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EXHIBIT 10.56
MASTER PURCHASE AGREEMENT
This Master Purchase Agreement (as it may be amended and/or restated from
time to time, this "Agreement") is made as of the 22nd day of December, 1998 by
and between NATIONAL HEALTH INVESTORS, INC., a Maryland corporation (herein the
"Buyer") and ALTERNATIVE LIVING SERVICES, INC., a Delaware corporation (herein
the "Seller").
RECITALS:
A. Seller individually and through affiliated companies develops,
constructs and operates assisted living facilities (the "Projects") throughout
the United States.
B. Buyer has agreed to provide to Seller up to $100,000,000.00 for
sale/leaseback transactions relating to certain of the Projects, which
transactions are to close between the date of this Agreement and December 31,
1999, subject to the terms, provisions and conditions of this Agreement.
C. Seller and Buyer are entering into this Agreement to set forth the
terms and conditions under which Seller (or Seller's affiliated companies) will
sell and Buyer will purchase certain of the Projects to be leased to Seller.
D. Seller and Buyer may have multiple closings under this Agreement
through December 31, 1999.
NOW, THEREFORE, in consideration of the mutual covenants, conditions and
agreements set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Seller and Buyer
agree as follows:
ARTICLE I
1.1 Defined Terms. When used in this Agreement, the following terms shall
have the following meanings:
"Accounts Receivable" means all accounts receivable, including, without
limitation, all accounts receivable, loans receivable, any other receivables of
Seller with respect to the Facilities as determined in accordance with GAAP.
"Adjustment Date" means 11:59 p.m. on the date immediately prior to the
Closing Date.
"Agreement" means this Master Purchase Agreement, together with the
Exhibits attached hereto, as the same shall be amended from time to time in
accordance with the terms hereof.
"Approvals" has the meaning set forth in Article IV hereof.
"Closing" has the meaning set forth in Section 3.1 hereof.
"Closing Date" has the meaning set forth in Section 3.1 hereof.
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"Closing Documents" has the meaning set forth in Section 3.1 hereof.
"Contracts" means collectively those agreements (other than the Operating
Leases and Operating Permits) under which Seller conducts the business of the
Facilities.
"Environmental Assessments" has the meaning set forth in Section 7.3
hereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Event of Loss" means any loss or taking by condemnation, damage,
destruction or otherwise of or to any of the Purchased Assets.
"Facilities" and "Facility" have the meanings set forth in Section 2.3
hereof.
"Facility Leases" means collectively the leases of the Facilities executed
by an authorized representative of Buyer as landlord and an authorized
representative of Seller as tenant, as they may be amended from time to time in
accordance with the terms thereof, which Facility Leases shall be executed from
time to time simultaneously with the Closing Documents relating to the same
Facilities on one or more of the Closing Dates and shall be in a form
reasonably acceptable to Buyer, Seller and their respective counsel.
"Financial Statements" means the financial statements of the Facility
described in Section 5.6 hereof.
"GAAP" means generally accepted accounting principles consistently applied
(but for financial information prepared by Seller's management, such
information will not include footnotes required by GAAP).
"Hazardous Material" has the meaning set forth in Section 5.5(j) hereof.
"Indemnified Party" has the meaning set forth in Section 11.3(a) hereof.
"Indemnifying Party" has the meaning set forth in Section 11.3(a) hereof.
"Inspection Period" means the period set forth in Section 8.1(d) hereof.
"Inspection Reports" means the reports issued by governmental regulatory
bodies regarding the Facilities' compliance with regulations applicable
thereto.
"Inventory" means the operating supply of consumable supplies, including
drugs, medicines, materials and other supplies used in connection with the
operation of the Facilities.
"Limited Warranty Deeds" means collectively the limited warranty deeds by
which the Real Property is conveyed by Seller to Buyer by Facility, which deeds
are in the form of Exhibit A attached hereto and incorporated herein by this
reference.
"Operating Leases" means collectively those leases of Personal Property
used for the operations of any of the Facilities.
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"Operating Permits" means collectively those instruments issued by
appropriate governmental bodies that authorize Seller to engage in the
activities listed in such instruments.
"Permitted Exceptions" has the meaning set forth in Section 7.1 hereof.
"Person" means any individual, corporation, partnership, joint venture,
limited liability company, association, joint stock company, trust,
unincorporated organization, securities exchange, government or any agency or
political subdivision thereof or any other form of entity.
"Personal Property" with respect to a specific Facility means all
machinery, equipment (but not including computers, peripherals and other
computer hardware), furniture, fixtures, furnishings, linens, parts, Inventory
and other items of tangible personal property owned by Seller that are
necessary for the operation and/or maintenance of that Facility at the
expiration or earlier termination of the Facility Lease. All other personal
property owned by Seller at such time shall be excluded from the definition of
"Personal Property."
"Purchased Assets" means all of Seller's right, title and interest in and
to the Real Property and, to be effective only at the expiration, in and to the
following: (a) the Contracts, (b) the Inventory, (c) the Personal Property, (d)
the Operating Leases, (e) the Resident Agreements, (f) the Records, and (g) to
the extent (and only to the extent) permitted by applicable law or regulations,
the Operating Permits, but excluding the Retained Assets.
"Purchase Price" has the meaning set forth in Section 3.4 hereof.
"Real Property" means the tracts or parcels of real property more
particularly described on Exhibit B attached hereto and incorporated herein by
this reference, and all buildings, improvements and fixtures thereon, including
without limitation the Facilities, together with all strips and gores, rights
of way, easements, privileges and appurtenances pertaining thereto, including
any right, title and interest of Seller in and to any street adjoining any
portion of the Real Property.
"Records" means with respect to any specific Facility files and records,
including correspondence with Residents and suppliers, books of account,
employment records, Resident files, records pertaining to supplies, advertising
records, files and literature and other written materials of that Facility, but
subject to all patient confidentiality requirements.
"Resident" means a Person occupying a Unit pursuant to a Resident
Agreement.
"Resident Agreements" means with respect to any specific Facility
collectively all written and oral leases, occupancy agreements and other
agreements granting any Person the right to occupy certain portions of the Real
Property where that Facility is located existing at the termination of the
Facility Lease for that Facility.
"Retained Assets" means collectively those assets used by Seller in the
operation and/or maintenance of the Facilities, which assets are retained by
Seller and listed by Facility with specificity on Exhibit C attached hereto and
incorporated herein by this reference.
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"Retained Liabilities" means collectively all of the obligations and
liabilities of Seller.
"Seller's Closing Certificate" means the certificate of Seller in the form
of Exhibit D attached hereto and incorporated herein by this reference.
"Seller's Opinion of Counsel" means the opinion of Seller's counsel in the
form of Exhibit E attached hereto and incorporated herein by this reference.
"Subtenant" means with respect to any Facility, the affiliate of Seller
which will sublease that Facility from Seller.
"Surveys" has the meaning set forth in Section 7.2 hereof.
"Title Company" means Chicago Title Insurance Company, Xxxxxxxx Xxxxxxxx
Xxxx, , Xxxxxxx, Xxxxxxx .
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"Title Policies" has the meaning set forth in Section 7.1(a) hereof.
"Transfer Date" means the date Seller's rights to continue possession of
the Facilities is terminated, whether upon the expiration of the Facility
Leases or otherwise.
"Unit" means the licensed residential units at the Facilities.
ARTICLE II
2.1 Commitment Amount. Buyer will provide up to $100,000,000.00 to
purchase certain Projects from Seller for leaseback to Seller subject to the
terms and provision of this Agreement. The $100,000,000.00 amount shall
include the purchase price of the Facilities (as hereinafter defined) and such
transaction costs as Seller and Buyer may agree to be paid out of the
$100,000,000.00 Commitment. The Commitment is subject to being reduced if not
used by Seller as set forth in Section 2.2 hereof.
2.2 Reduction in Commitment Amount. To the extent that the amount of the
commitment funds used for closings under this Agreement through the end of the
calendar quarters shown below are less than the minimum aggregate amounts shown
below, the remaining unused commitment amount shall be reduced by the amount of
such short fall.
