housing Partners I, L.L.C., a Delaware
limited liability company, its general partner
By: The Prudential Insurance Company of
America, a New Jersey corporation,
Managing Member
By: /s/ Xxxx X. Dark
--------------------------------
Name: Xxxx X. Dark
-------------------------------
Title: Vice President
------------------------------
52
SECOND AMENDMENT TO CONTRIBUTION AGREEMENT
THIS SECOND AMENDMENT TO CONTRIBUTION AGREEMENT (this "Second Amendment") is
dated as of the 19th day of December, 2000, by and among (i) Sunrise Abington
Assisted Living, L.L.C., a Pennsylvania limited liability company ("Sunrise
Abington"), (ii) Sunrise Xxxxx Assisted Living, L.L.C., a New Jersey limited
liability company ("Sunrise Xxxxx"), (iii) Sunrise Springfield Assisted Living,
L.L.C., a Virginia limited liability company ("Sunrise Springfield"), (iv)
Sunrise Granite Run Assisted Living, L.L.C., a Pennsylvania limited liability
company ("Sunrise Granite Run"), (v) Sunrise Haverford Assisted Living, L.L.C.,
a Pennsylvania limited liability company ("Sunrise Haverford"), (vi) Sunrise
Xxxxxx Plains Assisted Living, L.L.C., a New Jersey limited liability company
("Sunrise Xxxxxx Plains"), (vii) Sunrise Westfield Assisted Living, L.L.C., a
New Jersey limited liability company ("Sunrise Westfield"), (viii) Sunrise Old
Tappan Assisted Living, L.L.C., a New Jersey limited liability company ("Sunrise
Old Tappan"), (ix) Sunrise Assisted Living Investments, Inc., a Virginia
corporation ("SALII"), (x) Sunrise Assisted Living, Inc., a Delaware corporation
("SALI") (Sunrise Abington, Sunrise Springfield, Sunrise Granite Run, Sunrise
Haverford, Sunrise Xxxxxx Plains, Sunrise Old Tappan, Sunrise Xxxxx, Sunrise
Westfield, SALI and SALII are hereinafter individually and collectively referred
to as "Sunrise") and (xi) Senior Housing Partners I, L.P., a Delaware limited
partnership (hereinafter referred to as "SHP").
W I T N E S S E T H:
WHEREAS, Sunrise and SHP have entered into that certain Contribution
Agreement, dated as of October 11, 2000 (the "Original Contribution Agreement"),
which Original Contribution Agreement was amended by First Amendment to
Contribution Agreement, dated as of December 8, 2000 ("First Amendment;" the
Original Contribution Agreement, as amended by the First Amendment, being
hereinafter referred to as the "Contribution Agreement");
WHEREAS, SHP and Sunrise desire to amend the Contribution Agreement in
certain respects. All capitalized terms not otherwise defined in this Second
Amendment shall have the meanings set forth in the Contribution Agreement;
NOW, THEREFORE, for and in consideration of the sum of One Hundred and
No/100 Dollars ($100.00), the mutual covenants contained herein, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, SHP and Sunrise, intending to be legally bound, agree as follows:
1. Pursuant to the provisions of Paragraph 1 of the First Amendment, the
Due Diligence Period provided for in Section 3.1 of the Contribution Agreement
expires at 5:00 p.m. on the date of this Second Amendment. SHP has completed its
investigations of the Owned Assets and elects not to terminate the Contribution
Agreement, subject to all of the remaining terms and conditions set forth in
this Second Amendment and subject to the conditions to Closing set forth in the
Contribution Agreement.
2. (a) During its inspection of the Owned Assets, SHP discovered three
items of a repair and maintenance nature which need to be corrected at the
Facilities (collectively, "Repair Items") as follows: (i) correcting certain
ADA/Fair Housing violations in each of the Facilities; (ii) replacing the common
area carpets in certain Facilities, and (iii) repairing and replacing the wood
rot damage to a porch in the Springfield Facility. The Repair Items are more
particularly described in the inspection reports for each Facility prepared by
Xxxx/Xxxxx Associates Ltd., each dated December 4, 2000. ("Xxxx/Okubo Reports").
(b) In consideration of SHP's agreement not to terminate the
Contribution Agreement during the Due Diligence Period, Sunrise hereby agrees
that Sunrise shall be obligated to correct and/or repair all of
53
the Repair Items at the sole cost and expense of Sunrise. All work shall be done
substantially as recommended in the Xxxx/Xxxxx Reports and in a manner
reasonably satisfactorily to SHP.
