FORM OF
OPTION AGREEMENT
THIS OPTION AGREEMENT (this "Agreement"), is made as of this
___ day of January, 1998, by and between XXXXXXXX HEALTH FACILITIES, a New
Hampshire partnership ("Optionor") and ELDERTRUST OPERATING LIMITED PARTNERSHIP,
a Delaware limited partnership (together with its successors and assigns
"Optionee").
BACKGROUND
WHEREAS, Optionor owns and operates an assisted living
facility known as Xxxxxx Point (the "Facility") which Facility consists of the
real property described in Exhibit A hereto (the "Real Property"), the
improvements thereon and certain other real and personal property associated
therewith, all as more particularly described below.
WHEREAS, Optionor wishes to grant unto Optionee, its
successors and assigns, the option to purchase the Facility, including said real
and personal property, and Optionee wishes to accept such option to purchase
upon the terms and subject to the conditions contained herein.
NOW, THEREFORE, Optionor, for and in consideration of the
Option Payment (hereinafter defined) and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound, hereby grants unto Optionee, its successors and
assigns, the option to purchase the Property on the terms hereinafter set forth.
ARTICLE I
OPTION
1.1 Grant of Option.
Optionor hereby irrevocably grants unto Optionee, its
successors and assigns, and Optionee hereby accepts from Optionor, the exclusive
and irrevocable right and option (the "Option") to purchase the Property (as
hereinafter defined) upon the terms and conditions set forth herein (the
"Transaction").
1.2 Consideration for Option.
In consideration for the Option granted herein, Optionee has,
among other things, simultaneous with the execution hereof, paid to Optionor the
sum of One Thousand Dollars ($1,000.00) (the "Option Payment"), receipt of which
is hereby acknowledged by Optionor.
1.3 Term; Exercise of Option.
Optionee, and its successors and assigns, shall have the right
to exercise the Option by delivering written notice thereof (the "Exercise
Notice") to Optionor at any time on or after the first anniversary of the date
on which the Facility reaches Stabilized Occupancy (as defined in Section 1.6).
In no event shall the Option be exercised after the later of (i) the date which
is thirty-six (36) months after the date hereof, or (ii) if the Facility reaches
Stabilized Occupancy between the twenty-fourth (24th) month and thirty-sixth
(36th) month after the date hereof, the first anniversary of the date on which
the Facility reaches Stabilized Occupancy (the "Expiration Date"). Optionor
shall deliver written notice to Optionee within thirty (30) days after
Optionor's determination that the Facility has reached Stabilized Occupancy. In
the event that Optionee makes an earlier determination that the Facility has
reached Stabilized Occupancy from review of the occupancy reports received
pursuant to Section 4.10 hereinbelow, Optionee shall deliver written notice of
the same to Optionor. In the event that any controversy shall arise between the
parties hereto regarding the determination whether the Facility has reached
Stabilized Occupancy, which controversy the parties are unable to settle by
agreement, such controversy shall be determined by arbitration to be initiated
and conducted as provided in Exhibit C hereto. It is hereby acknowledged and
agreed that the Option hereby granted constitutes a present and absolute grant
of option as of the date hereof notwithstanding the fact that it will not be
exercised prior to the date set forth above. The Exercise Notice shall specify
the date (the "Closing Date") on which settlement hereunder shall occur (the
"Closing"); provided, however, that the Closing Date shall be at least ninety
(90) days after the date of the Exercise Notice. The Closing shall be held at
the offices of Xxxxx & Xxxxxxx, L.L.P., 0000 Xxxxxxxxxx Xxxxx, Xxxxx 0000,
XxXxxx, Xxxxxxxx 00000, or at such other location as the parties may mutually
agree upon. Upon Optionee's exercise of the Option as above provided, this
Agreement will automatically become an agreement by Optionor to sell and convey
the Property to Optionee and an agreement by Optionee (or its successor or
assign) to purchase the Property from Optionor, in each case upon the terms and
conditions set forth herein.
1.4 Assets Subject to Option. On the Closing Date, upon the
terms and subject to the conditions set forth herein, Optionor shall transfer to
Optionee, and Optionee shall acquire from Optionor, the following assets:
(i) the Real Property, the buildings situated thereon and all
of the other improvements, easements, covenants and other rights
appurtenant thereto;
(ii) all furniture, furnishings, fixtures, machinery,
equipment, inventory and other tangible personal property, and
replacements thereof, owned by Optionor and now or hereafter affixed to
or located at the Facility or used or useful in connection with the
operation, maintenance or repair of the Facility (the "Personal
Property"); and
(iii) all intangible property now or hereafter owned or held
by Optionor in connection with the Facility, including, without
limitation, (a) all licenses, permits, authorizations, approvals,
certificates of occupancy and all other approvals necessary for the
current use and operation of the Facility, and (b) all right, title and
interest of Optionor in all books and records (including computer
discs, software and similar data), trade names and development rights
related to the Facility, or any part thereof (collectively, the
"Intangible Property") (items (i) through (iii) are hereinafter
referred to collectively as the "Property").
Notwithstanding the foregoing, the term "Property" shall not be deemed
to include, and Optionor shall not convey to Optionee hereunder, the assets of
Optionor listed on Schedule 1.4 hereof (the assets listed on Schedule 1.4 shall
be known as the "Excluded Assets").
1.5 Purchase Price. The purchase price for the Property (the
"Purchase Price") shall be equal to the Fair Market Value of the Property (as
defined in Section 1.6) as of the date of Optionee's Exercise Notice. At
Closing, Optionee shall pay to Optionor the Purchase Price by wire transfer of
immediately available funds.
1.6 Certain Defined Terms. For purposes of this Agreement, the
following defined terms shall have the following meanings:
"Fair Market Value" shall mean the fair market value
of the Property as determined in accordance with the procedures set forth in
Exhibit F hereto.
"Stabilized Occupancy" shall mean an average monthly
occupancy for the Facility of at least ninety percent (90%) for three (3)
consecutive months.
1.7 No Liabilities to be Assumed by Optionee. Optionee shall
not assume any obligations of Optionor, except obligations arising out of
Permitted Liens (as hereinafter defined).
