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Exhibit 10.23
PURCHASE AND SALE AGREEMENT
THIS AGREEMENT is made and entered into as of the 25th day of November,
1996 by and between Brim, Inc. ("Brim"), an Oregon corporation, Brim Senior
Living, Inc. ("BSL"), an Oregon corporation and Brim Pavilion, Inc., an Oregon
corporation ("BPI") (collectively "Seller") and Plaza Enterprises, L.L.C., a
Nevada limited liability company ("Purchaser").
RECITALS
A. Seller is the owner of certain rights and interests related to three
medical office buildings in Portland, Oregon, Scottsdale, Arizona and Los
Angeles, California.
B. Seller is interested in selling those rights and interests and
Purchaser is interested in acquiring the same.
C. Seller and Purchaser are interested in documenting the terms and
conditions under which said purchase and sale shall occur.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants of the parties set forth herein, IT IS HEREBY AGREED AS
FOLLOWS:
AGREEMENT
PURCHASE AND SALE.
1. On the terms and subject to the conditions set forth herein, Seller
shall sell, assign, transfer and convey to Purchaser and Purchaser shall
purchase and accept the following assets:
a. All of Seller BPI's right, title and interest in and to its general
partnership interest (the "Pavilion Partnership Interest") in
Physician's Pavilion Partners Limited Partnership, an Oregon limited
partnership (the "Pavilion Partnership");
b. All of Seller BPI's right, title and interest in and to its general
partnership interest (the "Scottsdale Partnership Interest") in
Scottsdale Limited Partnership, an Oregon limited partnership (the
"Scottsdale Partnership");
c. All of Seller BSL's right, title and interest in and to that Lease
of Real Property and Lease-Back of Real Property Agreement dated
November 28, 1989 between BSL and the County of Los Angeles (the "MLK
Lease") with respect to the real property located in Los Angeles,
California and more particularly described in Exhibit A (the "MLK Real
Property") and all of BSL's right, title and interest in (i) the
fixtures and improvements located on the MLK Real Property including
that two story, 10,250 square foot medical office building known as the
MLK Medical Office Building (collectively the "MLK MOB"), and (ii) any
and
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all security deposits, pre-paid rents or other similar sums paid to
and/or being held by Seller in connection therewith (the "MOB Cash")
(Seller's right, title and interest in the MLK Lease and the MLK MOB
are collectively referred to as the "MLK Interests").
d. All of Seller Brim's right, title and interest in and to that
Medical Office Building Management Agreement dated December 1, 1993
between Physicians Pavilion Partners Limited Partnership and Brim, as
successor in interest by merger to Brim Enterprises, Inc.
(the "Pavilion Management Agreement").
e. All of Seller Brim's right, title and interest in and to that
Medical Office Building Management Agreement dated December 26, 1991
between Scottsdale Limited Partnership and Brim, as successor in
interest by merger to Brim Enterprises, Inc. (the "Scottsdale
Management Agreement").
Hereinafter the foregoing shall sometimes be collectively referred to
as "Seller's Assets."
PURCHASE PRICE
2. The purchase price payable by Purchaser to Seller for Seller's Assets shall
be equal to the sum of (i) Four Hundred Six Thousand Five Hundred and no/100
Dollars ($406,500.00) and (ii) the outstanding principal balance due under that
Promissory Note dated November 20, 1990 executed by BSL in favor of US National
Bank of Oregon and any and all documents executed in conjunction therewith (the
"MLK Loan Documents"), a true and correct copy of which are attached hereto as
Exhibit B. The purchase price shall be payable by the delivery of immediately
available funds at Closing in the amount of $406,500 as the same may be adjusted
by the net costs and prorations provided for in Paragraph 5 and reduced by the
amount of the MOB Cash, if any and (iii) the assumption at Closing of the MLK
Loan Documents. The cash portion of the purchase price shall be allocated among
the Seller's Assets as follows:
Pavilion Partnership Interest $347,000
Scottsdale Partnership Interest $ 2,499
MLK Real Property, MLK MOB,
MLK Lease $ 57,000 (plus assumption of the
debt evidenced by the MLK cost
documents)
Management Agreements $ 1
In the event that prior to the Closing Date, a material portion of the
MLK Real Property or the MLK MOB shall have been damaged or destroyed by fire or
other casualty, or shall have been taken or condemned by any public or
quasi-public authority under the power of eminent domain, Purchaser shall not
have the right to terminate but the purchase price due at Closing which is
allocable to the MLK Interests (calculated by reference to the cash portion of
the purchase price associated thereto and the then outstanding principal balance
due under the MLK Loan Documents) shall be reduced by such amount as is fair and
equitable in light of the nature of such damage or
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destruction and Seller shall assign to Purchaser all of its rights to any
insurance proceeds or condemnation award and all claims in connection therewith.
CLOSING
3. Provided all of the conditions to closing set forth in Paragraphs 13 and 14
have been satisfied or waived, the Closing of the purchase and sale under this
Agreement (the "Closing") shall take place on the date on which the closing of
the Other Brim Transactions (as defined below) occurs (the "Closing Date").
Closing shall occur at the offices of Seller or at such other place as Purchaser
and Seller may mutually agree. Time is of the essence hereto.