Minimum amount of
Aggregate Closings to
Time Period avoid reduction
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December , 1998 through
March 31, 1999 $25,000,000.00
December , 1998 through
June 30, 1999 $50,000,000.00
December , 1998 through
September 30, 1999 $75,000,000.00
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The reduction in the commitment as determined above is the cumulative
reduction.
2.3 Approval of Projects. Seller shall designate from time to time
specific Projects for Buyer's review and inspection and shall propose a
purchase price for such Project. Seller shall provide to Buyer plans and
specifications for construction, pro forma projections for each Project and
such other financial, marketing and feasibility information relating to such
Project, the Seller or the proposed Subtenant for that Project as Buyer shall
reasonably request. Buyer shall have the right to accept or reject any Project
for purchase under this Agreement and the proposed purchase price for that
Project. Those Projects which Buyer agrees to purchase hereunder are referred
to as the "Facilities" and each a "Facility". Buyer and Seller shall from time
to time prepare a schedule of the Facilities and the purchase price for such
Facility. If Buyer has closed its purchase hereunder of any Facility, Buyer
shall have no right to rescind or reverse that action at a later time based
upon any default by Buyer or Seller relating to other Facilities. Buyer and
Seller acknowledge and agree that notwithstanding anything set forth in this
Agreement to the contrary, a Facility or Facilities shall not be deemed to be
subject to this Agreement unless and until the conveyance thereof and
simultaneous leaseback actually closes.
2.4 Multiple Closings. Buyer shall purchase the Facilities from Seller in
one or more closings but not later than December 31, 1999.
2.5 Governing Agreement. The closing or closings of the Facilities shall
be subject to the terms, conditions and provisions of this Agreement.
2.6 Rate on Facility Leases. For Facilities conveyed to Buyer under this
Agreement and closed by April 16, 1999, the rate used to determine the Base
Rate under the Facility Lease for any such Facility shall be 9.5% per annum.
For Facilities conveyed to Buyer under this Agreement after April 16, 1999, the
Base Rent on the Facility Leases for those Facilities shall be calculated at
such rate as may be mutually agreed upon by Buyer and Seller.
2.7 Term of Facility Leases. The Facility Leases shall have an Initial
Term which expires December 31, 2012. The Facility Leases will grant to the
Tenant thereunder three renewal options of ten years each.
ARTICLE III
PURCHASE AND SALE
3.1 Closing. The closing of the purchase and sale of the Purchased Assets
relating to any specific Facility as described in this Agreement (each a
"Closing") shall be at such time and place and on such dates as may from time
to time be agreed upon by Buyer and Seller (the "Closing Date"); provided,
however, that each Closing Date shall be on or before thirty (30) days after
the expiration of the Inspection Period for any group of Facilities. This
Agreement and such other agreements or instruments as may be reasonably
necessary to consummate the transaction contemplated hereby with respect to any
specific Facility shall be collectively referred to as the "Closing Documents."
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3.2 Purchase, Sale and Lease. On the Closing Date and pursuant to all of
the terms and subject to all of the conditions of this Agreement, including
but not limited to Section 3.3 below, Seller shall sell, assign, convey,
transfer and deliver to Buyer, and Buyer shall purchase the Purchased Assets
relating to the Facilities then being sold subject only to the Permitted
Exceptions. No sale or other transfer of the Retained Assets shall occur.
Simultaneously with the Closing, Buyer, as landlord, and Seller, as tenant,
shall enter into the Facility Leases.
3.3 Seller's Continuing Interest in Certain Purchased Assets. The sale and
transfer to Buyer of the Contracts, the Inventory, the Personal Property, the
Operating Leases, the Resident Agreements, the Records, and the Operating
Permits is the sale of a future interest to become effective only upon the
expiration or termination of the Facility Lease. Seller shall retain at the
Closing Date all rights of ownership to the Purchased Assets except the Real
Property until the expiration or termination of the Facility Lease.
3.4 Payment on Closing. At the Closing, Buyer shall pay Seller the amount
set forth from time to time in a Schedule 3.4 to be prepared and signed by
Seller and Buyer (the "Purchase Price") for the Facilities listed thereon
either by (i) certified check drawn upon, or cashier's check of, a national
bank (or other banking institution as Seller may approve in writing) or (ii)
wire delivery of funds through the Federal Reserve System to an account
designated in writing by Seller, subject to any adjustments and prorations
provided for in this Agreement. The Purchase Price shall be allocated entirely
to the Real Property.
3.5 Closing Date Deliveries. On the Closing Date, the Closing for those
Facilities being sold shall take place as follows:
(a) Seller's Obligations. Seller shall deliver or cause to be
delivered to Buyer properly executed and dated as of the Closing Date:
(i) Limited Warranty Deeds for the Facilities being conveyed
at that Closing;
(ii) Seller's Closing Certificate;
(iii) Seller's Opinion of Counsel;
(iv) evidence that any notice that is required to be delivered
to the appropriate licensing and/or regulatory agency of any federal,
state or local government in connection with the sale of the
Facilities to Buyer has been given;
(v) all notices, agreements and/or consents, if any, that are
required to be given to or obtained from the appropriate licensing
and/or regulatory agency of any federal, state or local government in
connection with the sale of the Facilities to Buyer including without
limitation any Approvals;
(vi) if required by law, notice addressed to each Resident and
other tenant at the Facilities informing them of the sale of the
Facilities to Buyer as of the Closing Date and directing such
Resident and tenant to make all future payments under such Resident's
and tenant's lease to the Tenant in accordance with the terms of the
Facility Leases;
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(vii) owner's affidavits, as may be required by the Title
Company, executed and sworn to by an authorized representative of
Seller together with such other statements and instruments as may be
required by the Title Company insuring title to the Real Property in
order for the Title Company to issue the Title Policies subject only
to the applicable Permitted Exceptions;
(viii) possession and occupancy of the Real Property (subject
to the rights of Seller as tenant under the Facility Leases);
(ix) a written statement of an authorized representative of
Seller dated as of the Closing Date reaffirming that all
representations and warranties of Seller made in this Agreement are
true and correct in all material respects;
(x) payment, satisfaction and discharge of any and all
outstanding liens, mortgages, security interest and other
encumbrances securing the payment of any indebtedness affecting any
of the Purchased Assets;
(xi) a certification complying with the requirements of
Sections 1445 of the Internal Revenue Code of 1986, as amended, by
Seller that Seller is not a foreign person within meaning of such
section;
(xii) evidence reasonably satisfactory to Buyer and the Title
Company insuring title to the Real Property that Seller has a
requisite authority to perform its obligations under this Agreement
and the parties executing the Closing Documents on behalf of Seller
are incumbent and duly authorized to execute such closing
documentation on behalf of Seller;
(xiii) the Facility Leases;
(xiv) all other documents reasonably necessary or appropriate to
complete the transaction contemplated by this Agreement, including
without limitation the documents provided for in Article IX hereof.
(b) Buyer's Obligations. Buyer shall deliver or cause to be delivered
to Seller properly executed and dated as of the Closing Date:
(i) the Purchase Price for those Facilities;
(ii) the Facility Leases; and
(iii) all other documents reasonably necessary or appropriate to
complete the transaction contemplated by this Agreement.
3.6 Prorations and Adjustments.
(a) Other. All real property taxes and assessments, all personal
property taxes and assessments, all utility charges, wages, and other
costs and charges relating to the Facilities whether accruing before the
Closing Date or after shall be paid by Seller. All income from
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Seller's operation of the Facilities whether accruing for periods prior to
or after the Closing Date shall be retained by Seller.
(b) Use of Escrow. Seller and Buyer agree that the Closing shall be
effected through the escrow closing services of Chicago Title Insurance
Company, Atlanta, Georgia, Attention Xxxxx Xxxxxxxxx. Buyer and Seller
shall provide an instruction letter to Chicago Title Insurance Company for
the Closing.
3.7 Costs and Attorney's Fees. Seller shall pay all legal fees, costs and
expenses of Seller relating to the negotiation and preparation of this
Agreement, any of the Closing Documents and the costs and expenses described in
Section 7.7.
3.8 Sale and Use Taxes. All federal, state, local and other transfer or
sales and use taxes applicable to, imposed upon or arising out of the transfer
to Buyer of the Purchased Assets as contemplated by this Agreement shall be
paid by Seller.