1.8 Lease of Property to Optionor. At Closing, Optionee and
Genesis Health Ventures, Inc. ("Genesis") or an affiliate of Genesis (the
"Genesis Affiliate") shall enter into a lease agreement (the "Lease Agreement"),
substantially in the form of Exhibit B attached hereto and incorporated herein,
which shall provide for the lease of the Property by Optionee to Genesis or the
Genesis Affiliate, as applicable, upon the terms and subject to the conditions
set forth therein.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF OPTIONEE
Optionee hereby represents and warrants to Optionor as
follows:
2.1 Organization, Power and Authority, and Qualification.
Optionee is a limited partnership duly organized, validly existing and in good
standing under the laws of the State of Delaware. Optionee has the requisite
power and authority to carry on its business as it is now being conducted and to
engage in the Transaction. Optionee has made available to Optionor complete and
correct copies of the governing documents of Optionee, with all amendments as in
effect on the date of this Agreement. Optionee is qualified to do business and
is in good standing in each jurisdiction where the character of Optionee's
property owned or leased or the nature of Optionee's activities makes such
qualification necessary, except where the failure to be so qualified and in good
standing would not have a material adverse effect on the business or financial
condition of Optionee.
2.2 Authority Relative to this Agreement. All action of
Optionee necessary to authorize the execution, delivery and performance of this
Agreement by Optionee has been taken, and no other proceedings on the part of
Optionee are necessary to authorize the execution and delivery of this Agreement
by Optionee and the consummation by Optionee of the Transaction.
None of the execution and delivery of this Agreement by
Optionee, the consummation by Optionee of the Transaction or compliance by
Optionee with any of the provisions hereof will (i) conflict with or result in
any breach of any provisions of the partnership agreement of Optionee, (ii)
result in a violation or breach of, or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of termination,
cancellation or acceleration) under any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, lease, license, contract, agreement or
other instrument or obligation to which Optionee is a party or by which it or
any of Optionee's properties or assets may be bound, or (iii) violate any order,
writ, injunction, decree, statute, rule or regulation applicable to Optionee or
any of the properties or assets of Optionee.
2.3 Binding Obligation. This Agreement has been duly and
validly executed and delivered by Optionee to Optionor and constitutes a valid
and binding agreement of Optionee, enforceable against Optionee in accordance
with its terms, except that such enforcement may be subject to bankruptcy,
conservatorship, receivership, insolvency, moratorium or similar laws affecting
creditors' rights generally or the rights of creditors of limited partnerships
and to general principles of equity.
2.4 Brokers. Optionee has not employed any broker or finder,
or incurred any liability therefor, in connection with the transactions
contemplated by this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF OPTIONOR
Optionor hereby represents and warrants to Optionee as
follows:
3.1 Organization and Qualification. Optionor is a
_____________________ duly organized, validly existing and in good standing
under the laws of the State of ______________. Optionor has the requisite power
and authority to carry on its business as it is now being conducted and to
engage in the Transaction. Optionor has made available to Optionee complete and
correct copies of the governing documents of Optionor, with all amendments as in
effect on the date of this Agreement. Optionor is qualified to do business and
is in good standing in each jurisdiction where the character of Optionor's
property owned or leased or the nature of Optionor's activities makes such
qualification necessary, except where the failure to be so qualified and in good
standing would not have a material adverse effect on the business or financial
condition of Optionor or on the Transaction. Optionor is not a "foreign person"
under Section 1445 of the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder.
3.2 Authority Relative to this Agreement. All action necessary
to authorize the execution, delivery and performance of this Agreement by
Optionor has been taken, and no other proceedings are necessary to authorize the
execution and delivery by Optionor of this Agreement and the consummation by
Optionor of the Transaction.
None of the execution and delivery of this Agreement by
Optionor, the consummation by Optionor of the Transaction or compliance by
Optionor with any of the provisions hereof will (i) conflict with or result in
any breach of any provisions of the organizational documents of Optionor, (ii)
result in a violation or breach of, or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of termination,
cancellation or acceleration) under any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, lease, license, permit, contract,
agreement, easement, restriction or other instrument or obligation to which
Optionor is a party or by which Optionor or the Property may be bound, or (iii)
violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Optionor or the Property, except in the case of (ii) or (iii) for
violations, breaches, or defaults (A) which would not in the aggregate have a
material adverse effect on the business or financial condition of Optionor, the
Transaction or the Property or (B) for which waivers or consents have been
obtained or, as listed on Schedule 3.2, will be obtained prior to the Closing
Date.
3.3 Binding Obligation. This Agreement has been duly and
validly executed and delivered by Optionor to Optionee and constitutes a valid
and binding agreement of Optionor, enforceable against Optionor in accordance
with its terms, except that such enforcement may be subject to bankruptcy,
conservatorship, receivership, insolvency, moratorium or similar laws affecting
creditors' rights generally or the rights of creditors of Optionor and to
general principles of equity.
3.4 Brokers. Optionor has not employed any broker or finder,
or incurred any liability therefor, in connection with the transactions
contemplated by this Agreement.
3.5 Title to Property. Optionor has good and valid title to
the Personal Property. To Optionor's knowledge, the Property is not subject to
any imperfections in title, easements, liens, mortgages, encumbrances, pledges,
claims, charges, options, defects, preferential purchase rights or other
encumbrances (collectively referred to herein as "Liens") except for the
following ("Permitted Liens"):
(i) Liens for real property taxes and assessments or for
fire dues, library dues or similar assessments not yet
delinquent;
(ii) Liens that are not material in character, amount, or
extent and do not materially detract from the value,
or interfere with the use of, the Optionor's assets
subject thereto or affected thereby or otherwise
materially impair the business operations being
conducted or proposed to be conducted thereon;
(iii) the Mortgage Debt (as hereinafter defined); and
(iv) Liens shown on Schedule 3.5 hereto.
3.6 Debt. The Property is encumbered by the mortgage
indebtedness described on Schedule 3.6 hereto (the "Mortgage Debt"). To
Optionor's knowledge, there exists no default, or event which with the passage
of time or notice or both would constitute a default, with respect to the
Mortgage Debt or any other debt of Optionor that has not been cured or that
would have a material adverse effect on the business or financial condition of
Optionor, the Transaction or the Property.