(c) Sunrise will use all reasonable efforts to cause the Repair Items to
be repaired and or corrected on or before the Closing Date. If the Repair Items
are not repaired or corrected to SHP's reasonable satisfaction on or before the
Closing Date, the estimated cost of accomplishing all of the Repair Items which
have not yet been completed will be disbursed from the Contributions and placed
in escrow to be applied to the cost of accomplishing the Repair Items and
Sunrise will acknowledge, in writing, at Closing, its continuing obligation to
accomplish all of the Repair Items at the sole expense of Sunrise, even if the
cost exceeds the amount placed in escrow. The parties acknowledge that the
estimated cost of the Repair Items is: (i) $5,000 per facility for the ADA/Fair
Housing compliance; (ii) approximately $195,000 for the cost to replace the
carpeting and (iii) approximately $20,000 to repair and replace the porch at the
Springfield Facility. If the Repair Items are not accomplished to SHP's
reasonable satisfaction prior to the Closing Date, and a portion of the
Contributions is placed in escrow and the cost of completing the Repair Items,
in the aggregate, is less than the amount of the escrow, Sunrise will be
entitled to a disbursement of any unused amount in the escrow account.
3. Sunrise and SHP have been informed that the Health Department (or other
regulatory authority) in the State of New Jersey is considering implementing a
regulation that would require each of the Facilities located in New Jersey to
install an emergency generator. If that requirement is enacted and made
applicable to the Facilities by the Health Department of New Jersey (or any
other regulatory authority) on or before December 31, 2001 (regardless of
whether actual installation is permitted after December 31, 2001), the cost and
expense of acquiring and installing the required emergency generator at each
Facility shall be borne solely by Sunrise and shall not be a Facility Expense.
If the requirement for the installment of such emergency generator is not
enacted or made applicable to the Facilities until after December 31, 2001, if
at all, the cost thereof shall be considered a Facility expense.
4. Section 2.7 of the Contribution Agreement is hereby deleted in its
entirety and replaced by the following:
"2.7 Accounts Receivable. As of the Proration Date, the
Facilities will have certain outstanding accounts receivable (the
"Receivables"). Sunrise will receive a credit at Closing in consideration of the
Facility Owners right to collect all Receivables after Closing which are not
more than 90 days past due as of the Closing Date. ("New Receivables"). Such
credit shall be in the amount equal to the lesser of (i) 75% of the New
Receivables outstanding as of the Closing Date or (ii) a sum to be determined by
mutual agreement by SHP and Sunrise. Sunrise shall not receive any credit at
Closing for any Receivables which are more than 90 days past due as of the
Closing Date ("Old Receivables"). Sunrise agrees that during the term of this
Agreement, it will cause the Facility Owners and Manager to continue to use
usual and customary procedures to collect all Receivables. Any and all payments
made to the Facility Owners from and after Closing, shall be applied in the
following order of priority: (i) first, to the account of the Facility Owners to
pay any obligations due with respect to periods from and after Closing; (ii)
second to the account of the Facility Owners to pay any New Receivables which
remain outstanding, and (iii) third, to Sunrise with respect to any Old
Receivables which remain outstanding."
5. Sunrise acknowledges receipt, on or before the expiration of the Due
Diligence Period, of SHP's Title Notice, dated December 18, 2000. Sunrise
acknowledges that it is in possession of all relevant Title Commitments, Surveys
and copies of all title exceptions and that the Title Notice complies, in all
respects, with the provisions of Section 7.3(b) of the Contribution Agreement.
6. Section 7.6 of the Contribution Agreement provides the condition to
Closing with respect to the Licenses for the Facilities. The parties have not
yet been able to determine the exact forms of applications
54
and the exact forms of renewal or new Licenses which need to be issued as a
result of the Transactions. Consequently, the forms of comfort letter which will
be issued either by the applicable authorities or by the regulatory counsel in
each state were not delivered to SHP at least five (5) business dates prior to
the expiration date of the Due Diligence Period as required by Section 7.6(a),
(b), (c). Sunrise will continue to use all reasonable efforts to obtain and
deliver the form of such comfort letters to SHP as soon as reasonably possible.