CONVEYANCE
4. Conveyance of the Seller's Assets to Purchaser shall be effected by (i) an
Assignment and Assumption Agreement in the form attached hereto as Exhibit C,
duly executed by Seller BPI in the case of the Pavilion Partnership Interest and
the Scottsdale Partnership Interest and (ii) an Assignment and Assumption
Agreement and Xxxx of Sale in the form attached hereto as Exhibit D, duly
executed by Seller BSL in the case of the Pavilion Management Agreement, the
Scottsdale Management Agreement, and the MLK Interests and (iii) an Assignment
and Assumption Agreement and Xxxx of Sale in the form attached hereto as Exhibit
E, duly executed by Seller Brim in the case of the Pavilion Management Agreement
and the Scottsdale Management Agreement (collectively, the "Conveyancing
Documents"). Title to the MLK Interests, the Pavilion Partnership Interest and
the Scottsdale Partnership Interest shall be conveyed from Seller to Purchaser
free and clear of all liens, charges, easements and encumbrances of any kind,
and on and as of the Closing Date, the MLK Real Property, the MLK MOB, the
Pavilion Real Property and Improvements (as hereinafter defined) and the
Scottsdale Real Property and the Scottsdale Improvements (as hereinafter
defined) shall each be vested in the fee owner thereof free and clear of all
liens, charges, easements and encumbrances of any kind other than the following
(the "Permitted Encumbrances"):
a. A lien for real estate taxes that are not yet due and payable;
b. Such items of record as would be reflected in a title report
prepared with respect to the MLK Real Property, the Pavilion Real
Property and the Scottsdale Real Property;
c. The effect of laws, ordinances and governmental regulations binding
thereon, including, but not limited to, all applicable building,
zoning, land use and environmental ordinances and regulations affecting
such real property interests;
d. The MLK Lease, the MLK Subleases, the Airspace Lease, the Master
Lease, the Pavilion Subleases and the Scottsdale Leases (as such terms
are hereinafter defined); and
e. Any Liens evidencing, or securing the obligations under, the MLK
Loan Documents.
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COSTS, PRORATIONS AND ADJUSTMENTS
5. The costs of the transaction and the expenses related to the ownership and
operation of the Seller's Assets shall be allocated between Seller and Purchaser
as follows:
a. Seller shall pay any transfer or documentary stamp or excise tax due
on the recording of the assignment and transfer of the MLK Interests
and the quitclaim deed referenced in Paragraph 4.
b. All revenues which can be identified as of the Closing Date, which
relate to the period prior to the Closing Date and which have not been
collected by Seller as of the Closing Date, including but not limited
to rent due from Los Angeles County under the MLK Lease and
distributions due to Seller BPI with respect to the Pavilion
Partnership Interest and the Scottsdale Partnership Interest (the
"Pre-Closing Revenues") and all expenses which can be identified as of
the Closing Date, which relate to the period prior to the Closing Date
and which have not been paid as of the Closing Date, including
principal and interest due under the MLK Loan Documents (the
"Pre-Closing Expenses") related to the ownership or operation of the
Seller's Assets shall be the property and/or responsibility of Seller;
provided, however, that the net amount thereof shall serve to increase
or decrease the cash portion of the purchase price due from Purchaser
to Seller at Closing, after which Purchaser shall be entitled to retain
all such Pre-Closing Revenues when collected after Closing and shall be
obligated to pay all such Pre-Closing Expenses after Closing.
c. If and to the extent Seller BSL is responsible therefor under the
terms of the MLK Lease and the amount thereof can be identified at
Closing, real and personal Property taxes with respect to the MLK Real
Property and/or the MLK MOB shall be prorated as of the Closing Date,
with Seller BSL responsible therefor for the period prior to the
Closing Date; provided, however, that the net amount thereof shall
serve to increase or decrease the cash portion of the purchase price
due from Purchaser to Seller at Closing, after which Purchaser shall be
obligated to pay all such taxes as and when the same come due after
Closing.
d. If and to the extent Seller BSL is responsible therefor under the
terms of the MLK Lease, Seller BSL shall arrange for a final statement
with respect to all utilities serving the MLK Real Property and the MLK
MOB as of the Closing Date and shall pay all fees identified thereon
and Purchaser shall arrange for all such utilities to be billed in its
name from and after the Closing Date and shall pay all fees due
therefor as of the Closing Date.
e. Purchaser and Seller shall each pay their own attorney's fees.
f. Purchaser and Seller shall share any escrow fees on a 50-50 basis.
g. Purchaser shall pay any and all costs, fees and expenses related to
its assumption of the MLK Loan Documents.
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h. Purchaser shall be responsible for all of the expenses related to
the ownership and operation of the Seller's Assets from and after the
Closing Date, including any expenses which relate to the period prior
to the Closing Date whether or not included in the Pre-Closing Expenses
for which Purchaser receives a credit at Closing.
POSSESSION
6. At Closing, Purchaser shall be entitled:
a. To exercise and enjoy all of the rights and privileges appurtenant
to or arising from the Pavilion Partnership Interest and the Scottsdale
Partnership Interest including, without limitation, the right to
receive distributions, the right to manage the applicable partnership
as the general partner thereof, and the right to vote as a partner in
the applicable partnership on matters submitted to partnership vote or
consent;
b. To exercise and enjoy all of the rights and privileges of the
"Developer" under the MLK Lease;
c. To exercise and enjoy all of the rights and privileges of the
"Manager" under the Pavilion Management Agreement and the Scottsdale
Management Agreement; and
d. To possession of the MLK MOB.
In each case subject to the rights and/or obligations of the other
party or parties to, as applicable, the Agreement of the Scottsdale Limited
Partnership Agreement dated December 26, 1991 (the "Scottsdale Partnership
Agreement"), the First Amended and Restated Agreement of Limited Partners of the
Physicians' Pavilion Partners Limited Partnership dated November 25, 1992 (the
"Pavilion Partnership Agreement"), the MLK Lease, the Pavilion Management
Agreement and the Scottsdale Management Agreement, the MLK Subleases, the
Pavilion Subleases and the Scottsdale Leases.
REPRESENTATIONS AND WARRANTIES
7. Each of Brim, BPI and BSL hereby warrants and represents to Purchaser with
respect to itself but not with respect to the other entity comprising Seller
that:
a. Status of Seller. It is a corporation duly organized, validly
existing and in good standing under the laws of the State of Oregon and
is duly qualified to do business in the States of Arizona and
California to the extent such qualification is required in connection
with its ownership of that portion of the Seller's Assets pertaining to
real or personal property located in such states.
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b. Seller's Authority. It has full power and authority to execute and
to deliver this Agreement and all related documents, and to carry out
the transaction contemplated herein. This Agreement is valid, binding
and enforceable against each of Brim, BPI and BSL in accordance with
its terms, except as such enforceability may be limited by creditors'
rights laws and applicable principles of equity. The execution of this
Agreement and the consummation of the transaction contemplated herein
do not result in a breach of the terms and conditions of nor constitute
a default under or violation of its charter or any law, regulation,
court order, mortgage, note, bond, indenture, agreement, license or
other instrument or obligation to which it is now a party or by which
it or any of its assets may be bound or affected.
c. Title. With respect to the title of the Seller's to the Seller's
Assets the Seller's represent as follows:
A. Seller BPI represent that:
(i) BPI has good and marketable title to the Pavilion
Partnership Interest and the Scottsdale Partnership Interest
free and clear of all liens and encumbrances.