ARTICLE IV
GOVERNMENTAL APPROVALS
It is specifically understood and agreed by Seller and Buyer that the
Closing shall be in all respects subject to Buyer's ascertaining to Buyer's
reasonable satisfaction that all applications and procedures, if any, necessary
to obtain approvals (collectively the "Approvals") from all necessary
government agencies in connection with the sale of the Purchased Assets from
Seller to Buyer have been properly executed and filed by Buyer and such other
entities, as necessary.
ARTICLE V
REPRESENTATION AND WARRANTIES OF SELLER
Seller, for itself, and on behalf of any wholly owned subsidiary or other
affiliate of Seller holding title to any of the Facilities that Seller now or
hereafter designates under Section 2.3 and which is accepted by Buyer, hereby
represents and warrants the following:
5.1 Organization. Seller is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware. Seller has the
power to own, lease and operate its properties and to carry on its business in
the places where such properties are now owned, leased or operated and such
business is now conducted. Complete and correct copies of Seller's Articles of
Incorporation and Bylaws in effect on the date hereof have been provided to
Buyer.
5.2 Authorization; Enforceability. The execution, delivery and performance
of this Agreement and the other Closing Documents required hereby to be
executed and delivered by Seller are within the corporate power of Seller and
have been duly authorized by all necessary corporate action by Seller. All
Persons executing this Agreement on behalf of Seller and to execute the other
Closing Documents on behalf of Seller are incumbent in the offices that such
officers purport to hold.
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The performance of this Agreement is, and of the other Closing Documents will
be, when executed and delivered to Buyer, the valid and binding obligations of
Seller enforceable against Seller in accordance with their respective terms
subject only to bankruptcy, insolvency, reorganization, moratoriums or similar
laws at the time in effect affecting the enforceability or rights of creditors
generally and by general equitable principles that may limit the right to
obtain equitable relief.
5.3 Absence of Conflicting Agreements. Except as set forth in Exhibit 5.3
attached hereto and incorporated herein by this reference, neither the
execution, delivery or performance of this Agreement by Seller nor the
consummation of the sale and purchase of the Purchased Assets or any other
transaction contemplated by this Agreement by Seller, does or will, after the
giving of notice, or the lapse of time, or otherwise:
(a) conflict with, result in a breach of, or constitute a default
under any Contract, Operating Lease, Resident Agreement or other
agreement, arrangement, commitment or plan to which Seller is party or by
which Seller is bound that relates to the ownership and/or operation of
any Purchased Asset;
(b) result in the creation of any mortgage, pledge, lien, claim,
charge or encumbrance upon any of the Purchased Assets;
(c) terminate, amend or modify, or give any party the right to
terminate, amend, modify, abandon or refuse to perform any Contract,
Operating Lease, Resident Agreement or other agreement, arrangement,
commitment or plan to which Seller is a party that relates to the
ownership and/or operation of any Purchased Asset;
(d) accelerate or modify, or give any party the right to accelerate
or modify, the time within which, or the terms under which, any duties or
obligations are to be performed, or any rights or benefits are to be
received, under any Contract, Operating Lease, Resident Agreement or other
agreement, arrangement, commitment or plan to which Seller is a party that
relates to the ownership and/or operation of any Purchased Asset; or
(e) require the consent of any other Person.
5.4 Title to Purchased Assets; Liens and Encumbrances. Seller owns good and
marketable title to all of the Purchased Assets free and clear of any and all
mortgages, liens, encumbrances, charges, claims, restrictions, pledges,
security interests or impositions except as otherwise permitted by the Facility
Leases.
5.5 Real Property. (a) The Real Property listed by Facility on Exhibit B
hereto includes all the Real Property used or usable in the operation of the
Facilities. Except as set forth on Exhibit 5.5(a) attached hereto and
incorporated herein by this reference, there are no liens, covenants,
restrictions or encumbrances on or against the Real Property or Seller's
interest therein;
(b) Seller has not received written notice of any default or breach
by Seller under any covenants, conditions, restrictions, rights-of-way or
easements affecting the Real Property or any portion thereof, and to
Seller's knowledge, no such default or breach now exists, nor has any
event occurred that, with the giving of notice, the passage to time, or
both, would constitute such a breach or default;
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(c) Seller has not received notice nor has any knowledge that either
the whole or any portion of the Real Property, including access thereto
or any easement benefiting the Real Property, is subject to temporary
requisition of use by any governmental authority or has been condemned or
taken in any proceeding similar to a condemnation proceeding, nor is there
now pending any condemnation, expropriation, requisition or similar
proceeding against the Real Property or any portion thereof;
(d) Seller has not received any written notices from any insurance
company of any defects of inadequacies in the Real Property or any part
thereof that would adversely affect the insurability of the Real Property
or the premiums for the insurance thereof. Seller has not received any
written notice requesting the performance of any repairs, alterations or
other work with which compliance has not been made from (i) any insurance
company that has issued a policy with respect to any portion of the Real
Property, (ii) any board of fire underwriters (or other body exercising
similar functions) or (iii) any other governmental body or agency;
(e) Except for Residents occupying the Facilities pursuant to the
Resident Agreements, there are no parties in possession of any portion of
the Real Property other than Seller and any subtenant;
(f) Except as may be shown on any survey provided to Buyer, Seller
has no knowledge that any portion of the Real Property is within any areas
determined to be flood prone under the Federal Flood Protection Act of
1973;
(g) The parcels constituting Real Property are respectively presently
zoned as set out on Exhibit 5.5(g) which zoning classification permits the
uses shown on Exhibit 5.5(g). To Seller's knowledge no zoning, building,
fire, air pollution or other federal, state or municipal law, ordinance,
regulation or restriction currently applicable to the Real Property is, or
as of the Closing Date will be, violated by the continued maintenance,
operation and/or use of the Real Property or any tract or portion thereof
or interest therein in its present manner;
(h) To Seller's knowledge neither the sewage nor any waste water
systems, life safety systems, nor the heating or air conditioning
equipment, incinerators, or other burning devices located on the Real
Property violate, or as of the Closing Date will violate, any applicable
federal, state or municipal laws, ordinances, orders, regulations or
requirements;
(i) The Real Property may be used and occupied for long term care,
assisted living, dementia care and related purposes and Seller knows of no
laws that prohibit the occupancy of any of the Real Property by a long
term care and an assisted living facility; other than the conditions or
stipulations imposed as a part of the land use or zoning approvals, which
conditions and stipulations remain as public records on file in the
offices of the applicable authority, there are no commitments or
agreements with any governmental authorities or agencies affecting the
Real Property of which Seller is aware that have not been disclosed in
writing to Buyer; all necessary licenses, certificates of occupancy and
permits have been obtained and are in full force and effect; and the
improvements located on the Real Property
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or the use thereof do not constitute non-conforming or disallowed uses
under any applicable law, ordinance or regulation;
(j) To Seller's knowledge and in reliance upon the environmental
assessment reports provided to Buyer (the "Environmental Reports"),
neither Seller, any Resident of the Facilities nor the Real Property is in
violation of any federal, state or local law, ordinance or regulation
relating to the environmental conditions on, under or about the Real
Property, or any adjacent properties, including, without limitation, soil
and ground water conditions. The Real Property is not now, nor to the best
knowledge of Seller has the Real Property ever been, used for the
generation, storage or disposal of, on, under or about the Real Property
of any Hazardous Materials except as may be allowed by applicable
governmental laws, rules and regulations governing the use of Hazardous
Materials at the Real Property. There is not now, nor to the best
knowledge of Seller and based on the information set forth in the
Environmental Reports has there been in the past, a release or threatened
release of Hazardous Materials from the Real Property (or, to the
knowledge of Seller, any adjacent property) into the environment. Seller
has not received, nor has knowledge that any prior owner has received,
written notice from any federal, state, county or municipal authority as
to the existence of Hazardous Materials or other environmental problems
at, or relating to, the Real Property. For purposes hereof, "Hazardous
Materials" shall include those materials regulated by the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended, U.S.C. 9016, et seq., Superfund Amendment and Reauthorization Act
of 1986 (XXXX), 42 U.S.C. 9601 et seq., The Resource Conservation and
Recovery Act, U.S.C. 6901, et seq., Occupational Safety and Health Act of
1970, the Toxic Substance Control Act, the Solid Waste Disposal Act, the
Clear Air Act, the Clean Water Act, and the regulations promulgated
pursuant to the above laws and in any comparable state, county and city
laws or ordinances and regulations. Seller hereby indemnifies, defends by
counsel reasonably acceptable to Buyer and holds harmless Buyer from and
against any and all claims, suits, causes of action, costs, expenses,
damages, fees, penalties and other liabilities, including all foreseeable
and unforeseeable consequential damages, directly or indirectly arising
out of the use, generation, storage and disposal of Hazardous Materials on
the Real Property, including without limitation, the cost of any required
or necessary repair, clean-up or other detoxification and the presentation
of any closure or other required plans, whether such action is
attributable directly or indirectly to the use, generation, storage or
disposal of Hazardous Materials on the Real Property during the period of
ownership of the Real Property by Seller or otherwise and except where
such matter arises out of the negligence or willful misconduct of Buyer.