3.7 [INTENTIONALLY DELETED]
3.8 [INTENTIONALLY DELETED]
3.9 Leases. Except as set forth on Schedule 3.9 hereto,
Optionor has not entered into any leases, tenancies or other rights of occupancy
in effect on the date hereof with respect to the Property. Each of the leases
referenced in Schedule 3.9 (the "Leases") has been delivered to or made
available to Optionee and is presently unamended (or with respect to each such
lease that has been amended, all amendments thereto have been delivered or made
available to Optionee) and, to Optionor's knowledge, are in full force and
effect without material default.
3.10 Contracts. To the knowledge of Optionor, Schedule 3.10
hereto sets forth all of the contracts or other understandings, written or oral,
to which Optionor is a party or by which Optionor is bound that relate to the
Property (collectively, the "Contracts", which term shall not be construed to
include any Leases). Each of the Contracts is valid and binding on Optionor and
is in full force and effect in all material respects. Except as set forth in
Schedule 3.10, neither Optionor nor, to Optionor's knowledge, any other party
thereto has breached or defaulted under the terms of any Contract, except for
such breaches or defaults that would not have a material adverse effect on the
business or operations of Optionor or the Property.
3.11 Permits. To the knowledge of Optionor, Optionor has all
such franchises, certificates, licenses, permits and other authorizations from
government political subdivisions, regulatory authorities or any other person or
entity (collectively "Permits") as are necessary for the ownership, use,
operation and licensing of the Property as it is currently being used, except
where the failure to possess such Permits would not have a material adverse
effect on the business or financial condition of Optionor or the Property, and,
to Optionor's knowledge, Optionor is not in violation of any Permit and all
Permits relating to the Property are valid and in full force and effect.
3.12. Litigation. Other than as set forth on Schedule 3.12
attached hereto, there are no claims, actions, suits, proceedings or
investigations pending or, to Optionor's knowledge, threatened against Optionor
or any properties or rights of Optionor, that would have a material adverse
effect on the business or financial condition of Optionor, the Transaction or
the Property before any court or administrative, governmental or regulatory
authority or body, domestic or foreign, or any properties or rights of Optionor.
Neither Optionor nor the Property is subject to any order, judgment, injunction
or decree of any court, tribunal or other governmental authority (other than
generally applicable laws, rules and regulations) that would have a material
adverse effect on the business or financial condition of Optionor or the
Property.
3.13 Compliance with Laws. Optionor has not received any
written or other actual notice of any material violation of any applicable
zoning regulation or ordinance, or of any employment, environmental, or other
regulatory law, order, regulation or requirement, including applicable
subdivision laws, relating to the Property or the business or operations
thereon, which remains uncured and, to Optionor's knowledge, there are no such
violations which, individually or in the aggregate, would have a material
adverse effect on the business or financial condition of Optionor or the
Property.
3.14 Taxes. Except for such matters as in the aggregate shall
not result in a material adverse effect on the business or financial condition
of Optionor, (i) all tax or information returns required to be filed on or
before the date hereof by or on behalf of Optionor have been filed through the
date hereof or will be filed on or before the Closing Date in accordance with
all applicable laws, (ii) there is no action, suit or proceeding pending
against, or with respect to, Optionor or the Property in respect of any tax nor
is any claim for additional tax asserted by any such authority, and (iii) all
taxes (including related penalties, interest and additional amounts) imposed
upon Optionor and required to be reported on a return required to be filed
(without regard to any applicable extensions) on or before the date hereof have
been paid or will be paid prior to the delinquency thereof.
3.15 Insurance. Optionor currently has in place the public
liability, casualty and other insurance coverage with respect to the Property as
is set forth in Schedule 3.15 attached hereto. To the knowledge of Optionor,
each of Optionor's insurance policies with respect to the Property is in full
force and effect and all premiums due and payable thereunder have been fully
paid when due. Optionor has not received from any insurance company notice of
any material defects or deficiencies affecting the insurability of the Property
or notices of cancellation or intent to cancel any such insurance
3.16 Utilities. To the knowledge of Optionor, usable public
sanitary and storm sewers, public water, and gas and electrical utilities
(collectively, the "Public Utilities"), of adequate capacity for the operation
of the Property, are installed in, and are duly connected to, the Property and
can be used without any charge except the normal and usual metered charges
imposed for such Public Utilities. No amounts due and owing with respect to the
Property in connection with utilities, insurance, assessments or other charges
customarily prorated in real estate transactions have been outstanding more than
thirty (30) days.
3.17 Environmental. For the purpose of this Section 3.17, the
term "Hazardous Substances" shall mean substances defined as a "hazardous
waste," "hazardous substance," or "toxic substance" under any Environmental
Laws, including, without limitation, oil, petroleum, or any petroleum-derived
substance or waste, asbestos or asbestos-containing materials, PCBs, pesticides,
explosives, radioactive materials, dioxins, urea formaldehyde insulation or any
constituent of any such substance, pollutant or waste. As used herein,
"Environmental Laws" shall include, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act, as amended, 42 U.S.C.
ss. 9601, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. ss.
6901, et seq., the Clean Air Act, 42 U.S.C. ss. 7401, et seq., the Clean Water
Act, 33 U.S.C. ss. 1251, et seq., the Toxic Substance Control Act, 15 U.S.C. ss.
2601, et seq. and the Occupational Safety and Health Act, 29 U.S.C. ss. 651, et
seq., as any of the preceding have been amended prior to the date of the
Closing, and any other federal, state or local law, ordinance, regulation, rule,
order, decision or permit relating to the protection of human health from
environmental effects of Hazardous Substances and which are applicable to the
Property.
To Optionor's knowledge and except as may be specifically
identified in the Phase I Environmental Report prepared for the Property by Xxx
X. Xxxxxx, dated July, 1997, (i) no Hazardous Substances are present in, on or
under the Property that require remediation under Environmental Law or would
have a material adverse affect on the condition (financial or otherwise),
earnings, assets, business affairs or business prospects of the Property,
Optionor or the Transaction, (ii) no liability under or violation of any
Environmental Laws or condition that could give rise to such liability or
violation exists with respect to the Property, except for liabilities that would
not have a material adverse effect on the business or financial condition of
Optionor or the Property, and (iii) Optionor has not caused or allowed any
discharge or disposal of any Hazardous Substances at the Property except in
compliance with Environmental Laws. Optionor has not received any written notice
from any governmental agency or instrumentality having jurisdiction thereof of
any violation of any Environmental Laws which remains uncured or unremediated.