(ii) The Pavilion Partnership has a valid, enforceable and
insurable leasehold interest in the airspace above the
Pavilion Real Property under and pursuant to that certain
Airspace Lease, free and clear of all liens or encumbrances
other than the Master Lease, those certain subleases listed in
Exhibit F to this Agreement (the "Pavilion Subleases"), and
the other liens and encumbrances permitted by the terms
hereof;
(iii) The Airspace Lease, in the form attached to this
Agreement as Exhibit G, is in full force and effect and
unmodified, and no event or circumstance exists or has
occurred that, with notice, the passage of time, or both,
would constitute a default under the Airspace Lease by either
OHSU or the Pavilion Partnership;
(iv) The Pavilion Partnership has good, marketable and
insurable fee title to the Pavilion Improvements, and the
Pavilion Partnership owns, or has a valid and enforceable
right to use, all of the other properties and assets occupied
by, used in or necessary to the conduct of the Pavilion
Partnership's business, in each case free and clear of all
liens and encumbrances other than the Master Lease, the
Pavilion Subleases and those other liens and encumbrances
permitted by the terms hereof;
(v) The Master Lease and each of the Pavilion Subleases, in
the form delivered to Purchaser before the date of the
Agreement, is in full force and effect and unmodified, and no
event or circumstance exists or has occurred that, with
notice, the passage of time, or both, would constitute a
default under either the Master Lease or
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any such Pavilion Subleases by either Pavilion Partnership,
OHSU or the physician subtenant thereunder;
(vi) With respect to the loan to the Pavilion Partnership and
secured, among other things, by the Airspace Lease and the
Pavilion Improvements, no event or circumstance exists or has
occurred that, with notice, the passage of time, or both,
would constitute a default under any document or instrument
evidencing or securing such loan;
(vii) Neither the Pavilion Partnership nor any real or
personal asset that it owns is currently in default or
violation of any regulation, court order, mortgage, note,
bond, indenture, agreement, license or other instrument or
obligation to which it or such assets are a party or are bound
or affected;
(viii) The Scottsdale Partnership has good, marketable,
insurable fee simple title to the Scottsdale Real Property and
Improvements, and the Scottsdale Partnership owns, or has a
valid and enforceable right to use, all of the other
properties and assets occupied by, used in or necessary to the
conduct of the Scottsdale Partnership's business, in each case
free and clear of all liens and encumbrances other than those
certain physician leases listed in Exhibit H to this Agreement
(the "Scottsdale Leases"), and the other liens and
encumbrances permitted by the terms hereof;
(ix) Each of the Scottsdale Leases is in full force and effect
and unmodified, and no event or circumstance exists or has
occurred that, with notice, the passage of time, or both,
would constitute a default under any Scottsdale Leases by
either the Scottsdale Partnership or a physician tenant
thereunder;
(x) With respect to the loan to the Scottsdale Partnership and
secured, among other things, by the Scottsdale Real Property
and Improvements, no event or circumstance exists or has
occurred that, with notice, the passage of time, or both would
constitute a default under any document or instrument
evidencing or securing such loan;
(xi) Neither the Scottsdale Partnership nor any real or
personal asset that it owns is currently in default or
violation of any regulation, court order, mortgage, note,
bond, indenture, agreement, license or other instrument or
obligation to which it or such assets are a party or are bound
or affected;
B. Seller BSL represents that:
(i) BSL has a valid, enforceable and insurable leasehold
interest in the MLK Real Property under and pursuant to the
MLK Lease, free and clear of all liens or encumbrances other
than those certain physician subleases listed in Exhibit I to
this
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Agreement (the "MLK Subleases"), and the other liens and
encumbrances permitted by the terms hereof;
(ii) The MLK Lease, in the form attached to this Agreement as
Exhibit J, is in full force and effect and unmodified, and
that no event or circumstance exists or has occurred that,
with notice, the passage of time, or both, would constitute a
default under the MLK Lease by either the County of Los
Angeles or BSL;
(iii) BSL has good, marketable and insurable fee title to the
MLK MOB, and BSL owns, or has a valid and enforceable right to
use, all of the other properties and assets occupied by, used
in or necessary to the conduct of its business at the MLK MOB,
in each case free and clear of all liens and encumbrances
other than the MLK Subleases and those other liens and
encumbrances permitted by the terms hereof;
(iv) Each of the MLK Subleases is in full force and effect and
unmodified, and that no event or circumstance exists or has
occurred that, with notice, the passage of time, or both,
would constitute a default under any such MLK Subleases by
either BSL or the physician subtenant thereunder.
(v) Neither BSL nor any real or personal asset that it owns in
connection with the business conducted at the MLK MOB is
currently in default or violation of any regulation, court
order, mortgage, note, bond, indenture, agreement, license or
other instrument or obligation to which it or such assets are
a party or are bound or affected;
C. Seller's Brim represents that each of the Pavilion
Management Agreement and the Scottsdale Management Agreement,
in the forms delivered to Purchaser before the date of this
Agreement, is in full force and effect and unmodified, and
that no event or circumstance exists or has occurred that,
with notice, the passage of time, or both, would constitute a
default under either such agreement by either party thereto.
As used in this Paragraph 7(c) and elsewhere in this Agreement, the
following terms shall have the following meanings:
Scottsdale Real Property means that certain real property
owned by the Scottsdale Partnership and more particularly
described in Exhibit K.
Scottsdale Improvements means all the fixtures and
improvements on the Scottsdale Real Property.
OHSU means Oregon Health Sciences University.
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Pavilion Real Property means that certain real property owned
by OHSU and more particularly described in Exhibit L.
Airspace Lease means that certain Air Rights Lease between the
Pavilion Partnership and OHSU dated November 25, 1992,
pursuant to which Pavilion Partnership has the right to use,
and has constructed the Pavilion Improvements in a portion of,
the airspace above the Pavilion Real Property.