Seller's obligations pursuant to the foregoing indemnity shall survive the
Closing;
(k) Seller has no knowledge of, nor has Seller received written
notice from any Resident of any Facility of, any defects in the structure,
roofs, mechanical, plumbing, electrical, heating, ventilating or air
conditioning systems on the Real Property; and
(l) All utilities, including without limitation, power, gas,
electricity, sewer, water and telephone, enter the Real Property upon and
are operated through valid public or private easements and rights-of-way
and all excess surface water runoff or drainage from the Real Property
flows or runs off the Real Property through valid public or private
easements and
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rights-of-way; all installation, connection and hook up charges for such
utilities have been paid in full; all permits and approvals for use of
such utilities have been obtained from all governmental agencies or
authorities or other entities regulating the use thereof; and there is
sufficient water, sewer, gas and electricity available to the Real
Property to properly service the intended use thereof.
5.6 Financial Statements etc. The financial statements of Seller previously
provided to Buyer have been prepared in accordance with GAAP and present fairly
the financial condition of Seller as of the dates indicated and the results of
their operation for the periods stated therein. The information regarding the
Facilities provided to Buyer pursuant to Section 2.3 remains true and correct
as of the date of closing.
5.7 No Changes. Except as disclosed in Exhibit 5.7 attached hereto and
incorporated herein by this reference or in the Financial Statements, there has
been no:
(a) transaction by Seller with respect to the Facilities except in
the ordinary course of business as conducted as of the date of this
Agreement;
(b) material adverse change in the financial condition, liabilities,
assets or business of the Facilities;
(c) to Seller's knowledge, default under any indebtedness of Seller
related to or affecting the Facilities or any event that with the lapse of
time or the giving of notice, or both, would constitute such a default;
(d) amendment or termination of any Contract, Operating Lease,
Operating Permit, Resident Agreement or other agreement to which Seller is
a party and related to the Facilities, except in the ordinary course of
business; or
(e) any other event or condition of any character that, to Seller's
knowledge, has or might reasonably have a material adverse effect on
Seller and/or the Purchased Assets.
5.8 No Litigation, Compliance with Laws. Except as set forth in Exhibit 5.8
attached hereto and incorporated herein by this reference,
(a) there is no judgment, litigation at law or in equity, arbitration
proceeding or proceeding before or by any commission, agency or other
administrative or regulatory body, authority or bankruptcy court, pending
or to Seller's knowledge threatened, to which Seller is a party or to
which Seller or the Purchased Assets are subject and would have a material
adverse effect on Seller and/or the Purchased Assets. There is no
investigation of which Seller has been made aware by any commission,
agency or other administrative or regulatory body or authority pending or
threatened that is concerned with the operations, business or affairs of
Seller that, if adversely determined would have a material adverse effect
on Seller; and
(b) the business and affairs of the Facilities have been carried on
by Seller in material compliance with all applicable federal, foreign,
state and local laws, statutes, ordinances, rules and regulations, and any
applicable court or administrative order.
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5.9 Taxes. Seller has properly filed all federal, state and local income
and other tax returns and reports that are required to be filed by it with
respect to each Facility with any governmental authority. Each such return and
report is true and correct in all material respects and all taxes, fees
and other governmental charges that are due have been paid or appropriate
extensions have been applied for. Seller shall furnish to Buyer, upon request,
copies of all such returns and reports, or such portion thereof as pertain to
the Purchased Assets.
5.10 Inventory. Seller will retain all Inventory and continue to use the
same in its operation of the Facilities under the Facility Leases.
5.11 Insurance. Seller has in full force and effect liability and casualty
insurance insuring the business, properties and assets of the Purchased Assets
as described by Facility in Exhibit 5.11 attached hereto and incorporated
herein by this reference. There have been in force since the acquisition of the
Facilities by Seller policies of insurance protecting the Purchased Assets
against all such losses and claims evidenced on Exhibit 5.11 hereof, and there
have been no gaps or lapses in such insurance coverage for such period.
5.12 No Brokers. Neither this Agreement nor the sale and purchase of the
Purchased Assets or any other transaction contemplated by this Agreement was
induced or procured through any Person acting on behalf of or representing
Seller as broker, finder, investment banker, financial advisor or in any
similar capacity.
5.13 Representations as of the Closing Date. Seller's representations and
warranties set forth in this Agreement shall be true and correct on the date of
this Agreement and as of each Closing Date, as though such representations and
warranties were made on and as of such time.
5.14 Disclosure. No statement of fact by Seller contained in this Agreement
and no written statement of fact furnished or to be furnished by Seller to
Buyer pursuant to this Agreement contains or will contain any untrue statement
of a material fact or omits or will omit to state a material fact necessary in
order to make the statements herein or therein contained not misleading.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
6.1 Organization. Buyer is a corporation duly organized and validly
existing under the laws of the State of Maryland and by the Closing Date will
be duly qualified to do business in the states in which the Facilities are
located. Buyer has full corporate power to purchase the Purchased Assets
pursuant to this Agreement and Buyer has the power to own, lease and operate
its properties and to carry on its business in the places where such properties
are now owned, leased or operated and where such businesses are now conducted.
6.2 Authorization; Enforceability. The execution, delivery and performance
of this Agreement and the other Closing Documents required hereby to be
executed and delivered by Buyer are within the corporate power of Buyer and
have been duly authorized by all necessary corporate
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action by Buyer. All Persons executing this Agreement on behalf of Buyer and to
execute the other Closing Documents on behalf of Buyer are incumbent in the
offices that such officers purport to hold. This Agreement is, and the other
Closing Documents will be, when executed and delivered by Buyer, the valid and
binding obligations of Buyer enforceable against Buyer in accordance with their
respective terms subject only to bankruptcy, insolvency, reorganization,
moratoriums or similar laws at the time in effect affecting the enforceability
or right of creditors generally and by general equitable principles that may
limit the right to obtain equitable relief.
6.3 No Brokers. Neither this Agreement nor the sale and purchase of the
Purchased Assets or any other transaction contemplated by this Agreement was
induced or procured through any Person acting on behalf of or representing
Buyer as broker, finder, investment banker, financial advisor or in any similar
capacity.
ARTICLE VII
DUE DILIGENCE
7.1 Title. (a) For the purposes of this Agreement, "good and marketable fee
simple title" shall mean fee simple ownership that is: (i) free of all claims,
liens and encumbrances of any kind or nature whatsoever other than the
applicable Permitted Exceptions, and (ii) insurable by the Title Company at the
then current standard rates under the standard form of ALTA owner's policy of
title insurance (ALTA Form B or equivalent), with the standard printed
exceptions therein deleted, without exception other than for the applicable
Permitted Exceptions and containing such coverages and endorsements as shall be
reasonably required by Buyer's counsel (collectively the "Title Policies"). For
the purposes of this Agreement, the term "Permitted Exceptions" shall mean: (A)
current taxes not yet delinquent; (B) the rights of Residents under Resident
Agreements;, and (C) such other matters not objected to in writing by Buyer
during the Inspection Period.
Buyer acknowledges and agrees that in each instance hereunder where Seller
represents and warrants or otherwise states that Seller's title to the Real
Property is "good and marketable fee simple title" that Seller is relying upon
the title insurance issued to Seller upon its purchase of the Real Property.