3.18 [INTENTIONALLY DELETED]
3.19 Pending Assessments and Eminent Domain. Optionor has no
knowledge and has received no notice of any pending proceeding for the
imposition of any special assessment, or the formation of a special assessment
district, or for a condemnation proceeding which would materially affect in any
manner any portion of the Property.
3.20 Compliance with Law; Approvals.
Except as set forth on Schedule 3.20:
(a) Optionor has operated the Property in compliance with all
applicable laws and regulations, including, without limitation, all laws,
regulations, orders and requirements promulgated by any governmental authority
or relating to consumer protection, equal opportunity, health, health care
industry regulation, third-party reimbursement (including, if applicable,
Medicare, Medicaid, fraud and abuse and workers compensation), environmental
protection, fire, zoning and building and occupational safety matters, except
for noncompliance that individually or in the aggregate would not, and in the
future will not, have a material adverse effect on the business or operations of
Optionor or the Property;
(b) Optionor has not received notice of any material violation
(or of any investigation, inspection, audit, or other proceeding by any
governmental authority involving allegations of any violation) of any applicable
law, or is in material default with respect to any applicable law and to the
knowledge of Optionor, no investigation, inspection, audit, or other proceeding
by any governmental authority involving allegations of violation of any
applicable law is threatened or contemplated.
3.21 Governmental Proceedings. There is no governmental action
or governmental proceeding (zoning or otherwise) or governmental investigation
pending or, to Optionor's knowledge, threatened against or relating to the
Property or the transactions contemplated by this Agreement.
3.22 No Agreements. Except as set forth in the Optionor's
organizational documents or as set forth on Schedule 3.22, other than the
Leases, the Property is not subject to any outstanding agreement of sale or
lease, option to purchase or other right of any third party to acquire any
interest therein.
ARTICLE IV
COVENANTS AND AGREEMENTS OF OPTIONOR
Optionor hereby covenants and agrees with Optionee that prior
to the date of the Closing:
4.1 Actions Affecting Assets. Except in the ordinary course of
business, Optionor shall not sell, assign, pledge, transfer or encumber the
Property or any portion thereof, or enter into any other material consent,
commitment, understanding or other agreement, or incur any material obligation
or liability (contingent or absolute) with respect to the Property. Optionor
shall not merge or consolidate with or into any other entity or enter into any
agreements relating thereto without Optionee's prior consent.
4.2 Access to Property and Records. Upon reasonable notice and
during regular business hours, Optionor shall give Optionee and Optionee's
authorized representatives full access to the Property and Optionor's personnel
and all properties, documents, contracts, facilities, books, equipment and
records of Optionor relating to the Property to conduct Optionee's
investigations, including, without limitation, surveys, site analyses, soil
tests, engineering studies, and other investigations.
4.3 Permits. Optionor shall maintain all Permits in full force
and effect, and will file timely all reports, statements, renewal applications
and other filings, and will pay timely all fees and charges in connection
therewith that are required to keep the Permits in full force and effect.
4.4 Contracts. Optionor will not enter into any new Contracts
with respect to the Property except in the ordinary course of the business of
the operation of the Facility.
4.5 Insurance. Optionor shall maintain in full force and
effect substantially the same public liability and casualty insurance coverage
now in effect with respect to the Property.
4.6 Taxes and Assessments. Optionor shall pay or discharge
before delinquent all tax liabilities and obligations, including without
limitation those for federal, state or local income, property, unemployment,
withholding, sales, transfer, stamp, documentary, use and other taxes.
4.7 Binding Commitments. Optionor shall not make any
commitments or representations to any applicable government authorities, any
adjoining or surrounding property owners, any civic association, any utility or
any other similar person or entity that would in any manner be binding upon
Optionee or the Property without Optionee's prior consent, except such
agreements that would not have a material adverse effect on the Property.
4.8 Compliance with Law. The operations of Optionor and the
Property will be conducted in compliance with all applicable laws, including,
without limitation, all such laws regulations, orders and requirements
promulgated by any governmental authority or relating to consumer protection,
equal opportunity, health, health care industry regulation, third party
reimbursement (including, if applicable, Medicare, Medicaid, fraud and abuse and
workers compensation), environmental protection, fire, zoning and building and
occupational safety matters, except for noncompliance that individually or in
the aggregate would not and, insofar as may reasonably be foreseen, in the
future will not, have a material adverse effect on the business or operations of
Optionor or the Property.
4.9 Operation of Property. Optionor shall operate and maintain
the Property in the same manner as Optionor has heretofore operated the Property
and consistent with other assisted living facilities operated or managed by
Guarantor of affiliates thereof.
4.10 Occupancy Report; Financial Information. Between the date
of this Agreement and the earlier of (i) the Closing Date and (ii) the
Expiration Date, Optionor agrees to furnish Optionee with the following:
(i) within twenty (20) days following the end of each calendar
month, an occupancy report, in form and substance satisfactory to Optionee, with
respect to the Facility for such period; said occupancy report shall be
accompanied by a calculation of Net Operating Income for the twelve (12) month
period that ended on the last day of said calendar month, together with
supporting documentation.
(ii) within forty-five (45) days following the end of each
calendar quarter, a balance sheet of Optionor as of the close of such calendar
quarter and statements of income and expense, changes in stockholder's equity
and changes in financial position of Optionor for such quarter-fiscal year, as
certified by the chief financial officer of Optionor; and
(iii) within one hundred twenty (120) days following the end
of each calendar year of Optionor, an audited balance sheet of Optionor as of
the close of such calendar year and audited statements of income and expense,
changes in stockholder's equity and changes in financial position of Optionor
for such calendar year, each accompanied by the related report of a nationally
recognized independent accounting firm.
ARTICLE V
CONDITIONS TO CONSUMMATION OF TRANSACTION BY OPTIONEE
The obligation of Optionee to consummate the Transaction shall
be subject to fulfillment (or waiver) at or prior to the date of the Closing of
the following conditions:
5.1 Representations, Warranties and Covenants. The
representations, warranties and covenants made by Optionor in this Agreement or
in any document delivered by Optionor pursuant to this Agreement shall be true
and correct in all material respects when made and on and as of the Closing Date
with the same force and effect as though such representations, warranties and
covenants were made on and as of such date. No later than ten (10) days prior to
the Closing Date, Optionor shall deliver to Optionee a certification that sets
forth any changes to the representations and warranties made by Optionor in this
Agreement or in any schedule hereto or in any document delivered by Optionee
since the Closing Date, but the delivery of such Certification shall not be
deemed to remedy any breach of a representation or warranty or covenant.