Pavilion Improvements means all of the improvements
constructed and owned by the Pavilion Partnership pursuant to
the Airspace Lease.
Master Lease means that certain Master Lease between OHSU and
the Pavilion Partnership dated December 12, 1991, under which
OHSU leases space in the Pavilion Improvements.
d. Necessary Action. It will proceed with all due diligence to take all
action and obtain all consents prior to Closing necessary for it to
lawfully enter into and carry out the terms of this Agreement.
e. Taxes and Tax Returns. All tax returns, reports and filings of any
kind or nature required to be filed by it prior to Closing with respect
to its ownership and/or operation of the portion of the Seller's Assets
owned and/or operated by it or required to be filed prior to Closing by
the Scottsdale Partnership or the Pavilion Partnership have been
properly completed and timely filed in material compliance with all
applicable requirements and all taxes or other obligations which are
due and payable by it have been timely paid.
f. Litigation. There is no litigation, investigation, or other
proceeding pending or, to the best of its knowledge, threatened against
or relating to it, its properties or business, or the properties or
business of the Scottsdale Partnership or the Pavilion Partnership
which litigation, investigation or proceeding could have a material
adverse effect on the value of the Seller's Assets, or which would
prevent it from performing its obligations hereunder, and the
transaction contemplated herein has not been challenged by any
governmental agency or any other person, nor does it know or have
reasonable grounds to know, of any basis for any such litigation,
investigation or other proceeding. For purposes hereof, litigation, an
investigation or other proceeding shall be deemed to be pending if the
same has been served on it or it has otherwise been advised either
orally or in writing of the pendency thereof.
g. Books and Records. All of the books and records maintained by it
with respect to its ownership and/or operation of the portion of the
Seller's Assets owned by it are true and correct in all material
respects.
h. The MLK Loan Documents. Seller BSL represents that attached hereto
as Exhibit B is a true and correct copy of the MLK Loan Documents.
Seller BSL further represents that
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the MLK Loan Documents are in full force and effect and have not been
modified or amended except as set forth in Exhibit B. Seller BSL has no
knowledge or notice that it is in default of any of its obligations
under the MLK Loan Documents nor is it aware of any default or any
action which, with the passage of time or the giving of notice or both
would constitute such a default. Seller BSL represents and warrants
that the MLK Real Property, the MLK MOB, and the MLK Lease have
collectively been accounted for on its books and records under
generally accepted accounting principles as a contract receivable.
i. Environmental Matters. Except in accordance with, and in full
compliance with, any and all applicable governmental laws, regulations
and requirements (collectively, the "Environmental Laws") relating to
environmental and occupational health and safety matters and hazardous
materials, substances or wastes (as defined from time to time under any
applicable federal, state or local laws, regulations or ordinances),
(A) Seller BSL has not released into the environment, or discharged,
placed or disposed of any such hazardous materials, substances or
wastes or caused the same to be so released into the environment or
discharged, placed or disposed of at, on or under the MLK Real Property
or the MLK MOB, Seller BSL has not installed any underground storage
tanks on the MLK Real Property and Seller BSL has not used the MLK Real
Property as a dump for waste material and (B) Seller BPI has not
released nor has the Scottsdale Partnership or the Pavilion Partnership
released into the environment, or discharged, placed or disposed of any
such hazardous materials, substances or wastes or caused the same to be
so released into the environment or discharged, placed or disposed of
at, in or under the Pavilion Real Property or the Scottsdale Real
Property, respectively, Seller BPI has not installed any underground
storage tanks on the Pavilion Real Property or the Scottsdale Real
Property, respectively, and neither Seller BPI, the Scottsdale
Partnership nor the Pavilion Partnership has used the Scottsdale Real
Property or the Pavilion Real Property respectively as a dump for waste
material. To the best of Seller BSL's knowledge without a Phase I
Assessment of the MLK Real Property having been conducted by Seller
BSL, and to the best of Seller BPI's knowledge without a Phase I
Assessment of the Pavilion Real Property or the Scottsdale Real
Property having been conducted, (A) no hazardous materials, substances
or wastes are located on the MLK Real Property or the MLK MOB or the
Pavilion Real Property or the Scottsdale Real Property, respectively
or have been released by Seller BSL or Seller BPI into the environment
or discharged, placed or disposed of in, on or under the MLK Real
Property or the MLK MOB or the Pavilion Real Property or the Scottsdale
Real Property by Seller BSL or Seller BPI, respectively; no underground
storage tanks are located on the MLK Real Property or the Pavilion Real
Property or the Scottsdale Real Property, respectively; the MLK Real
Property has never been used by Seller BSL as a dump for waste material
and the MLK Real Property and the MLK MOB and the prior uses of the MLK
Real Property and the MLK MOB by Seller BSL and the Pavilion Real
Property and the Scottsdale Real Property and all prior uses thereof by
Seller BPI or by the Pavilion Partnership or the Scottsdale
Partnership, respectively at all times complied with all Environmental
Laws. Nothing herein shall be construed as a representation or warranty
by Seller BSL with respect to any compliance or non-compliance by Los
Angeles County with respect to its use of and operations at the MLK
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Real Property and the MLK MOB or by Seller BPI with respect to any
compliance or non-compliance by any of the tenants under the Pavilion
Subleases or the Scottsdale Leases.
j. Compliance with Law. With respect to the compliance of Seller's
Assets with applicable law, the Sellers represent as follows:
A. Seller BSL represents that:
(i) The MLK Real Property and the MLK MOB are in compliance
with all currently applicable municipal, county, state and
federal laws, regulations, ordinances, standards and orders
and with all municipal, health, building and zoning by-laws
and regulations (including, without limitation, the building
and zoning codes) where the failure to comply therewith or to
obtain a waiver therefrom could have a material adverse effect
on the business, property, condition (financial or otherwise)
or operation thereof;
(ii) There are no outstanding deficiencies or work orders of
any authority having jurisdiction over the MLK Real Property
or the MLK MOB requiring conformity to any applicable statute,
regulation, ordinance or by-law pertaining thereto; and
(iii) It is not aware of any claim, requirement or demand of
any agency supervising or having authority over the MLK MOB to
rework or redesign it or to provide additional furniture,
fixtures or equipment so as to conform to or comply with any
existing law, code or standard which has not been fully
satisfied prior to the date hereof or which will not be
satisfied prior to the Closing Date.