Seller is not acting as a title insuror with respect to the Real Property.
(b) During the Inspection Period, Buyer shall obtain a title insurance
commitment from the Title Company, examine title to the Real Property, and
give Seller written notice of objections that render Seller's title to the
Real Property less than good and marketable fee simple title. Thereafter,
Buyer shall have until the Closing Date in which to reexamine title to the
Real Property and in which to give Seller written notice of any additional
objections for matters not existing during the Inspection Period and
disclosed by such reexamination. Seller shall have until the Closing Date
in which to attempt to satisfy all objections specified in Buyer's initial
notice of title objections, and until the Closing Date in which to satisfy
the additional objections specified in the subsequent notice by Buyer of
title objections first disclosed during the re-examination provided for in
the second sentence of this Section 7.1(b). If Seller fails to satisfy any
such objections, then, at the option of Buyer, Buyer may:
(i) accept the Real Property with such defects and Buyer may
satisfy and discharge any lien, mortgage, or other security interest
encumbering the Real Property and deduct such payment therefor from
the Purchase Price; or
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(ii) postpone Closing for thirty (30) days, or such longer
period as Buyer may designate, during which xxxx Xxxxxx shall attempt
to correct the defects or objections, and if not then corrected,
Buyer may elect to act under Section 7.1(b)(i) hereof or Section
7.1(b)(iii) hereof; or
(iii) elect to terminate this Agreement by notice to Seller and
thereupon, except as otherwise noted herein, Buyer and Seller shall
be released and relieved of all further rights, liabilities and
obligations hereunder, except if such defect results from an act of
Seller after the date hereof, then Seller shall be in default
hereunder and Buyer shall have Buyer's rights and remedies under
Article XIII hereof.
7.2 Surveys. During the Inspection Period, Seller shall have the Seller's
existing as-built surveys of the Real Property recertified to Buyer by
surveyors registered and licensed in the State where the Facilities are
located, as applicable (collectively the "Surveys"). The Surveys shall depict
such information as Buyer shall reasonably require. If requested by Buyer, the
Surveys shall be used as the basis for the preparation of a legal descriptions
to be included in the Limited Warranty Deeds to be delivered by Seller to Buyer
at Closing.
7.3 Environmental Assessments. During the Inspection Period, Seller shall
have provided to Buyer the Phase I environmental site assessments of the Real
Property previously prepared for Seller (collectively the "Environmental
Assessments"). The Environmental Assessments shall contain such information as
Buyer shall reasonably require.
7.4 UCC Searches. During the Inspection Period, Buyer shall obtain with
regard to the Purchased Assets a UCC search certificate from such jurisdictions
as shall reasonably be determined by Buyer, and Seller shall deliver or cause
to be delivered any UCC-3 termination statements or other similar statements
required to deliver title to the Purchased Assets to Buyer subject only to the
Permitted Exceptions.
7.5 Financial Information, Pro Forma Statements. During the Inspection
Period, Seller shall provide to Buyer such additional financial information,
pro forma projections and the like regarding the Seller, the Facilities and the
Tenant(s) as Buyer may reasonably request. It is a condition to Buyer's
obligation to purchase any Facility that Buyer is satisfied with the financial
prospects of Seller and the Facilities.
7.6 Working Capital. During the Inspection Period, Buyer shall determine
what amount of working capital is needed for the operation and start up costs
of any specific Facility. Buyer shall designate for each Facility the amount
of working capital required by Buyer as a condition to purchasing that Facility
and how that working capital is to be provided by the Tenant or Seller. For
the Facilities conveyed in December 1998, Seller will execute a Working Capital
Reserve Agreement and deposit $ for working capital as listed in Schedule 3.4
hereto.
7.7 Expenses. Seller shall pay all costs, fees and charges incurred in
connection with the Closing Documents and any items required under the Closing
Documents, including any expenses incurred under Section 7.1, Section 7.2,
Section 7.3, Section 7.4 and Section 7.5 hereof together with
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all transfer and conveyance taxes, if any, relating to the transfer of the
Purchased Assets. Seller agrees to pay on demand all out-of-pocket costs and
expenses of Buyer (including the reasonable fees and out-of-pocket expenses of
counsel for Buyer and of local counsel, if any, whom Buyer's counsel
may retain) in connection with the preparation, negotiation, execution and
delivery of this Agreement and the other Closing Documents, even in the event
the subject transaction fails to close. Upon the occurrence of a default by
Seller under this Agreement, Seller shall pay all out-of-pocket costs and
expenses (including attorney's fees and legal expenses) incurred by Buyer in
connection with the enforcement of this Agreement and the other Closing
Documents. Seller, upon request, promptly will reimburse Buyer for all amounts
expended, advanced or incurred by Buyer to satisfy any obligation of Seller
under this Agreement or any other Closing Document which Seller has failed to
perform within a reasonable period following written notice from Buyer, or to
enforce the rights of Buyer under this Agreement or any other Closing Document,
which amounts will include all court costs, reasonable attorney's fees, fees of
auditors and accountants, and investigation expenses incurred by Buyer in
connection with any such matters. The provisions of this Section 7.8 shall
survive the termination, cancellation, rescission or closing of this Agreement.
ARTICLES VIII
CERTAIN MATTERS PENDING THE CLOSING
From and after the date of this Agreement and until the Closing Date:
8.1 Access and Inspection Period.
(a) Upon reasonable advance notice, Buyer and its authorized agents,
officers and representatives shall have access to the Purchased Assets to
conduct such examinations and investigations of the business of Seller and
the Purchased Assets as Buyer deems necessary, provided that such
examinations shall not unreasonably interfere with the operations and
activities of the Facilities.
(b) In addition to the information set forth on the Exhibits attached
hereto, within five (5) days following the date hereof, Seller shall
deliver to Buyer the following documents and items, which shall be true
and correct in all material respects at the time such documents and items
shall be delivered:
(i) Copies of the bills for 1998 Ad Valorem Taxes for the
Real Property;
(ii) A copy of Seller's existing title insurance policies;
(iii) Copies of all existing surveys of the Real Property in
Seller's possession;
(iv) Copies of the form of Resident Agreements used for the
Facilities and copies of all Operating Permits;
(v) Copies of the plans and specifications for the
improvements located on the Real Property in Seller's possession;
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(vi) Copies of all maintenance records, if any, for the period
of Seller's ownership and, to the extent in Seller's possession or
control, but not limited to, all records with respect to all
maintenance, repair or replacement regarding the roof on any
improvements on the Real Property, the parking lots and drainage,
mechanical systems or other repair or improvements regarding the
Real Property;
(vii) Copies of certificates of occupancy for the improvements
located on the Real Property;
(viii) Current letters from appropriate governmental authority
setting forth the type of zoning of the Real Property and a copy of
the ordinance describing the permitted uses, setbacks and other
conditions of such zoning;
(ix) Copies of all existing studies and reports in Seller's
possession relating to asbestos and hazardous materials, substances
and toxins performed at or relating to the Real Property; and
(x) Copies of any reports, letters or other documentation
received by Seller during its period of ownership from any
governmental authority, insurance company, engineer or other Person
requiring or recommending any repairs or work be done to the Real
Property.
(c) In addition, Seller agrees to promptly provide to Buyer on a
continuing basis through the Closing Date information with respect to any
changes or additions or corrections to the information and/or documents
delivered to Buyer in connection with this Agreement or the Exhibits
attached hereto. For the purposes of this Agreement, Buyer shall be deemed
only to have received all such information, documents and Exhibits upon
the date that all such information, documents and/or Exhibits shall be
delivered to Buyer and Seller shall have sent to Buyer a written notice
pursuant to Section 14.5 hereof, which notice shall certify that all the
information, documents and Exhibits required by this Agreement have been
delivered to Buyer.
(d) Buyer shall have ten (10) days from the later of: (i) the date
hereof, or (ii) the date of receipt of all of the documents and items set
forth in Section 8.1(b) hereof with respect to specific Facilities, in
which to review the Exhibits and other documents and items required to be
delivered hereby, and to determine, in Buyer's sole discretion, whether to
proceed with the transaction contemplated herein (the "Inspection
Period"). If Buyer, in its sole discretion, is not satisfied with the
transaction contemplated by this Agreement for any reason, Buyer shall
send a notice to Seller on or before the expiration of the Inspection
Period rejecting that specific Facility and if such notice is given, the
rejected Facility shall no longer be subject to the provisions of this
Agreement.
