EXHIBIT 10.30
Purchase and Sale Agreement between
Marriott Senior Living Services, Inc., VCS, Inc. and
MSLS - MapleRidge, Inc., as Sellers,
Marriott International, Inc. and CNL Retirement MA1, LP,
as Purchaser, and HRA Management Corporation, as Tenant,
relating to the Xxxxxxxx Xxxxxxx xx Xxxxxxxxx - Xxxxxxxxx, Xxxxxxxxxx;
Xxxxxxxx Xxxxxxx xx Xxxxxx - Xxxxxx, Xxxxxxxx;
Marriott MapleRidge of Clayton - Clayton, Ohio;
Marriott MapleRidge of Dartmouth - Dartmouth, Massachusetts; and
Marriott MapleRidge of Laguna Creek - Elk Grove, California
Signature Copy
PURCHASE AND SALE AGREEMENT
BY AND AMONG
MARRIOTT SENIOR LIVING SERVICES, INC.,
- and -
VCS, INC.,
- and -
MSLS-MAPLERIDGE, INC.,
respectively, as Sellers,
and
MARRIOTT INTERNATIONAL, INC.,
and
CNL RETIREMENT MA1, LP,
as Purchaser
-and-
HRA MANAGEMENT CORPORATION,
as Tenant
Dated: May 16, 2002
Table of Contents
-----------------
Page
SECTION 1. DEFINITIONS................................................................................1
1.1 "Act of Bankruptcy"............................................................................1
1.2 "Affiliate"....................................................................................2
1.3 "Agreement"....................................................................................2
1.4 "Applicable Closing............................................................................2
1.5 "Applicable Closing Date"......................................................................2
1.6 "Applicable Property Transferee"...............................................................2
1.7 "As-Built Drawings"............................................................................2
1.8 "Assets".......................................................................................3
1.9 "Business Day".................................................................................3
1.10 "Camarillo Property"...........................................................................3
1.11 "Xxxxxxx Property".............................................................................3
1.12 "Contracts"....................................................................................3
1.13 "Controlling Interest".........................................................................3
1.14 "Dartmouth Property"...........................................................................3
1.15 "Effective Date"...............................................................................3
1.16 "Entity".......................................................................................3
1.17 "Environmental Reports"........................................................................3
1.18 "Excluded Assets"..............................................................................3
1.19 "FAS"..........................................................................................4
1.20 "FF&E".........................................................................................4
1.21 "FF&E Schedule"................................................................................4
1.22 "Financing"....................................................................................4
1.23 "Guarantors"...................................................................................4
1.24 "Improvements".................................................................................4
1.25 "Initial Closing"..............................................................................4
1.26 "Initial Closing Date".........................................................................4
1.27 "Intangible Property"..........................................................................4
1.28 "Inventories"..................................................................................5
1.29 "Laguna Creek Property"........................................................................5
1.30 "Lease"........................................................................................5
1.31 "Motor Vehicles"...............................................................................5
1.32 "Operating Agreement"..........................................................................5
1.33 "Operator".....................................................................................5
1.34 "Owner"........................................................................................5
1.35 "Owner Agreement"..............................................................................5
1.36 "Permits"......................................................................................5
1.37 "Permitted Encumbrances".......................................................................6
1.38 "Person".......................................................................................6
1.39 "Pooling Agreement"............................................................................6
1.40 "Property".....................................................................................6
1.41 "Property Transferee"..........................................................................6
1.42 "Proprietary Information" .....................................................................6
1.43 "Purchaser"....................................................................................7
1.44 "Purchase Price"...............................................................................7
1.45 "Real Property"................................................................................7
1.46 "Second Closing"...............................................................................7
1.47 "Sellers"......................................................................................7
1.48 "Tenant".......................................................................................7
1.49 "Threshold Guaranty"...........................................................................7
1.50 "Title Commitments"............................................................................7
1.51 "Title Company"................................................................................7
1.52 "Towson Property"..............................................................................7
SECTION 2. PURCHASE-SALE AND LEASE; DILIGENCE.........................................................7
2.1 Purchase-Sale and Lease........................................................................7
2.2 Diligence Inspections..........................................................................8
2.3 Title Matters..................................................................................8
2.4 Survey.........................................................................................9
2.5 Environmental Reports..........................................................................9
SECTION 3. PURCHASE AND SALE..........................................................................9
3.1 Closing........................................................................................9
3.2 Purchase Price.................................................................................9
SECTION 4. CONDITIONS TO PURCHASER'S OBLIGATION TO CLOSE..............................................9
4.1 Intentionally Deleted..........................................................................9
4.2 Property Transferees..........................................................................10
4.3 Closing Documents.............................................................................10
4.4 Condition of Properties.......................................................................12
4.5 Title Policies and Surveys....................................................................12
4.6 Intentionally Deleted.........................................................................12
4.7 FF&E Schedule.................................................................................12