B. Seller BPI represents that:
(i) The Pavilion Property and the Scottsdale Property are in
compliance with all currently applicable municipal, county,
state and federal laws, regulations, ordinances, standards and
orders and with all municipal, health, building and zoning
by-laws and regulations (including, without limitation, the
building and zoning codes) where the failure to comply
therewith or to obtain a waiver therefrom could have a
material adverse effect on the business, property, condition
(financial or otherwise) or operation thereof;
(ii) There are no outstanding deficiencies or work orders of
any authority having jurisdiction over the Pavilion Property
or the Scottsdale Property requiring conformity to any
applicable statute, regulation, ordinance or by-law pertaining
thereto; and
(iii) It is not aware of any claim, requirement or demand of
any agency supervising or having authority over the Scottsdale
Property to rework or redesign
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it or to provide additional furniture, fixtures or equipment
so as to conform to or comply with any existing law, code or
standard which has not been fully satisfied prior to the date
hereof or which will not be satisfied prior to the Closing
Date.
The representations and warranties of Seller in this Paragraph 7 shall
be true and correct in all respects, are made by Seller both as of the date
hereof and as of the date of Closing.
8. Purchaser hereby warrants and represents to Seller that:
a. Status of Purchaser. Purchaser is a limited liability company duly
organized and validly existing under the laws of the state of Nevada
and is in existence or good standing (as applicable) under the laws
thereof and is or prior to Closing will be duly qualified to do
business in the States of Oregon, Arizona and California if such
qualification is necessary for Purchaser to lawfully acquire the
Seller's Assets or otherwise carry out its obligations under this
Agreement.
b. Authority. Purchaser has full power and authority to execute and to
deliver this Agreement and all related documents, and to carry out the
transactions contemplated herein. This Agreement is valid, binding and
enforceable as against Purchaser in accordance with its terms, except
as such enforceability may be limited by creditors' rights laws and
applicable principles of equity. The execution of this Agreement and
the consummation of the transaction contemplated herein do not result
in a breach of the terms and conditions of nor constitute a default
under or violation of Purchaser's Certificate of Formation or Operating
Agreement or any law, regulations, court order, mortgage, note, bond,
indenture, agreement, license or other instrument or obligation to
which Purchaser is a party or by which Purchaser or any of the assets
or Purchaser may be bound or affected.
c. Litigation. There is no litigation, investigation or other
proceeding pending or, to the best of Purchaser's knowledge, threatened
against or relating to Purchaser, its properties or business which is
material to this Agreement, or which would prevent Purchaser from
performing its obligations hereunder, nor does Purchaser know or have
reasonable grounds to know of any basis for any such action. For
purposes hereof, litigation, an investigation or a proceeding shall be
deemed to be pending if the same has been served on Purchaser or
Purchaser has been advised either orally or in writing of the pendency
thereof.
d. Necessary Action. Purchaser will proceed with all due diligence to
take all action and obtain all consents prior to Closing necessary for
it to lawfully enter into and carry out the terms of this Agreement.
9. BROKER
Each party hereby represents and warrants to the other party that it
has not contacted or entered into any agreement with any real estate broker,
agent, finder, or any other party in connection
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with this transaction and that it has not taken any action which would result in
any real estate broker's, finder or other fees or commissions being due and
payable to any other party with respect to the transaction contemplated by this
Agreement. Each party hereby indemnifies and agrees to hold the other party
harmless from any loss, liability, damage, cost, or expense (including
reasonable attorney's fees) resulting to the other party by reason of a breach
of the representation and warranty made by the indemnifying party in this
paragraph. Notwithstanding anything to the contrary contained in this Agreement,
the indemnity set forth in this paragraph and any sums due pursuant to such
indemnity shall constitute separate agreements in causes of action in addition
to any liquidated damages provided for in this Agreement.
COVENANTS
10. Seller. Each of Brim, BPI and BSL covenants on its own behalf and not on
behalf of the other entity for the benefit of Purchaser as follows:
a. Pre-Closing. Between the date hereof and the Closing Date, except
as contemplated by this Agreement or with the consent of Purchaser:
i. Other than as set forth in Paragraph 4 it will satisfy and discharge
or cause to be satisfied and discharged all claims, liens, security
interests, tenancies and encumbrances on Seller's Assets owned by it
and on the Pavilion Real Property, the Pavilion Improvements, the
Scottsdale Real Property and the Scottsdale Improvements (other than
the Permitted Encumbrances);
ii. It will file and/or cause the Pavilion Partnership and the
Scottsdale Partnership to file all tax returns, reports and filings of
any kind or nature required to be filed by it or by such Partnership
and will timely pay all taxes or other obligations which are due and
payable by it with respect to the portion of the Seller's Assets owned
by it;
iii. It will not take or permit to be taken any action inconsistent
with its obligations under this Agreement or which could hinder or
delay the consummation of the transactions contemplated by this
Agreement, and, in the case of Seller BSL, it will continue until the
Closing to fulfill any obligations which it may have under the MLK
Lease, the MLK Subleases, the Scottsdale Management Agreement or the
Pavilion Management Agreement and, in the case of Seller BPI, it will
continue until Closing to fulfill any obligations which it may have as
the general partner of the Scottsdale Partnership and the Pavilion
Partnership and will cause each such Partnership to continue until the
Closing to fulfill any obligations which it may have under the Airspace
Lease, the Master Lease, the Pavilion Subleases and the Scottsdale
Leases;
iv. In the case of Seller BSL, it will maintain in force the existing
hazard and liability insurance policies, or comparable coverage, for
the MLK Real Property and the MLK MOB as now in effect; and, in the
case of Seller BPI, it will cause the Pavilion Partnership and the
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Scottsdale Partnership to maintain in force the existing hazard and
liability insurance policies, or comparable coverage, for the Pavilion
Real Property and Improvements and the Scottsdale Real Property and
Improvements (by, if applicable, requiring performance by the Manager
under the Pavilion Management Agreement and the Scottsdale Management
Agreement).