8.2 Notice of Adverse Changes. Prior to the Closing Date, Seller shall give
Buyer prompt notice of the occurrence of any of the following of which Seller
becomes aware:
(a) an Event of Loss;
(b) the commencement of any proceeding or litigation at law or in
equity or before any commission, agency or administrative or regulatory
body of authority that involves any Operating Permit or that could have a
material adverse effect on any of the Purchased Assets;
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(c) any organized grievance, strike or dispute materially adversely
affecting the business or operation of any of the Facilities;
(d) any material violation by Seller or any of the Purchased Assets of
any federal, state or local law, statute, ordinance, rule or regulation;
(e) any event that would cause the representations and/or warranties
made by Seller herein to be untrue or inaccurate in any material respect.
8.3 Operations Pending Closing. From the date hereof through the Closing
Date, Seller shall:
(a) operate the Facilities in the ordinary course of business in
accordance with good practices and maintain supplies of Inventories at
normal levels in accordance with industry practices;
(b) operate the Facilities in accordance with applicable laws,
requirements, rules and regulations;
(c) maintain the Personal Property in its current condition, wear and
tear and ordinary usage excepted, and replace any of the Personal Property
that shall be worn out, lost, stolen or destroyed;
(d) not purchase, sell, lease, mortgage, pledge or otherwise acquire
or dispose of any properties or assets relating to or comprising the
Purchased Assets, except in the ordinary and regular course of the
operation of the Facilities or as otherwise permitted in this Agreement;
(e) maintain in full force and effect policies of liability and
casualty insurance of the same type, character and coverage as the
policies currently carried with respect to the business, operations and
assets of the Facilities;
(f) use its best efforts to maintain and preserve the business
organization of the Facilities intact, maintain the relationships of the
Facilities with their suppliers and Residents.
8.4 Financial and Other Reports. Upon receipt, Seller promptly will furnish
Buyer with a copy of Seller's monthly financial reports for each Facility
prepared after the date of this Agreement and all reports filed with
governmental entities with respect to each Facility after the date hereof. In
addition, Seller will furnish Buyer with copies of any Inspection Reports
received by Seller after the date hereof.
8.5 Publicity. After the date of this Agreement and prior to the Closing
Date, except as otherwise required by law, applicable rules and regulations
promulgated thereunder or the rules of the National Association of Securities
Dealers, Inc., any notices, releases, statements and communications to
employees, suppliers, distributors, Residents and customers of Seller and to
the
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general public and the press relating to the transactions covered by this
Agreement shall be made only at such times and in such manner as may be
mutually agreed upon by Buyer and Seller.
8.6 Cooperation. Seller, with Buyer's cooperation, will: (a) secure the
consents of third parties necessary for the transfer of the Purchased Assets
from Seller to Buyer; and (b) give notices to any governmental authority, and
secure the permission, approval, determination, consent or waiver of any
governmental authority, required by law in connection with the transfer of the
Purchased Assets from Seller to Buyer.
ARTICLE IX
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER
Each and every obligation of Buyer to be performed on the Closing Date
shall be subject to the satisfaction prior to or at the Closing of the
following express conditions precedent.
9.1 Compliance with Agreement. Seller shall have performed and complied in
all respects with all of its obligations under this Agreement, which
obligations are to be performed or complied with by it prior to or on the
Closing Date.
9.2 Proceedings and Instruments Satisfactory. All proceedings, corporate
and other, to be taken by Seller in connection with the performance of this
Agreement and all Closing Documents shall be complete and Seller shall have
made available to Buyer for examination the originals or true and correct
copies of all documents that Buyer may reasonably request in connection with
the transactions contemplated by this Agreement.
9.3 Representations and Warranties. The representations and warranties made
by Seller in this Agreement shall be true and correct as of the Closing Date
with the same force and effect as though such representations and warranties
has been made on the Closing Date.
9.4 No Adverse Change. Between the date of this Agreement and the Closing
Date, there shall have been no material adverse change in the financial
condition or results or operation of the Facilities nor any material adverse
change in the condition of the Purchased Assets.
9.5 Deliveries at Closing. Seller shall have delivered or cause to be
delivered to Buyer the Closing Documents, each properly executed and dated as
of the Closing Date, as required by this Agreement.
9.6 Approvals and Consent. There shall have been secured such permissions,
approvals, determinations, consents and waivers, if any, as may be required by
law, regulatory authorities, the Contracts, Operating Leases, Resident
Agreements and Operating Permits.
9.7 Due Diligence. The terms and conditions of Article IV, Article VII and
Article VIII shall have been satisfied in full.
9.8 Absence of Investigations and Proceedings. Except as may be disclosed
in writing to Buyer and accepted by Buyer, there shall be no decree, judgment,
order or litigation at law or in equity, arbitration proceedings, or proceeding
before or by any commission, agency or other
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administrative or regulatory body or authority pending which would result
in a violation of Section 9.4 above, including any with respect to
condemnation, zoning, use or occupancy. Without limiting the generality of the
foregoing, no proceeding or formal investigation by any governmental agency
shall be pending with the object of challenging or preventing the Closing and
no other proceedings shall be pending with such object or to collect damages
from Buyer on account thereof. No action or proceeding shall be pending before
any governmental body to revoke, refuse to review or to modify in any material
respect the Operating Permits.
9.9 Operating Permits. The Operating Permits shall not have been modified
in any way that materially and adversely affects the Facilities or the conduct
of the business operations thereof. The Facilities shall be operating in
material compliance with all applicable laws, requirements, rules and
regulations.
9.10 No Mortgage or Liens. On the Closing Date and simultaneously with the
Closing, the Real Property will be free of any and all liens, mortgages,
encumbrances or other claims of any nature whatsoever except for the Permitted
Exceptions.
9.11 Working Capital. The working capital required for each Facility shall
have been provided in a form acceptable to Buyer.
9.12 Failure to Satisfy Conditions Precedent. In the event any or all of
the above conditions precedent have not been satisfied on or before the Closing,
Buyer shall have the right to exercise Buyer's rights and remedies under
Article XII hereof.
ARTICLE X
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER
Each and every obligation of Seller to be performed on the Closing Date
shall be subject to the satisfaction prior to or at the Closing of the
following express conditions precedent.
10.1 Compliance with Agreement. Buyer shall have performed and complied in
all respects with all of its obligations under this Agreement, which
obligations are to be performed or complied with by it prior to or on the
Closing Date.
10.2 Proceedings and Instruments Satisfactory. All proceedings, corporate
and other, to be taken by Buyer in connection with the transactions
contemplated by this Agreement and all Closing Documents shall be complete and
Buyer shall have made available to Seller for examination the originals or true
and correct copies of all documents that Seller may reasonably request in
connection with the transactions contemplated by this Agreement.
10.3 Representations and Warranties. The representations and warranties by
Buyer shall be true and correct as of the Closing Date with the same force and
effect as though said representations and warranties have been made on the
Closing Date.
10.4 Deliveries at Closing. Buyer shall have delivered or cause to be
delivered to Seller the Closing Documents, each properly executed and dated as
of the Closing Date, and Buyer shall have made the payments described in
Section 3.4 hereof, all as required by this Agreement.
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10.5 Failure to Satisfy Conditions Precedent. In the event any or all of
the above conditions precedent have not been satisfied on or before the Closing,
Seller shall have the right either to (a) waive such condition and proceed to
close in accordance with the terms of this Agreement, or (b) exercise Seller's
rights and remedies under Article XIII hereof.