Upon receipt of the proposed forms of comfort letter for all three states
involved in the Transactions, SHP shall have five (5) business days in which to
terminate the Contribution Agreement (as modified by this Second Amendment), if
SHP is not satisfied, in its reasonable discretion, with the proposed form of
all the comfort letters. If SHP does not elect to terminate the Contribution
Agreement, all of the conditions to Closing with respect to the Licenses, and
all of Sunrise's obligations under the Contribution Agreement to continue to
cooperate with the transition of the Licenses, shall remain in full force and
effect.
7. Sunrise has disclosed to SHP a lawsuit which was filed in connection
with the Abington Facility. The lawsuit was filed October 13, 2000 in Xxxxxxxxxx
County, Pennsylvania, and is styled Xxxxx Xxxx v. Sunrise Abington Assisted
Living, L.L.C. and Sunrise Assisted Living Management, Inc. ("New Litigation").
The New Litigation will be added to Exhibit M to the Contribution Agreement and
all litigation disclosed on the revised Exhibit M will be made expressly part of
the indemnity agreement to be delivered by Sunrise at Closing pursuant to
Section 9.2(g) of the Contribution Agreement.
8. Except as specifically set forth here in, all other terms and conditions
of the Contribution Agreement shall remain unmodified and in full force and
effect, the same being ratified and confirmed hereby.
9. This Second Amendment may be executed in any number of counterparts,
each of which shall constitute an original, but all of which taken together
shall constitute one and the same instrument, and any of the parties or
signatories hereto may execute this Second Amendment by signing any such
counterpart. A photocopy or other facsimile of this Second Amendment and all
signatures hereon, shall be deemed to be originals for all purposes.
[SIGNATURES APPEAR ON NEXT PAGE]
55
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment
to be executed by their duly authorized representatives as of the date and year
first above written.
SUNRISE:
SUNRISE ASSISTED LIVING, INC., a Delaware
corporation
By: /s/Xxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxx
---------------------------------
Title: President
--------------------------------
SUNRISE ASSISTED LIVING INVESTMENTS,
INC., a Virginia Corporation
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxx
---------------------------------
Title: Vice President
---------------------------------
SUNRISE ABINGTON ASSISTED LIVING, L.L.C.,
a Pennsylvania limited liability company
By: Sunrise Assisted Living Investments, Inc., a
Virginia corporation, sole member
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxx
---------------------------------
Title: Vice President
---------------------------------
SUNRISE XXXXX ASSISTED LIVING, L.L.C.,
a New Jersey limited liability company
By: Sunrise Assisted Living Investments, Inc., a
Virginia corporation, sole member
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxx
---------------------------------
Title: Vice President
---------------------------------
56
SUNRISE SPRINGFIELD ASSISTED LIVING, L.L.C.,
a Virginia limited liability company
By: Sunrise Assisted Living Investments, Inc., a
Virginia corporation, sole member
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxx
---------------------------------
Title: Vice President
--------------------------------
SUNRISE GRANITE RUN ASSISTED LIVING, L.L.C.,
a Pennsylvania limited liability company
By: Sunrise Assisted Living Investments, Inc., a
Virginia corporation, sole member
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxx
---------------------------------
Title: Vice President
---------------------------------
SUNRISE HAVERFORD ASSISTED LIVING, L.L.C.,
a Pennsylvania limited liability company
By: Sunrise Assisted Living Investments, Inc., a
Virginia corporation, sole member
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxx
---------------------------------
Title: Vice President
--------------------------------
SUNRISE XXXXXX PLAINS ASSISTED
LIVING, L.L.C.,
a New Jersey limited liability company
By: Sunrise Assisted Living Investments, Inc., a
Virginia corporation, sole member
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxx
---------------------------------
Title: Vice President
---------------------------------