v. It will not enter into, or, if applicable, cause or permit the
Pavilion Partnership or the Scottsdale Partnership to enter into, any
contract or commitment affecting the portion of the Seller's Assets
owned by it except in the ordinary course of business and it will
advise Purchaser of any contracts or commitments which it or either
such Partnership enters, whether in the ordinary course of business or
otherwise;
vi. During normal business hours, (i) Seller BSL will provide Purchaser
and its agents with access (in the company of a representative of
Seller) on 24 hours notice to the MLK Real Property and the MLK MOB and
at such times Seller BSL shall permit Purchaser to inspect the books
and records and the physical and structural condition thereof;
provided, however, that Purchaser's satisfaction therewith shall not be
a condition to Purchaser's obligation to close the transaction provided
for herein and (ii) Seller BPI, in its capacity as general Partner of
the Pavilion Partnership and the Scottsdale Partnership, will provide
Purchaser and its agents with access (in the company of a
representative of Seller) on 24 hours notice to, as applicable, the
Pavilion Real Property and Improvements and the Scottsdale Real
Property and Improvements, and at such times Seller BPI shall permit
Purchaser to inspect the books and records pertaining thereto and the
physical and structural condition thereof;
vii. It will timely pay or perform or cause to be paid or performed all
obligations which are due and payable with respect to or that arise out
of any contract or agreement binding upon the portion of the Seller's
Assets owned by it including, without limitation, all such obligations
or agreements of the Scottsdale Partnership or the Pavilion
Partnership;
viii. It will proceed with all due diligence to secure any consents
which may be necessary for the sale of the Seller's Assets and, in the
case of Seller BSL, for the assumption by Purchaser of the MLK Loan
Documents;
ix. Seller BSL and Seller BPI will provide Purchaser within ten (10)
days after execution of this Agreement with copies of any appraisals,
surveys, inspection and testing documentation or reports, including,
but not limited to, environmental reports, structural report or
geological reports which may be in its possession with respect to the
(i) MLK MOB and the MLK Real Property, (ii) the Pavilion Real Property
and Improvements and (iii) the Scottsdale Real Property and
Improvements.
b. Closing. On the Closing Date, each of Brim, BPI and BSL agrees for
the benefit of Purchaser on its own behalf and not on behalf of the
other entity that it will:
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i. Execute and deliver to Purchaser the Conveyancing Documents which
are due from it with respect to the portion of the Seller's Assets
owned by it and such endorsements, assignments and other instruments of
transfer and conveyance as shall be necessary to transfer and assign
the portion of the Seller's Assets owned by it to Purchaser as herein
provided;
ii. Deliver to Purchaser a certificate dated as of the Closing Date,
certifying in such detail as Purchaser may reasonably specify the
fulfillment of the conditions set forth in Paragraph(s) 13(a) and (b)
subject to the limitations set forth in Paragraph 25 and setting forth
the incumbency of the officers executing documents on behalf of it, a
copy of the resolutions adopted by its Board of Directors and, if
applicable, shareholders, authorizing the transaction provided for
herein and the execution of this Purchase Agreement and the other
documents contemplated herein and attaching a certificate of good
standing or legal existence issued by each of the Oregon and California
Secretary of State in the case of Seller BSL, by each of Oregon and
Arizona in the case of Seller BPI and by each of the Oregon and Arizona
Secretary of State in the case of Seller Brim within no more than
thirty (30) days prior to Closing; and
iii. Pay its share of the Closing costs in accordance with Paragraph 5
c. Post-Closing. After the Closing of this Agreement, each of Seller
Brim, Seller BPI and Seller BSL agrees as follows:
(i) Upon Purchaser's request and at Purchaser's sole cost and expense,
it will take such actions and properly execute and deliver to Purchaser
such further instruments of assignment, conveyance and transfer as, in
the reasonable opinion of its counsel or counsel for Purchaser, may be
reasonably necessary to assure, complete and evidence the full and
effective transfer and conveyance of the portion of the Seller's Assets
owned or controlled by it.
(ii) Brim, BPI and BSL will recognize, on Brim's consolidated federal
income tax return for taxable year 1996, a gain equal to the amount of
the goodwill and going concern value of the Brim, BPI and BSL
transferred to the Purchaser as a result of the transaction provided
for herein (and each of Brim, BPI and BSL shall make the election
required by Section 197(f) of the Code). The amount of such goodwill
and going concern value will be determined in accordance with the
allocation of the purchase price contemplated by Section 2 hereof. Brim
agrees to recognize and pay federal income tax at a 35% rate on the
amount of gain specified in this paragraph, notwithstanding any loss,
deduction, credit or other allowance or offset to which it may
otherwise be entitled under any provision of the Code or the
regulations promulgated thereunder.
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11. Purchaser
a. Pre-Closing. Between the date hereof and the Closing Date, except
as contemplated by this Agreement or with the consent of Seller,
Purchaser agrees that:
i. Purchaser will not take any action inconsistent with its obligations
under this agreement or which could hinder or delay the consummation of
the transaction contemplated by this Agreement;
ii. Purchaser will proceed with all due diligence to obtain all
consents and approvals necessary to permit the consummation of the
transaction contemplated by this Agreement.
b. Closing. On the Closing Date, Purchaser agrees that it will:
i. Pay the Purchase Price due at Closing;
ii. Pay its share of the Closing costs as provided in Paragraph 5;
iii. Deliver to Seller a certificate of a responsible member of its
Management Committee dated as of the Closing Date, certifying in such
detail as Seller may reasonably specify the fulfillment of the
conditions set forth in Paragraph(s) 14(a) and (b) subject to the
limitations set forth in Paragraph 26 and setting forth the incumbency
of the member(s) of the Management Committee executing documents on
behalf of Purchaser, a copy of the resolutions adopted by Purchaser's
Members authorizing the transaction provided for herein and the
execution of this Purchase Agreement and the other documents
contemplated herein and attaching a certificate of existence or good
standing, as applicable, issued by the Nevada and, if applicable,
Arizona, Oregon, California and Texas offices of the Secretary of State
within no more than thirty (30) days prior to Closing;
iv. Execute the Conveyancing Documents;
c. Post-Closing. After the Closing of this Agreement, Purchaser agrees
that it will:
i. Provide Seller with access during normal business hours to any books
or records which Seller may need to file or to defend tax returns or
other filings filed prior or subsequent to the Closing Date which
relate to periods prior to the Closing Date; and
ii. Take such actions and properly execute and deliver such further
instruments as Seller may reasonably request to assure, complete and
evidence the transaction provided for in this Agreement.