ARTICLE XI
INDEMNIFICATION
11.1 Indemnification by Seller.
(a) If the transactions contemplated herein shall close, Seller shall
indemnify and hold harmless Buyer, its successors and assigns and all
directors, officers, employees and representatives of each of the
foregoing and promptly defend such Persons from and against, and reimburse
such Persons for, any and all losses, damages, costs, expenses,
liabilities, obligations and claims of any kind (including, without
limitation, reasonable attorney's fees and other legal costs and expenses)
that such Persons may at any time suffer or incur, or become subject to,
as a result of or in connection with:
(i) any breach or inaccuracy of any of the representations and
warranties made by Seller in or pursuant to this Agreement, or in any
instrument, certificate or affidavit delivered by Seller at the
Closing in accordance with the provisions of this Agreement;
(ii) any failure by Seller to carry out, perform, satisfy and
discharge any of its covenants, agreements, undertakings, liabilities
or obligations under this Agreement or under any of the documents and
materials delivered by Seller pursuant to this Agreement;
(iii) the Retained Liabilities;
(iv) the operation of the business of the Purchased Assets prior
to the Closing Date; or
(v) any suit, action or other proceeding brought by any
governmental authority or Person arising out of, or in any way
related to, any of the matters referred to in this Section 11.1.
11.2 Indemnification by Buyer.
(a) If the transactions contemplated herein shall close, Buyer (or its
successor(s) in title) shall indemnify and hold harmless Seller, its
successors and all assigns and all directors, officers, employees and
representatives of each of the foregoing and promptly defend such Persons
from and against, and reimburse such Persons for, any and all losses,
damages, costs, expenses, liabilities, obligations and claims of any kind
(including, without limitation, attorney's fees and other legal costs and
expenses) that such Persons may at any time suffer or incur, or become
subject to, as a result of or in connection with:
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(i) any breach or inaccuracy of any representations and
warranties made by Buyer in or pursuant to this Agreement, or in any
instrument, certificate or affidavit delivered by Buyer at the
Closing in accordance with the provisions of this Agreement;
(ii) any failure by Buyer to carry out, perform, satisfy and
discharge any of its covenants, agreements, undertakings, liabilities
or obligations under this Agreement or under any of the documents and
materials delivered by Buyer pursuant to this Agreement;
(iii) any suit, action or other proceeding brought by any
governmental authority or Person arising out of, or in any way
related to, any of the matters referred to in this Section 11.2.
11.3 Notification of Claims.
(a) A party entitled to be indemnified pursuant to Section 11.1 or
Section 11.2 hereof (the "Indemnified Party") shall notify the party
liable for such indemnification (the "Indemnifying Party") in writing of
any claim or demand that the Indemnified Party has determined has given or
could give rise to a right of indemnification under this Agreement.
Subject to the Indemnifying Party's right to defend in good faith third
party claims as hereinafter provided, the Indemnifying Party shall satisfy
its obligations under this Article XI within thirty (30) days after the
receipt of written notice thereof from the Indemnified Party.
(b) If the Indemnified Party shall notify the Indemnifying Party of
any claim or demand pursuant to Section 11.3(a), and if such claim or
demand relates to a claim or demand asserted by a third party against the
Indemnified Party that the Indemnifying Party acknowledges is a claim or
demand for which the Indemnifying Party must indemnify or hold harmless
the Indemnified Party under Section 11.1 or Section 11.2 hereof, the
Indemnifying Party may elect to defend any such claim or demand asserted
against the Indemnified Party. The Indemnified Party shall cooperate in
the defense of any such claim or demand. The Indemnifying Party shall
notify the Indemnified Party in writing within fifteen (15) days after the
date of the notice of claim given by the Indemnified Party to the
Indemnifying Party under Section 11.3(a) of the Indemnifying Party's
election to defend in good faith any such third party claim or demand. So
long as the Indemnifying Party is defending in good faith any such claim
or demand asserted by a third party against the Indemnified Party, the
Indemnified Party shall not settle or compromise such claim or demand. The
Indemnified Party shall make available to the Indemnifying Party or its
agents all records and other materials in the Indemnified Party's
possession reasonably required by the Indemnifying Party for its use in
contesting any third party claim or demand. In the event that the
Indemnifying Party shall acknowledge that such claim is one for which the
Indemnifying Party must indemnify or hold harmless the Indemnified Party
but elects not to defend, the Indemnified Party may, but shall not be
obligated to, assume the defense of such claim at the cost and expense of
the Indemnifying Party, subject to the right of the Indemnifying Party to
assume the defense of such claim at any time prior to settlement,
compromise or final determination thereof. Anything in this Section 11.3
to the contrary notwithstanding, (i) if there is a reasonable
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probability that a claim may materially and adversely affect the
Indemnified Party other than as a result of money damages or other money
payments, the Indemnified Party shall have the right, at its own cost and
expense, to defend, compromise or settle such claim, and (ii) the
Indemnifying Party shall not, without the Indemnified Party's written
consent, settle or compromise any claim or consent to entry of any
judgment that does not include an unconditional release from all liability
in respect to such claim given by the claimant or the plaintiff to the
Indemnified Party.
ARTICLE XII
EVENT OF LOSS
12.1 Event of Loss. Risk of loss resulting from any Event of Loss occurring
prior to Closing remains with Seller until Closing. If, prior to the Closing,
an Event of Loss occurs, Seller shall so notify Buyer, and Buyer may elect to
(a) cancel this Agreement, in which event all parties shall be relieved and
released of and from any further duties, obligations, rights or liabilities
hereunder except as otherwise provided for herein, or (b) Buyer may declare
this Agreement to remain in full force and effect and the purchase contemplated
herein, subject to such damage, shall be closed in accordance with the terms of
this Agreement, and at the Closing, Seller shall assign, transfer and set over
to Buyer all of the right, title and interest of Seller in and to any awards
and insurance proceeds or claims that have been or that may thereafter be made
for such Event of Loss, plus the amount of any insurance deductible
attributable thereto, if any.
ARTICLE XIII
RIGHTS AND REMEDIES
13.1 Seller's Remedies. With respect to those Facilities designated by
Seller under Section 2.3 and approved by Buyer, if Buyer breaches this
Agreement or any of the provisions herein, or if any representation or warranty
made by Buyer in this Agreement is untrue, false or incorrect, or if Buyer
shall not have performed Buyer's obligations herein set forth, then Seller may
terminate this Agreement with no liability on the part of any party to any
other party except as otherwise set forth in this Agreement and may seek such
damages and other remedies as are allowed under applicable law.
13.2 Buyer's Remedies. With respect to those Facilities designated by
Seller under Section 2.3 and approved by Buyer, if Seller breaches this
Agreement or any of the provisions herein, or if any representation or warranty
made by Seller in this Agreement is untrue, false or incorrect, or if Seller
shall not have performed Seller's obligations herein set forth, then Buyer
shall be entitled to:
(a) close the transaction contemplated by this Agreement, thereby
waiving such breach, default or failure, provided, however, Buyer may cure
any breach, default or failure that is susceptible to cure by the payment
of money and deduct from the Purchase Price all sums so paid by Buyer,
together with all costs and expenses incurred by of Buyer in affecting
such cure;
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(b) postpone the Closing hereunder for thirty (30) days, or such
longer period of time as Buyer may designate during which time any such
breach, default or failure shall be cured by Seller and if not then cured,
Buyer may elect to act under Section 11.2(a) hereof or Section 11.2(c)
hereof; or
(c) seek all of Buyer's rights and remedies at law or equity
including, but not limited to, specific performance of this Agreement and
of Seller's obligations, duties and covenants hereunder or termination of
this Agreement and recovery of all of Buyer's damages, including all
attorney's fees and court costs. The termination of this Agreement shall
have no effect upon Facilities previously conveyed to Buyer under this
Agreement.
ARTICLE XIV
FACILITY LEASE
For each Facility purchased by Buyer under this Agreement, Buyer shall
simultaneously enter into a Facility Lease for such Facility with Seller
pursuant to a Lease in substantially the form attached hereto as Exhibit F.
ARTICLE XV
MISCELLANEOUS
15.1 Further Assurances. From time to time after the Closing Date, upon the
reasonable request of Buyer, Seller shall execute and deliver or cause to be
executed and delivered such further instruments of conveyance, assignment and
transfer and take such further action as Buyer may reasonably request in order
to more effectively perfect the sale, assignment, conveyance and transfer, and
to record title to any of the Purchased Assets. Seller agrees to cooperate with
Buyer in all reasonable respects to assure to Buyer the continued title to and
possession of the Purchased Assets in the condition and manner contemplated by
this Agreement.