5.2 Performance of Covenants and Agreements. Optionor shall
have performed all covenants and agreements contained in this Agreement to be
performed or complied with by it on or before the Closing Date.
5.3 No Material Adverse Change. There shall have been no
material adverse change in the value or condition of the Property since the date
hereof, except for changes contemplated by this Agreement and changes in the
ordinary course of business which do not have a material adverse effect on the
business or financial condition of the Property.
5.4 Title Insurance. Commonwealth Land Title Insurance Company
(the "Title Company") shall have issued to Optionee an ALTA owners title
insurance policy effective as of the date of the Closing or an unconditional
commitment therefor insuring fee simple title to the Property to be vested in
Optionee in the full amount of the Purchase Price, subject to no exceptions
other than Permitted Liens, with such endorsements and otherwise in a form
acceptable to Optionee in its sole and absolute discretion.
5.5 No Order or Injunction. The consummation of the
Transaction shall not have been restrained, enjoined or prohibited by any order
or injunction of any court or governmental authority of competent jurisdiction
nor shall there be any pending or threatened condemnation proceeding with
respect to the Property or any portion thereof.
5.6 Optionor Deliverables. Optionee shall have received the
instruments referred to in Section 7.1.
5.7 Consents. All consents listed on Schedule 3.2 or otherwise
necessary for the consummation of the Transaction by Optionor shall have been
obtained.
ARTICLE VI
CONDITIONS TO CONSUMMATION
OF TRANSACTION BY OPTIONOR
The obligation of Optionor to consummate the Transaction shall
be subject to fulfillment (or waiver) at or prior to the date of the Closing of
the following conditions:
6.1 Representations, Warranties and Covenants. The
representations, warranties and covenants made by Optionee in this Agreement or
in any document delivered by Optionee pursuant to this Agreement shall be true
and correct in all material respects when made and on and as of the date of the
Closing as though such representations, warranties and covenants were made on
and as of such date.
6.2 Consents. All consents necessary for the consummation of
the Transaction by Optionee shall have been obtained.
6.3 Optionee Deliverables. Optionor shall have received the
instruments and other items
referred to in Section 7.2.
ARTICLE VII
THE CLOSING
Subject to the terms and conditions of this Agreement, the
Closing shall take place promptly after satisfaction or waiver of the conditions
set forth in Articles V and VI hereof.
7.1 Closing Deliveries by Optionor. At Closing, Optionor shall
deliver or cause to be delivered the following items, each (if appropriate)
properly executed by Optionor and dated as of the Closing Date:
(a) a special warranty deed conveying good and
marketable fee simple title to the Property (subject only to the
Permitted Liens);
(b) a xxxx of sale pursuant to which Optionor shall
convey to Optionee good title to all the Personal Property, free and
clear of all liens and encumbrances (other than Permitted Liens);
(c) a certification duly executed by Optionor under
penalty of perjury, setting forth Optionor's address and Federal tax
identification number and certifying that Optionor is not a "foreign
person" in accordance with the provisions of Section 1445 (as may be
amended) of the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder;
(d) such assignment agreements as may be deemed
necessary and appropriate by Optionee and Optionor pursuant to which
Optionor shall assign to Optionee other assets (other than the Excluded
Assets) owned by Optionor that comprise the Property, including,
without limitation, the Permits (to the extent assignable), and the
Intangible Property;
(e) a certificate from a duly authorized agent of
Optionor certifying that the representations and warranties of Optionor
set forth herein are true and correct in all material respects as of
the Closing Date;
(f) the Lease Agreement duly executed by Genesis, or
the Genesis Affiliate, as Applicable;
(g) the indemnification agreement and, if applicable,
the guaranty referenced in Section 10.12, duly executed by Genesis; and
(h) such other documents and instruments as Optionee
and Optionor agree are necessary or appropriate.
7.2 Closing Deliveries by Optionee. At Closing, Optionee shall
deliver or cause to be delivered the following items, each (if appropriate)
properly executed by Optionee and dated as of the Closing Date:
(a) the Purchase Price;
(b) a certificate, in form satisfactory to counsel
for Optionee, from a duly authorized officer of Optionee certifying
that the representations and warranties of Optionee set forth herein
are true and correct in all material respects as of the Closing Date;
(c) the assignment agreements referenced in Section
7.1(d) above;
(d) the Lease Agreement, duly executed by Optionee;
and
(e) such other documents and instruments as Optionor
and Optionee agree are necessary or appropriate.
7.3 Closing Costs. Optionee and Optionor shall each pay
one-half (1/2) of the documentary and transfer fees imposed on or in connection
with the Transaction. Optionee agrees to pay all other costs associated with the
Closing, including (i) survey costs, (ii) costs of obtaining a title insurance
policy for the benefit of Optionee, and (iii) all recording fees and charges.
Each party shall pay its own legal fees.
7.4 Adjustments. Optionor and Optionee agree that charges,
credits and adjustments shall be made as of the Closing Date, and a statement
setting forth such adjustments shall be initialed by the parties. The subject
areas of such adjustments shall include:
(a) Real estate, personal property and similar taxes
and assessments (general and special, ordinary and extraordinary) that
have become or may become a lien on the Property;
(b) Charges for public utilities servicing the
Property, payments under the Contracts, charges under easements and
similar agreements affecting the Property;
(c) Insurance premiums, if any, to the extent
policies are assumed by Optionee;
(d) All other charges and fees customarily prorated
and adjusted in similar transactions.
The parties shall prorate on the best available
information; all adjustments that cannot be determined precisely as of the
Closing Date shall be readjusted as soon as practicable. Optionor shall use its
best efforts to have all utility meters read as of the Closing Date. To the
extent practicable, as Optionor and Optionee agree as appropriate, such
prorations may occur outside the Closing by arrangement with the vendor or
supplier of services (e.g., utilities). Any prorations which are the obligation
of Optionee will be assumed by the lessee under the Lease Agreement.
7.5 Possession. At Closing, Optionor shall deliver possession
of the Property to Optionee (subject to the rights of tenants under the Leases),
the Property to be in the same condition and repair as on the date hereof,
reasonable wear and tear excepted.