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12. Mutual
Following the execution of this Agreement, Purchaser and Seller agree:
a. If any event should occur, either within or without the knowledge or
control of Purchaser or Seller, which would prevent fulfillment of the
conditions to the obligations of any party hereto to consummate the
transaction contemplated by this Agreement, to use its or their
reasonable efforts to cure the same as expeditiously as possible; and
b. To cooperate fully with each other in preparing, filing prosecuting,
and taking any other actions which are or may be reasonable and
necessary to obtain the consent of any governmental instrumentality or
any third party or to accomplish the transaction contemplated by this
Agreement.
CONDITIONS
13. All obligations of Purchaser under this Agreement are subject to
fulfillment, prior to or at Closing, of each of the following conditions, any
one or all or which may be waived in writing by Purchaser:
a. Seller's Representations and Warranties True at Closing. Seller's
representations and warranties contained in this Agreement or in any
certificate delivered in connection with this Agreement or the
transactions contemplated herein shall be true in all material respects
at and as of the date of Closing as though such representations and
warranties were then again made.
b. Seller's Performance. Seller shall have performed all of its
obligations under this Agreement that are to be performed prior to or
at Closing to the extent the same have not been waived by Purchaser in
accordance with the terms hereof.
c. No Defaults. Seller shall not be in default, where said default
cannot be cured by Closing, under any mortgage, contract, lease or
other agreement to which Seller is a party or by which Seller is bound
and which affects or relates to the Seller's Assets.
d. Approvals. Purchaser and/or Seller shall have received all consents
and approvals as may be necessary for Seller to sell and Purchaser to
purchase the Seller's Assets.
e. Financing. Purchaser shall have secured the consent of the lender
to its assumption of the MLK Loan Documents and to the concurrent
release of Seller from any further liability thereunder and all of the
documents necessary to evidence the same shall have been executed and
delivered into escrow by Purchaser and the lender.
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f. Other Brim Transactions. The closing of those transactions described
in Exhibit M shall have occurred (the "Other Brim Transactions").
In the event any of the foregoing conditions is not satisfied by Seller
or Purchaser, as appropriate, or waived by Purchaser prior to Closing, Purchaser
shall have the right to terminate this Agreement in accordance with the
provisions of Paragraph 16.
14. CONDITIONS TO SELLER'S OBLIGATIONS
All obligations of Seller under this Agreement are subject to the
fulfillment, prior to or at Closing, of each of the following conditions, any
one or all of which may be waived by Seller in writing:
a. Purchaser's Representations and Warranties True at Closing.
Purchaser's representations and warranties contained in this Agreement
or in any certificate or document delivered in connection with this
Agreement or the transactions contemplated herein shall be true in all
material respects at and as of the date of Closing as though such
representations and warranties were then again made.
b. Purchaser's Performance. Purchaser shall have performed its
obligations under this Agreement that are to be performed prior to or
at Closing to the extent the same have not been waived by Seller in
accordance with the terms hereof.
c. Approvals. Purchaser and/or Seller shall have received all consents
and approvals as may be necessary for Seller to sell and Purchaser to
purchase the Seller's Assets.
d. Financing. Purchaser shall have secured the consent of the lender
to its assumption of the MLK Loan Documents and to the concurrent
release of Seller from any further liability thereunder and all of the
documents necessary to evidence the same shall have been executed and
delivered into escrow by Purchaser and the lender.
e. Other Brim Transactions. The closing of the Other Brim Transactions
shall have occurred.
In the event any of the foregoing conditions is not satisfied by Seller
or Purchaser, as appropriate, or waived by Seller prior to Closing, Seller shall
have the right to terminate this Agreement in accordance with the provisions of
Paragraph 16.
INDEMNIFICATION
15. Seller and Purchaser acknowledge and agree that Purchaser is more familiar
with the Seller's Assets than the owners of the Seller will be immediately after
the Closing due to the fact that the affect of the Other Brim Transactions will
be to change the ownership and control of Seller Brim and
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Seller BSL immediately after the Closing of the transactions provided for herein
and therein. Accordingly, it is the intent of the parties that Seller shall on
the Closing Date be relieved of all obligations and liabilities with respect to
the Seller's Assets regardless of whether the same relate to the period prior to
or after the Closing Date and that Seller shall have no liability hereunder for
a breach of its representations and warranties or covenants. It is further
understood and agreed that Purchaser's sole remedy in the event of a breach
prior to Closing by Seller of its representations, warranties or covenants
hereunder shall be to terminate this Agreement prior to Closing and that,
failing that, Purchaser shall be deemed to have waived any rights which it may
otherwise have against Seller with respect to a breach thereof. Seller and
Purchaser further acknowledge and agree that consistent with the foregoing
intent of the parties, Purchaser shall indemnify and hold each of Seller Brim,
Seller BSL and Seller BPI, as applicable, harmless from and against:
a. Any and all costs, damages, expenses, liabilities and obligations
relating to the ownership of the Seller's Assets whether the same
relate to the period prior to or after the Closing Date;
b. Any and all damage, loss or liability resulting from any
misrepresentation of a material fact, breach of warranty or
nonfulfillment of any agreement on the part of Purchaser under this
Agreement or from any misrepresentation in any certificate furnished or
to be furnished by Purchaser to Seller hereunder;
c. Any and all damage, loss or liability resulting from the failure to
secure any third party consents required in connection with the
transactions contemplated herein, including, but not limited to the
consent of the landlord under the MLK Lease and the consent of the
owners under the Pavilion and Scottsdale Management Agreements; and
d. Any and all actions, suits, proceedings, demands, assessments,
judgments, reasonable costs and other reasonable expenses, including,
but not limited to, reasonable attorney's fees, incident to any of the
foregoing.