57
SUNRISE OLD TAPPAN ASSISTED
LIVING, L.L.C.,
a New Jersey limited liability company
By: Sunrise Assisted Living Investments, Inc., a
Virginia corporation, sole member
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxx
---------------------------------
Title: Vice President
---------------------------------
SHP:
SENIOR HOUSING PARTNERS I,
L.P., a Delaware limited partnership
By: Senior Housing Partners I, L.L.C., a Delaware
limited liability company, its general partner
By: The Prudential Insurance Company of
America, a New Jersey corporation,
Managing Member
By: /s/ Xxxx X. Dark
---------------------------------
Name: Xxxx X. Dark
-------------------------------
Title: Vice President
------------------------------
58
THIRD AMENDMENT TO CONTRIBUTION AGREEMENT
THIS THIRD AMENDMENT TO CONTRIBUTION AGREEMENT (this "Third Amendment") is dated
as of the 12th day of January, 2001, by and among (i) Sunrise Abington Assisted
Living, L.L.C., a Pennsylvania limited liability company ("Sunrise Abington"),
(ii) Sunrise Xxxxx Assisted Living, L.L.C., a New Jersey limited liability
company ("Sunrise Xxxxx"), (iii) Sunrise Springfield Assisted Living, L.L.C., a
Virginia limited liability company ("Sunrise Springfield"), (iv) Sunrise Granite
Run Assisted Living, L.L.C., a Pennsylvania limited liability company ("Sunrise
Granite Run"), (v) Sunrise Haverford Assisted Living, L.L.C., a Pennsylvania
limited liability company ("Sunrise Haverford"), (vi) Sunrise Xxxxxx Plains
Assisted Living, L.L.C., a New Jersey limited liability company ("Sunrise Xxxxxx
Plains"), (vii) Sunrise Westfield Assisted Living, L.L.C., a New Jersey limited
liability company ("Sunrise Westfield"), (viii) Sunrise Old Tappan Assisted
Living, L.L.C., a New Jersey limited liability company ("Sunrise Old Tappan"),
(ix) Sunrise Assisted Living Investments, Inc., a Virginia corporation
("SALII"), (x) Sunrise Assisted Living, Inc., a Delaware corporation ("SALI")
(Sunrise Abington, Sunrise Springfield, Sunrise Granite Run, Sunrise Haverford,
Sunrise Xxxxxx Plains, Sunrise Old Tappan, Sunrise Xxxxx, Sunrise Westfield,
SALI and SALII are hereinafter individually and collectively referred to as
"Sunrise") and (xi) Senior Housing Partners I, L.P., a Delaware limited
partnership (hereinafter referred to as "SHP").
W I T N E S S E T H:
WHEREAS, Sunrise and SHP have entered into that certain Contribution
Agreement, dated as of October 11, 2000 (the "Original Contribution Agreement"),
which Original Contribution Agreement was amended by First Amendment to
Contribution Agreement, dated as of December 8, 2000 ("First Amendment") and a
Second Amendment to Contribution Agreement dated as of December 19, 2000
("Second Amendment"), (the Original Contribution Agreement, as amended by the
First Amendment and Second Amendment, being hereinafter referred to as the
"Contribution Agreement"); and
WHEREAS, SHP and Sunrise desire to amend the Contribution Agreement in
certain respects. All capitalized terms not otherwise defined in this Third
Amendment shall have the meanings set forth in the Original Contribution
Agreement;
NOW, THEREFORE, for and in consideration of the sum of One Hundred and
No/100 Dollars ($100.00), the mutual covenants contained herein, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, SHP and Sunrise, intending to be legally bound, agree as follows:
1. Section 9.1 of the Contribution Agreement is hereby amended by deleting
the date "January 15, 2001" and replacing it with the date "February 9, 2001."
2. Except as specifically set forth here in, all other terms and conditions
of the Contribution Agreement shall remain unmodified and in full force and
effect, the same being ratified and confirmed hereby.
3. This Third Amendment may be executed in any number of counterparts, each
of which shall constitute an original, but all of which taken together shall
constitute one and the same instrument, and any of the parties or signatories
hereto may execute this Third Amendment by signing any such counterpart. A
photocopy or other facsimile of this Third Amendment and all signatures hereon,
shall be deemed to be originals for all purposes.
59
IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment
to be executed by their duly authorized representatives as of the date and year
first above written.