ARTICLE VIII
REMEDIES ON DEFAULT
8.1 Optionor's Remedies. Except for any breaches waived in
writing by Optionor, if Optionee fails to consummate the Transaction when
required to do so pursuant to the provisions hereof or has breached any of
Optionee's representations or warranties hereunder, then Optionor shall be
entitled to terminate this Agreement as the exclusive and sole right and remedy
of Optionor, whereupon this Agreement shall terminate and neither party hereto
shall have any further obligations to the other party hereto, and, in addition
thereto, Optionee shall reimburse Optionor for all reasonable costs incurred by
Optionor in connection with the Transaction, provided that the amount to be
reimbursed by Optionee shall not exceed Twenty-Five Thousand Dollars
($25,000.00).
8.2 Optionee's Remedies. Except for any breaches waived in
writing by Optionee, if Optionor has breached any of Optionor's covenants or
obligations under this Agreement or has breached any of Optionor's
representations or warranties hereunder or has failed, refused or is unable to
consummate the Transaction by the date of the Closing when and as required to do
so hereunder, then Optionee shall have the right to bring an action at law or in
equity seeking the specific performance of the obligations of Optionor hereunder
and in addition thereto or in lieu thereof, Optionee may avail itself of any
other remedies available at law or in equity on account of such breach,
provided, however, the amount of money damages that Optionee may recover from
Optionor on account of such breach shall not exceed ten percent (10%) of the
amount of the Purchase Price, except in the case of a breach of a representation
or warranty which shall be governed by Section 10.1.
ARTICLE IX
INDEMNIFICATION
9.1 Indemnification by Optionor. Optionor hereby indemnifies
and agrees to defend and hold harmless Optionee, and its officers, directors,
employees, agents and successors and assigns, and its general partners and any
officers, trustees, directors, employees, agents and successors and assigns of
such general partners ("Optionee Indemnitees"), from and against any and all
demands, claims, actions or causes of action, assessments, expenses, costs,
damages, losses and liabilities (including attorneys' fees and other charges)
which may at any time be asserted against or suffered by any Optionee
Indemnitee, the Property, or any part thereof, whether before or after the date
of the Closing, as a result of, on account of or arising from (a) the failure of
Optionor to perform any of Optionor's obligations hereunder or, to the extent
provided in Section 10.1, the breach by Optionor of any of Optionor's
representations and warranties made herein, (b) events, contractual obligations,
acts or omissions of Optionor that occurred in connection with the ownership or
operation of the Property prior to the Closing, (c) damage to property or injury
to or death of any person or any claims for any debts or obligations occurring
on or about or in connection with the Property or any portion thereof or with
respect to the operation of the Property at any time or times prior to the
Closing, or (d) any obligation, claim, suit, liability, contract, agreement,
debt or encumbrance (other than Permitted Liens) created, arising or accruing
prior to the date of the Closing, regardless of when asserted, relating to the
Property or its operation, including, without limitation, any and all
liabilities for federal or state income taxes or other taxes, which shall not
have been set forth or specifically described in this Agreement or the Schedules
and the Exhibits hereto. The obligations of Optionor under this Section 9.1
shall survive the Closing.
9.2 Indemnification by Optionee. Optionee hereby indemnifies
and agrees to defend and hold harmless Optionor, and its officers, directors,
employees, agents and successors and assigns ("Optionor Indemnitees"), from and
against any and all demands, claims, actions or causes of action, assessments,
expenses, costs, damages, losses and liabilities (including attorneys' fees and
other charges) which may at any time be asserted against or suffered by any
Optionor Indemnitee, whether before or after the date of the Closing, as a
result of, on account of or arising from (a) the failure of Optionee to perform
any of Optionee's obligations hereunder or, to the extent provided in Section
10.1, the breach by Optionee of any of Optionee's representations and warranties
made herein, (b) events, contractual obligations, acts or omissions of Optionee
that occurred in connection with the ownership or operation of the Property
subsequent to the Closing, (c) damage to property or injury to or death of any
person or any claims for any debts or obligations occurring on or about or in
connection with the Property or any portion thereof or with respect to the
operation of the Property at any time or times subsequent to the Closing, or (d)
any damage to the Property caused by Optionee in connection with any studies,
investigations or tests conducted by Optionee pursuant to Section 4.2 hereof.
The obligations of Optionor under this Section 9.2 shall survive the Closing.
ARTICLE X
GENERAL PROVISIONS
10.1 Survival of Liability with Respect to Representations and
Warranties. It is the express intention and agreement of the parties that the
representations and warranties of Optionee and Optionor set forth in this
Agreement shall survive the consummation of the Transaction for a period of one
(1) year from the date of the Closing; provided that the representations and
warranties of Optionor set forth in Section 3.17 hereinabove shall survive the
consummation of the Transaction for a period of two (2) years from the date of
the Closing. Such representations and warranties shall expire and be terminated
and extinguished forever at the expiration of such period except where written
notice of a claim for breach shall have been delivered prior to the expiration
of such period. Any written notice given within such period setting forth a
claim must set forth the nature and details of the claim with specificity.
Optionor's liability for a breach of a representation and warranty shall not be
subject to the limitation of liability set forth in Section 8.2 hereof;
provided, however, the maximum amount that Optionee or its assigns may recover
for a breach of a representation or warranty by Optionor hereunder shall not
exceed twenty percent (20%) of the amount of the Purchase Price.
10.2 Notices. All notices, demands, requests or other
communications which may be or are required to be given or made by either
Optionor or Optionee to the other pursuant to this Agreement shall be in writing
and shall be hand delivered or transmitted by certified mail, express overnight
mail or delivery service, telegram, telex or facsimile transmission to the
parties at the following addresses:
If to Optionor: XxXxxxxx Health Facilities
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx Xxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Chairman and Chief Executive Officer
Attention: Law Department - Xxx X. Xxxxxxxxx, Esq.
If to Optionee: ElderTrust Operating Limited Partnership
c/o ElderTrust
000 XxXxxxxx Xxxx, Xxxxx 000
Xxxxxxx Xxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Xx.
President and Chief Executive Officer
or such other address as the addressee may indicate by written notice to the
other party.