15.2 Survival. The obligations to indemnify contained in Article X hereof
and elsewhere in this Agreement, the agreements contained herein and the
representations and warranties made in this Agreement or made pursuant hereto
shall (a) survive the Closing and the consummation of the transactions
contemplated by this Agreement (except as otherwise provided herein), (b)
survive any independent investigation by Buyer or Seller (except as otherwise
provided herein), (c) survive any dissolution, merger or consolidation of Buyer
or Seller, and (d) bind the legal representatives, assigns and successors of
Buyer and Seller.
15.3 Entire Agreement, Amendment. This Agreement and the Closing Documents
to be delivered pursuant hereto constitute the entire agreement between the
parties pertaining to the subject matter hereof, and supersede all prior and
contemporaneous agreements, understandings, negotiations and discussions of the
parties, whether oral or written, and there are no warranties, representations
or other agreements between the parties in connection with the subject matter
hereof, except as specifically set forth herein. No amendment, supplement,
modification, waiver or termination of this Agreement shall be binding unless
executed in writing by both parties hereto. No waiver of any of the provisions
of this Agreement shall be deemed or shall constitute a waiver of any other
provision of this Agreement, whether or not similar, unless otherwise expressly
provided.
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15.4. Confidentiality.
(a) Buyer agrees that prior to the Closing Buyer, its agents,
representatives and assignees shall not use for its or their own benefit
(except when required by law and for use in connection with Buyer's
investigation of the Purchased Assets in connection with this Agreement)
and shall hold in strict confidence and not disclose (i) any data
or information relating to Seller, its affiliates or the Purchased Assets
obtained from Seller or any of its directors, officers, employees, agents
or representatives in connection with this Agreement, or (ii) any data
and/or information relating to the business, customers, financial
statements, conditions and/or operations of the Purchased Assets that is
confidential in nature and not generally known to the public (collectively
the "Seller's Information"). If the transactions contemplated in this
Agreement are not consummated for any reason, Buyer shall return to Seller
all data, information and any other written material obtained by Buyer
from Seller in connection with the transactions contemplated by this
Agreement and any copies, summaries or extracts thereof, and except as
noted herein, shall refrain from disclosing any of Seller's Information to
any third party or using any of Seller's Information for its own benefit
or that of any other Person.
(b) Seller agrees that prior to the Closing Seller, its agents and
representatives shall not use for their own benefit (except when required
by law and for use in connection with their respective investigations and
reviews of Buyer in connection with this Agreement) and shall hold in
strict confidence and not disclose (i) any data or information relating to
Buyer or its affiliates obtained from Buyer or any of its directors,
officers, employees, agents or representatives or assignees in connection
with this Agreement, or (ii) any data and/or information relating to the
business, customers, financial statements, conditions and/or operations of
Buyer that is confidential in nature and not generally known to the public
(collectively the "Buyer's Information"). If the transactions contemplated
in this Agreement are not consummated for any reason, Seller shall return
to Buyer all data, information and any other written material obtained by
Seller from Buyer in connection with the transactions contemplated by this
Agreement and any copies, summaries or extracts thereof, and except as
noted herein, shall refrain from disclosing any of Buyer's Information to
any third party or using any of the Buyer's Information for its own
benefit or that of any other Person.
(c) Buyer agrees not to communicate with employees of Seller without
the consent of Seller; provided, however, upon reasonable advance notice
and in the presence of an authorized representative of Seller, Seller
shall allow Buyer to conduct such interviews of Seller's employees as are
necessary for Buyer to complete transactions contemplated by this
Agreement.
15.5 Notices. All notices shall be in writing and shall be deemed to have
been properly given on the earlier of (a) when delivered in person, (b) within
three business days of its being deposited in the United States Mail, with
adequate postage, and sent by registered or certified mail with return receipt
requested, to the appropriate party at the address set out below, or (c) within
one business day when deposited with Federal Express, Express Mail or other
reputable overnight delivery service for next day delivery, addressed to the
appropriate party at the address set out below.
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If to Buyer: National Health Investors, Inc.
000 Xxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. XxxXxxxxx
Telephone: 615/000-0000
Fax: 615/000-0000
With copy to (which shall not
constitute notice):
Xxxxxx, Xxxxxxxx & Xxxxxxx
000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx III, Esq.
Telephone: 615/000-0000
Fax: 615/000-0000
If to Seller: Alternative Living Services, Inc.
000 Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxx X. Xxxxxxxxx
Telephone: 414/000-0000
Telecopy No.: 414/789-6182
with a copy to: Xxxxxx & Xxxxxx
2700 International Tower
Peachtree Center
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxxxx X. Xxxx
Telephone: 404/000-0000
Telecopy No.: 404/525-2224
Rejection or other refusal by the addressee to accept or the inability of
the courier service or the United States Postal Service to deliver because of a
changed address of which no notice was given shall be deemed to be receipt of
the notice sent. Any party shall have the right, from time to time, to change
the address to which notices to it shall be sent by giving to the other party
or parties at least ten (10) days prior written notice of the changed address
in the manner provided herein.
15.6 Counterparts; Headings. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but such counterparts
shall together constitute but one and the same agreement. Article and Section
headings in this Agreement are inserted for convenience of reference only and
shall not constitute a part hereof.
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15.7 Income Tax Position. Neither Buyer nor Seller shall take a position for
income tax purposes that is inconsistent with this Agreement.
15.8 Severability. If any provision, clause or part of this Agreement or the
application thereof under certain circumstances is held invalid, the remainder
of this Agreement or the application of such provision, clause or part under
other circumstances shall not be affected thereby.
15.9 No Reliance. Except for any assignees permitted by Section 13.10
hereof:
(a) no third party is entitled to rely on any of the representations,
warranties and agreements of Buyer and Seller contained in this Agreement;
and
(b) Buyer and Seller assume no liability to any third party because of
any reliance on the representations, warranties and agreements of Buyer
and Seller contained in this Agreement.
15.10 Assignment. Buyer shall have the right at any time to assign this
Agreement in whole or in part to any Person. If such an assignment is made, the
sale made pursuant to this Agreement shall be consummated in the name of such
assignee, which shall succeed to all of the rights, obligations and liabilities
of Buyer hereunder, however Buyer shall not thereby be released and relieved of
all obligation and liability hereunder.
15.11 Time of Essence. Time if of the essence in connection with this
Agreement.
15.12 Singular/Plural; Gender. Where the context so requires or permits,
the singular form includes the plural, the use of the plural form includes the
singular and the use of any gender includes any and all genders. As used
herein "Seller" shall mean and refer to Alternative Living Services, Inc., a
Delaware corporation and shall also include any wholly owned subsidiaries or
other affiliate of Seller holding title to any of the Facilities that Seller
now or hereafter designates under Section 2.3 and which Facility is thereafter
accepted by Buyer.
15.13 Governing Law. This Agreement is to be governed by and construed in
accordance with the laws of the State of Tennessee except to the extent that
the laws of the state in which the Real Property is located require such law to
govern the enforcement of this Agreement.
15.14 Jury Trial. SELLER AND BUYER HEREBY KNOWINGLY, WILLINGLY AND
IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO DEMAND A JURY TRIAL IN ANY ACTION
OR PROCEEDING INVOLVING THIS AGREEMENT OR ANY OF THE OTHER CLOSING DOCUMENTS OR
ANY RELATIONSHIP BETWEEN SELLER AND BUYER. SELLER AND BUYER WARRANT AND
REPRESENT THAT EACH HAS REVIEWED THE FOREGOING WAIVERS WITH ITS LEGAL COUNSEL
AND EACH HAS KNOWINGLY AND VOLUNTARILY WAIVED ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, THIS SECTION 15.14
MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
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SELLER:
ALTERNATIVE LIVING SERVICES, INC., a
Delaware corporation
By: /S/ Xxxx X. Xxxxxxxxx
--------------------------------
Print Name: Xxxx X Xxxxxxxxx
------------------------
Title: Senior Vice President
-----------------------------
[signature page for master purchase agreement.
remainder of page is blank]
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BUYER:
NATIONAL HEALTH INVESTORS, INC.,
a Maryland corporation
By: /s/ Xxxxxxx X. XxXxxxx, Xx.
-----------------------------------
Xxxxxxx X. XxXxxxx, Xx., Vice
President
[signature page for master purchase agreement.
remainder of page is blank]
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