SUNRISE:
SUNRISE ASSISTED LIVING, INC., a Delaware
corporation
By: /s/Xxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxx
----------------------------
Title: President
----------------------------
SUNRISE ASSISTED LIVING INVESTMENTS,
INC., a Virginia Corporation
By: /s/ Xxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxx
----------------------------
Title: Vice President
----------------------------
SUNRISE ABINGTON ASSISTED LIVING, L.L.C.,
a Pennsylvania limited liability company
By: Sunrise Assisted Living Investments, Inc., a
Virginia corporation, sole member
By: /s/ Xxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxx
----------------------------
Title: Vice President
----------------------------
SUNRISE XXXXX ASSISTED LIVING, L.L.C.,
a New Jersey limited liability company
By: Sunrise Assisted Living Investments, Inc., a
Virginia corporation, sole member
By: /s/ Xxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxx
----------------------------
Title: Vice President
----------------------------
60
\
SUNRISE SPRINGFIELD ASSISTED LIVING, L.L.C.,
a Virginia limited liability company
By: Sunrise Assisted Living Investments, Inc., a
Virginia corporation, sole member
By: /s/ Xxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxx
----------------------------
Title: Vice President
----------------------------
SUNRISE GRANITE RUN ASSISTED LIVING, L.L.C.,
a Pennsylvania limited liability company
By: Sunrise Assisted Living Investments, Inc., a
Virginia corporation, sole member
By: /s/ Xxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxx
----------------------------
Title: Vice President
----------------------------
SUNRISE HAVERFORD ASSISTED LIVING, L.L.C.,
a Pennsylvania limited liability company
By: Sunrise Assisted Living Investments, Inc., a
Virginia corporation, sole member
By: /s/ Xxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxx
----------------------------
Title: Vice President
----------------------------
SUNRISE XXXXXX PLAINS ASSISTED
LIVING, L.L.C.,
a New Jersey limited liability company
By: Sunrise Assisted Living Investments, Inc., a
Virginia corporation, sole member
By: /s/ Xxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxx
----------------------------
Title: Vice President
----------------------------
61
SUNRISE OLD TAPPAN ASSISTED
LIVING, L.L.C.,
a New Jersey limited liability company
By: Sunrise Assisted Living Investments, Inc., a
Virginia corporation, sole member
By: /s/ Xxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxx
----------------------------
Title: Vice President
----------------------------
SHP:
SENIOR HOUSING PARTNERS I,
L.P., a Delaware limited partnership
By: Senior Housing Partners I, L.L.C., a Delaware
limited liability company, its general partner
By: The Prudential Insurance Company of
America, a New Jersey corporation,
Managing Member
By: /s/ Xxxx X. Dark
----------------------------
Name: Xxxx X. Dark
----------------------------
Title: Vice President
----------------------------
62
FOURTH AMENDMENT TO CONTRIBUTION AGREEMENT
THIS FOURTH AMENDMENT TO CONTRIBUTION AGREEMENT (this "Fourth Amendment") is
dated as of the 9th day of February, 2001, by and among (i) Sunrise Abington
Assisted Living, L.L.C., a Pennsylvania limited liability company ("Sunrise
Abington"), (ii) Sunrise Xxxxx Assisted Living, L.L.C., a New Jersey limited
liability company ("Sunrise Xxxxx"), (iii) Sunrise Springfield Assisted Living,
L.L.C., a Virginia limited liability company ("Sunrise Springfield"), (iv)
Sunrise Granite Run Assisted Living, L.L.C., a Pennsylvania limited liability
company ("Sunrise Granite Run"), (v) Sunrise Haverford Assisted Living, L.L.C.,
a Pennsylvania limited liability company ("Sunrise Haverford"), (vi) Sunrise
Xxxxxx Plains Assisted Living, L.L.C., a New Jersey limited liability company
("Sunrise Xxxxxx Plains"), (vii) Sunrise Westfield Assisted Living, L.L.C., a
New Jersey limited liability company ("Sunrise Westfield"), (viii) Sunrise Old
Tappan Assisted Living, L.L.C., a New Jersey limited liability company ("Sunrise
Old Tappan"), (ix) Sunrise Assisted Living Investments, Inc., a Virginia
corporation ("SALII"), (x) Sunrise Assisted Living, Inc., a Delaware corporation
("SALI") (Sunrise Abington, Sunrise Springfield, Sunrise Granite Run, Sunrise
Haverford, Sunrise Xxxxxx Plains, Sunrise Old Tappan, Sunrise Xxxxx, Sunrise
Westfield, SALI and SALII are hereinafter individually and collectively referred
to as "Sunrise") and (xi) Senior Housing Partners I, L.P., a Delaware limited
partnership (hereinafter referred to as "SHP").