Each notice, demand, request or communication which shall be
given or made in the manner described above shall be deemed sufficiently given
or made for all purposes at such time as it is delivered to the addressee (with
the delivery receipt, the affidavit of messenger or (with respect to a telex)
the answerback being deemed conclusive but not exclusive evidence of such
delivery) or at such time as delivery is refused by the addressee upon
presentation.
10.3 Governing Law. This Agreement, the rights and obligations
of the parties hereto and any claims or disputes relating thereto shall be
governed by and construed under the laws of the State of New Hampshire (but not
including the choice of law rules thereof).
10.4 Recording. At the option of Optionee, Optionor and
Optionee shall execute a memorandum of this Agreement in recordable form (the
"Memorandum of Option") and shall cause such Memorandum of Option to be recorded
in the public records of Coos County, New Hampshire. In the event the Option is
not exercised by Optionee by the Expiration Date, Optionee shall, at Optionor's
request, execute a termination of option in recordable form.
10.5 Assignment. No party hereto shall assign this Agreement,
in whole or in part, whether by operation of law or otherwise, without the prior
written consent of Optionor (if the assignor is Optionee) or Optionee (if the
assignor is Optionor), which consent shall not be unreasonably withheld, and any
purported assignment contrary to the terms hereof shall be null, void and of no
force and effect; provided, that Optionee may (i) assign this Agreement and
Optionee's rights hereunder, to a corporation, partnership, limited liability
company or other entity of which the entire ownership interest is owned directly
or indirectly by Optionee or its affiliates without the consent of Optionor, or
(ii) contribute the Property, or any portion thereof, to a partnership, limited
liability company or other entity in exchange for 100% of the ownership
interests in such entity, but no such assignment or contribution shall relieve
Optionee of its obligations hereunder.
10.6 Parties in Interest. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors and assigns as permitted hereunder. No person or entity other than
the parties hereto is or shall be entitled to bring any action to enforce any
provision of this Agreement against any of the parties hereto, and the covenants
and agreements set forth in this Agreement shall be solely for the benefit of,
and shall be enforceable only by, the parties hereto or their respective
successors and assigns as permitted hereunder.
10.7 Severability. If any part of any provision of this
Agreement or any other agreement, document or writing given pursuant to or in
connection with this Agreement shall be invalid or unenforceable under
applicable law, such part shall be ineffective to the extent of such invalidity
or unenforceability only, without in any way affecting the remaining parts of
such provisions or the remaining provisions of said agreement so long as the
economic and legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party.
10.8 Entire Agreement; Amendment. This Agreement and the
Exhibits and Schedules attached hereto (each of which shall be deemed
incorporated herein and made a part hereof) contain the final and entire
agreement between the parties hereto with respect to the Transaction and are
intended to be an integration of all prior negotiations and understandings.
Optionor and Optionee shall not be bound by any terms, conditions, statements,
warranties or representations, oral or written, not contained or referred to
herein or therein. No amendment, change or modification of this Agreement shall
be valid unless the same is in writing and signed by the parties hereto.
10.9 No Waiver. No delay or failure on the part of any party
hereto in exercising any right, power or privilege under this Agreement or under
any other instrument or document given in connection with or pursuant to this
Agreement shall impair any such right, power or privilege or be construed as a
waiver of any default or any acquiescence therein. No single or partial exercise
of any such right, power or privilege shall preclude the further exercise of
such right, power or privilege. No waiver shall be valid against any party
hereto unless made in writing and signed by the party against whom enforcement
of such waiver is sought and then only to the extent expressly specified
therein.
10.10 Headings. Section and subsection headings contained in
this Agreement have been inserted for convenience of reference only, shall not
be deemed to be a part of this Agreement for any purpose, and shall not in any
way define or affect the meaning, construction or scope of any of the provisions
hereof.
10.11 Risk of Loss. The risk of loss or damage to all or any
part of the Property by fire or other casualty prior to the Closing shall be
borne by Optionor. In the event of such damage to all or part of the Property,
Optionee may, at Optionee's election, (i) terminate this Agreement whereupon
neither party shall have any further liability to the other hereunder or (ii)
consummate the Transaction, in which event Optionor shall assign to Optionee at
Closing all of Optionor's right, title and interest in and to all of the
proceeds of insurance payable by virtue of such casualty.
10.12 Counterparts. To facilitate execution, this Agreement
may be executed in as many counterparts as may be required. It shall not be
necessary that the signature of or on behalf of each party appears on each
counterpart, but it shall be sufficient that the signature of or on behalf of
each party appears on one or more of the counterparts. All counterparts shall
collectively constitute a single agreement. It shall not be necessary in any
proof of this Agreement to produce or account for more than a number of
counterparts containing the respective signatures of or on behalf of all of the
parties.
10.13 Guaranty. Genesis shall indemnify Optionee for any loss
or damage due to a breach by Optionor of any of Optionor's representations and
warranties as set forth in this Agreement, pursuant to a certain Indemnification
Agreement to be executed and delivered by Genesis at Closing to and for the
benefit of Optionee, which Indemnification Agreement shall be substantially in
the form of Exhibit D attached hereto and made a part hereof. In addition
thereto, provided that the Genesis Affiliate, and not Genesis, enters into the
Lease Agreement, then at Closing Genesis shall execute and deliver for the
benefit of Optionee a guaranty of the obligations of the Genesis Affiliate under
the Lease Agreement, which guaranty shall be substantially in the form of
Exhibit E attached hereto and made a part hereof.
IN WITNESS WHEREOF, Optionor and Optionee have caused this
Option Agreement to be duly executed on their behalf as of the date first above
written.