TERMINATION
16. a. This Agreement may be terminated and the transaction contemplated herein
abandoned at any time prior to Closing:
i. By mutual agreement of the parties; provided, however, the parties
shall not agree to such a termination unless the parties to the
transactions which are the subject of the Other Brim Agreements have
agreed to a termination thereof; and provided, further, that the
parties shall be required to agree to such a termination in the event
the parties to the transactions which are the subject of the Other Brim
Agreements have agreed to a termination thereof;
ii. By Seller, if any of the conditions set forth in Paragraph 14
shall have become incapable of fulfillment prior to the Closing Date
or such earlier date as may be specifically
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provided for the performance thereof (as the same may be extended)
through no fault of Seller and the same shall not have been waived by
Seller;
iii. By Purchaser, if any of the conditions set forth in Paragraph 13
shall have become incapable of fulfillment prior to the Closing Date or
such earlier date as may be specifically provided for the performance
thereof (as the same may be extended) through no fault of Purchaser and
the same shall not have been waived by Purchaser;
iv. By either Seller or Purchaser in the event of a material breach by
the other party of its obligations hereunder;
v. If the Closing has not occurred by the Outside Closing Date
specified in the Other Brim Agreements, which, Seller and Purchaser
acknowledge, as of the date of the execution of this Agreement is
December 31, 1996.
c. Neither party to this Agreement may claim termination or pursue any
other remedy referred to in Paragraph 16(a) on account of a breach of a
condition, covenant or warranty by the other, without first giving such
other party written notice of such breach and not less than ten (10)
days within which to cure such breach; provided, however, in no event
shall the Closing Date be postponed beyond the Outside Closing Date.
d. In the event of the termination of this Agreement by Seller under
Paragraphs 16(a)(ii) or (iv) or under Paragraph 16(a)(v) in the event
the Closing has failed to occur as a result of a material breach by
Purchaser of its obligations hereunder, Seller shall be entitled to
pursue such remedies as may be available to it as law or in equity with
respect thereto.
e. In the event of the termination of this Agreement by Purchaser under
Paragraphs 16(a)(iii) or (iv) or under Paragraph 16(a)(v) in the event
the Closing has failed to occur as of a material breach by either or
any combination of the entities comprising Seller of its obligations
hereunder, Purchaser shall have the right as Purchaser's sole and
exclusive remedies either to (i) terminate this Agreement after which
neither party shall have any further rights or obligations hereunder or
(ii) seek specific performance against the breaching entity of its
obligations hereunder.
NOTICES
17. Any notice, request or other communication to be given by any party
hereunder shall be in writing and shall be sent by registered or certified mail,
postage prepaid, by overnight courier guaranteeing overnight delivery or by
facsimile transmission (if confined verbally or in writing by mail as
aforesaid), to the following address:
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To Seller: c/o Brim, Inc.
000 XX 000xx Xxxxxx
Xxxxxxxx, XX 00000
Attn: X. X. Xxxx, President
Phone No.: 000-000-0000
FAX No.: 000-000-0000
To Purchaser: Plaza Enterprises, L.L.C.
000 XX 000xx Xxxxxx
Xxxxxxxx, XX 00000
Attn: K. Xxxxx XxXxxxxxxx
Phone No.: 000-000-0000
FAX No.: 000-000-0000
Notice shall be deemed given three (3) business days after deposit in
the mail, on the next day if sent by overnight courier and on receipt if sent by
facsimile (and confirmed verbally or by mail as aforesaid).
SOLE AGREEMENT
18. This Agreement may not be amended or modified in any respect whatsoever
except by instrument in writing signed by the parties hereto. This Agreement,
together with all other agreements referenced herein and all exhibits and
schedules hereto, constitutes the entire agreement between the parties hereto
and supersedes all prior negotiations, discussions, writings and agreements
between them.
SUCCESSORS
19. The terms of this Agreement shall be binding upon and inure to the benefit
of and be enforceable by and against the heirs and successors of the parties
hereto, it being specifically understood and agreed that Purchaser shall have
the right to assign in whole or in part its rights and obligations hereunder to
an affiliate; provided no such assignment shall relieve Purchaser of its
obligations hereunder and provided, further, that Purchaser shall provide Buyer
with notice of any such assignment and such assignee shall assume all of
Purchaser's obligations hereunder in writing.
CAPTIONS
20. The captions of this Agreement are for convenience of reference only and
shall not define or limit any of the terms or provisions hereof.
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SURVIVAL/LIMITATION OF ACTIONS
21. The covenants, warranties and representations of Seller shall not survive,
and shall terminate at, Closing. The covenants, warranties and representations
and indemnity obligations of Purchaser shall survive the Closing Date.
GOVERNING LAW
22. This Agreement shall be governed by and construed in accordance with the
laws of the State of Oregon.
SEVERABILITY
23. Should any one or more of the provisions of this Agreement be determined to
be invalid, unlawful or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions hereof shall not in any way be
affected or impaired thereby.
COUNTERPARTS
24. This Agreement may be executed in any number of counterparts, each of which
shall be an original; but such counterparts shall together constitute but one
and the same instrument. This Agreement may be executed (i) on an original, (ii)
a copy of an original, or (iii) by a facsimile transmission copy of an original
followed within five (5) calendar days with execution of an original.
THIRD PARTY BENEFICIARY
25. The provisions of this Agreement are not intended to confer any benefits
upon any person or entity not a party to this Agreement other than Encore Senior
Living, LLC which shall be a third party beneficiary of the indemnity provisions
of Paragraph 15 hereof with respect to the MLK Lease, the MLK MOB, the MLK Cash
and the MLK Real Property.
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IN WITNESS WHEREOF, the parties hereby execute this Agreement as of the day
and year first set forth above.
SELLER: BRIM, INC.
By: /s/ X. X. Xxxx
--------------------------------
Its: President
-------------------------------
BRIM SENIOR LIVING, INC.
By:
--------------------------------
Its: Vice President
-------------------------------
BRIM PAVILION, INC.
By:
--------------------------------
Its: President
-------------------------------
PURCHASER: PLAZA ENTERPRISES, L.L.C.
By: /s/ K. Xxxxx XxXxxxxxxx
-------------------------------
Its: Member-Executive Committee
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