W I T N E S S E T H:
WHEREAS, Sunrise and SHP have entered into that certain Contribution
Agreement, dated as of October 11, 2000 (the "Original Contribution Agreement"),
which Original Contribution Agreement was amended by First Amendment to
Contribution Agreement, dated as of December 8, 2000 ("First Amendment"), a
Second Amendment to Contribution Agreement dated as of December 19, 2000
("Second Amendment") and a Third Amendment to Contribution Agreement dated as of
January ___, 2001 ("Third Amendment") (the Original Contribution Agreement, as
amended by the First Amendment, Second Amendment and Third Amendment, being
hereinafter referred to as the "Contribution Agreement"); and
WHEREAS, SHP and Sunrise desire to amend the Contribution Agreement in
certain respects. All capitalized terms not otherwise defined in this Fourth
Amendment shall have the meanings set forth in the Original Contribution
Agreement;
NOW, THEREFORE, for and in consideration of the sum of One Hundred and
No/100 Dollars ($100.00), the mutual covenants contained herein, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, SHP and Sunrise, intending to be legally bound, agree as follows:
1. Section 9.1 of the Contribution Agreement is hereby amended by deleting
the date "February 9, 2001" and replacing it with the date "February 28, 2001."
2. Except as specifically set forth here in, all other terms and conditions
of the Contribution Agreement shall remain unmodified and in full force and
effect, the same being ratified and confirmed hereby.
3. This Fourth Amendment may be executed in any number of counterparts,
each of which shall constitute an original, but all of which taken together
shall constitute one and the same instrument, and any of the parties or
signatories hereto may execute this Fourth Amendment by signing any such
counterpart. A photocopy or other facsimile of this Fourth Amendment and all
signatures hereon, shall be deemed to be originals for all purposes.
63
IN WITNESS WHEREOF, the parties hereto have caused this Fourth Amendment
to be executed by their duly authorized representatives as of the date and year
first above written.
SUNRISE:
SUNRISE ASSISTED LIVING, INC., a Delaware
corporation
By: /s/Xxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxx
----------------------------------
Title: President
----------------------------------
SUNRISE ASSISTED LIVING INVESTMENTS,
INC., a Virginia Corporation
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxx
----------------------------------
Title: Vice President
----------------------------------
SUNRISE ABINGTON ASSISTED LIVING, L.L.C.,
a Pennsylvania limited liability company
By: Sunrise Assisted Living Investments, Inc., a
Virginia corporation, sole member
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxx
----------------------------------
Title: Vice President
----------------------------------
SUNRISE XXXXX ASSISTED LIVING, L.L.C.,
a New Jersey limited liability company
By: Sunrise Assisted Living Investments, Inc., a
Virginia corporation, sole member
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxx
----------------------------------
Title: Vice President
----------------------------------
64
SUNRISE SPRINGFIELD ASSISTED LIVING, L.L.C.,
a Virginia limited liability company
By: Sunrise Assisted Living Investments, Inc., a
Virginia corporation, sole member
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxx
----------------------------------
Title: Vice President
----------------------------------
SUNRISE GRANITE RUN ASSISTED LIVING, L.L.C.,
a Pennsylvania limited liability company
By: Sunrise Assisted Living Investments, Inc., a
Virginia corporation, sole member
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxx
----------------------------------
Title: Vice President
----------------------------------
SUNRISE HAVERFORD ASSISTED LIVING, L.L.C.,
a Pennsylvania limited liability company
By: Sunrise Assisted Living Investments, Inc., a
Virginia corporation, sole member
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxx
----------------------------------
Title: Vice President
----------------------------------
SUNRISE XXXXXX PLAINS ASSISTED
LIVING, L.L.C.,
a New Jersey limited liability company
By: Sunrise Assisted Living Investments, Inc., a
Virginia corporation, sole member
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxx
----------------------------------
Title: Vice President
----------------------------------
65
SUNRISE OLD TAPPAN ASSISTED
LIVING, L.L.C.,
a New Jersey limited liability company
By: Sunrise Assisted Living Investments, Inc., a
Virginia corporation, sole member
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxx
----------------------------------
Title: Vice President
----------------------------------
SHP:
SENIOR HOUSING PARTNERS I,
L.P., a Delaware limited partnership
By: Senior Housing Partners I, L.L.C., a Delaware
limited liability company, its general partner
By: The Prudential Insurance Company of
America, a New Jersey corporation,
Managing Member
By: /s/ Xxxx X. Dark
----------------------------------
Name: Xxxx X. Dark
--------------------------------
Title: Vice President
--------------------------------