OPTIONEE:
ELDERTRUST OPERATING LIMITED PARTNERSHIP
By: ElderTrust Realty Group, Inc.,
general partner
By:
Name:
Title:
OPTIONOR:
By:
Name:
Title:
EXHIBITS AND SCHEDULES
Exhibit A - Legal Description of Real Property
Exhibit B - Form of Lease
Exhibit C - Arbitration Procedures
Exhibit D - Indemnification Agreement
Exhibit E - Guaranty of Lease
Exhibit F - Appraisal Procedure
Schedule 1.4 - Excluded Assets
Schedule 3.2 - Required Consents
Schedule 3.5 - Liens
Schedule 3.9 - Leases
Schedule 3.10 - Contracts
Schedule 3.12 - Litigation
Schedule 3.15 - Insurance
Schedule 3.20 - Non-Compliance
Schedule 3.22 - Agreements
EXHIBIT A
DESCRIPTION OF THE REAL PROPERTY
EXHIBIT B
FORM OF LEASE AGREEMENT
EXHIBIT C
ARBITRATION
Any controversy or dispute or claim relating to the
calculation of Substantial Occupancy hereunder shall be settled exclusively by
arbitration, in Philadelphia, Pennsylvania in accordance with the rules of the
American Arbitration Association then in force (the "Rules"). The party
requesting arbitration shall serve upon the other party to the controversy or
dispute a written demand for arbitration stating the substance of the
controversy or dispute and the contention of the party requesting arbitration
and the name and address of the arbitrator appointed by it. The recipient of
such demand shall within twenty (20) days after such receipt appoint an
arbitrator, and the two arbitrators shall appoint a third. The decision of any
two arbitrators shall be final and binding upon the parties. In the event that
the two arbitrators fail to appoint a third arbitrator within twenty (20) days
of the appointment of the second arbitrator, either arbitrator, or either party
to the arbitration, may apply to a judge of the United States District Court for
the Eastern District of Pennsylvania for the appointment of the third
arbitrator, and the appointment of such arbitrator by such judge on such
application shall have precisely the same force and effect as if such arbitrator
had been appointed by the two arbitrators. If for any reason the third
arbitrator cannot be appointed in the manner prescribed by the preceding
sentence, either regularly appointed arbitrator, or either party to the
arbitration, may apply to the American Arbitration Association for appointment
of the third arbitrator in accordance with the Rules. Should the party upon whom
the demand for arbitration has been served fail or refuse to appoint an
arbitrator within twenty (20) days, the single arbitrator shall have the right
to decide alone, and such arbitrator's decision or award shall be final and
binding upon the parties.
Each arbitrator chosen by a party shall be a fit person, and
the third arbitrator however chosen shall be a fit and impartial person, in each
case having at least ten (10) years experience in litigating, adjudicating or
otherwise administering cases and controversies related to the subject matter of
the controversy, dispute or claim being submitted to arbitration.
The parties hereto agree to abide by all decisions rendered in
an arbitration proceeding in accordance with the foregoing, and all such
decisions may be filed by the prevailing party with any court having
jurisdiction over the person or property of the other party as a basis for
judgment and the issuance of execution thereon. The fees of each arbitrator and
related expenses of arbitration shall be apportioned among the parties as
determined by the arbitrators. The parties to the arbitration shall bear equally
the fees of each arbitrator and related expenses of arbitration.
Unless otherwise agreed by the parties to the arbitration, all
hearings shall be held, and all submissions shall be made by the parties, within
ten (10) days of the date of the selection of the third arbitrator, and the
decisions of the arbitrators shall be made within thirty (30) days of the later
of the date of the closing of the hearings or the date of the final submissions
by the parties.
The parties consent to the jurisdiction of the Supreme Court
of the Commonwealth of Pennsylvania and of the United States District Court for
the Eastern District of Pennsylvania for all purposes in connection with the
arbitration. The parties consent that any process or notice of motion or other
application to either of said courts, and any paper in connection with
arbitration, may be served by certified mail, return receipt requested, or by
personal service, or in such other manner as may be permissible under the rules
of the applicable court or arbitration tribunal, provided a reasonable time for
appearance is allowed.
EXHIBIT D
INDEMNIFICATION AGREEMENT
EXHIBIT E
GUARANTY OF LEASE
EXHIBIT F
APPRAISAL PROCESS
If Optionor and Optionee are unable to agree upon the fair
market value of the Property, each shall within ten (10) days after written
demand by the other select one MAI Appraiser (as defined below) to participate
in the determination of fair market value. Within ten (10) days of such
selection, the MAI Appraisers so selected by Optionor and Optionee shall select
a third MAI Appraiser ("Third MAI Appraiser"). The three (3) selected MAI
Appraisers shall each determine the fair market value of the Property within
thirty (30) days of the selection of the third appraiser. To the extent
consistent with sound appraisal practices as then existing at the time of any
such appraisal. The fees and expenses of any MAI Appraiser retained pursuant to
this Exhibit F shall be borne by the party retaining such MAI Appraiser, with
the exception of the Third MAI Appraiser whose fees and expenses shall be borne
by the Optionor and Optionee equally.
In the event either Optionor or Optionee fails to select an
MAI Appraiser within the time period set forth in the foregoing paragraph, the
MAI Appraiser selected by the other party shall alone determine the fair market
value of the Property in accordance with the provisions of this Exhibit F and
the fair market value so determined shall be binding upon Optionor and Optionee.
In the event the MAI Appraisers selected by Optionor and
Optionee are unable to agree upon a third MAI Appraiser within the time period
set forth in the first paragraph of this Exhibit F, either Optionor or Optionee
shall have the right to apply, at the parties' shared expense, to the presiding
judge of the court of original trial jurisdiction in the jurisdiction in which
the Property is located to name the third MAI Appraiser.
Within five (5) days after completion of the third MAI
Appraiser's appraisal, all three MAI Appraisers shall meet and a majority of the
MAI Appraisers shall attempt to determine the fair market value of the Property.
If a majority are unable to determine the fair market value at such meeting, the
three appraisals shall be added together and their total divided by three. The
resulting quotient shall be the fair market value of the Property. If, however,
either or both of the low appraisal or the high appraisal are more than ten
percent (10%) lower or higher than the middle appraisal, any such lower or
higher appraisal shall be disregarded. If only one appraisal is disregarded, the
remaining two appraisals shall be added together and their total divided by two,
and the resulting quotient shall be such fair market value. If both the lower
appraisal and higher appraisal are disregarded as provided herein, the middle
appraisal shall be such fair market value. In any event, the result of the
foregoing appraisal process shall be final and binding.
For purposes hereof, "MAI Appraiser" shall mean an appraiser
licensed or otherwise qualified to do business in the State where the Property
is located and who has substantial experience in performing appraisals of
facilities similar to the Property and is certified as a member of the American
Institute of Real Estate Appraisers or certified as a SRPA by the Society of
Real Estate Appraisers, or, if such organizations no longer exist or certify
appraisers, such successor organization or such other organization as is
approved by Optionee.