4.8 Permit Transfers..............................................................................12
4.9 Other.........................................................................................13
SECTION 4A. CONDITIONS TO TENANT'S OBLIGATION TO CLOSE..........................................................13
4A.1 Closing Documents.................................................................................13
4A.2 Condition of Properties...........................................................................15
4A.3 Title Policies and Surveys........................................................................15
4A.4 Intentionally Deleted.............................................................................15
4A.5 FF&E Schedule.....................................................................................15
4A.6 Other.............................................................................................15
SECTION 5. CONDITIONS TO SELLER'S OBLIGATION TO CLOSE................................................16
5.1 Purchase Price................................................................................16
5.2 Closing Documents.............................................................................16
5.3 Intentionally Deleted.........................................................................16
SECTION 6. REPRESENTATIONS AND WARRANTIES OF SELLER..................................................16
6.1 Status and Authority of Owner.................................................................16
6.2 Status and Authority of MI....................................................................16
6.3 Employees.....................................................................................17
6.4 Existing Agreements...........................................................................17
6.5 Tax Returns...................................................................................18
6.6 Action of MI and Owners.......................................................................18
6.7 No Violations of Agreements...................................................................18
6.8 Litigation....................................................................................18
6.9 Not A Foreign Person..........................................................................19
6.10 Construction Contracts: Mechanics' Liens......................................................19
6.11 Permits, Licenses.............................................................................19
6.12 Hazardous Substances..........................................................................19
6.13 Insurance.....................................................................................19
6.14 Financial Information.........................................................................20
6.15 Contracts.....................................................................................20
6.16 Title to FF&E.................................................................................20
6.17 FF&E..........................................................................................20
6.18 No Proffers...................................................................................20
6.19 No Violations.................................................................................20
6.20 Separate Tax Parcel...........................................................................20
6.21 No Defaults...................................................................................20
6.22 American with Disabilities Act................................................................21
SECTION 7. REPRESENTATIONS AND WARRANTIES OF PURCHASER...............................................22
7.1 Status and Authority of Purchaser.............................................................22
7.2 Action of Purchaser...........................................................................22
7.3 No Violations of Agreements...................................................................23
7.4 Litigation.........................................................................................23
SECTION 7A. REPRESENTATIONS AND WARRANTIES OF TENANT...........................................................23
7A.1 Status and Authority of Tenant....................................................................23
7A.2 Actions of Tenant.................................................................................24
7A.3 No Violations of Agreements.......................................................................24
7A.4 Litigation........................................................................................24
SECTION 8. COVENANTS OF MI AND OWNERS................................................................25
8.1 Compliance with Laws..........................................................................25
8.2 Construction..................................................................................25
8.3 Insurance.....................................................................................25
SECTION 9. APPORTIONMENTS............................................................................25
9.1 Apportionments................................................................................25
9.2 Closing Costs.................................................................................26
SECTION 10. LIMITATIONS ON LIABILITY..................................................................27
10.1 Limitations on Liability......................................................................27
SECTION 11. MISCELLANEOUS.............................................................................29
11.1 Agreement to Indemnify........................................................................29
11.2 Brokerage Commissions.........................................................................31
11.3 Publicity.....................................................................................32
11.4 Notices.......................................................................................32
11.5 Waivers, Etc..................................................................................34
11.6 Assignment; Successors and Assigns............................................................34
11.7 Severability..................................................................................34
11.8 Counterparts, Etc.............................................................................35
11.9 Governing Law; Jurisdiction; Waiver of Jury Trial.............................................35
11.10 Performance on Business Days..................................................................35
11.11 Attorneys' Fees...............................................................................35
11.12 Relationship..................................................................................36
11.13 Section and Other Headings....................................................................36
11.14 Disclosure....................................................................................36
11.15 Acknowledgment of Tenant's Financial Condition................................................36
LIST OF SCHEDULES
Schedule A Description of Properties
Schedule B Form of Lease
Schedule C Form of Memorandum of Lease
Schedule D Form of Operating Agreement
Schedule E-1 Description of Camarillo Property
Schedule E-2 Description of Xxxxxxx Property
Schedule E-3 Description of Dartmouth Property
Schedule E-4 Description of Laguna Creek Property
Schedule E-5 Description of Towson Property
Schedule F Form of Owner Agreement
Schedule G Permitted Encumbrances
Schedule H Form of Pooling Agreement
Schedule I Purchase Price
Schedule J Form of Threshold Guaranty
Schedule K Title Commitments
Schedule L Surveys
Schedule M Environmental Reports
Schedule N Form of Master LP Agreement
Schedule O Form of Property Transferee LP Agreement
Schedule P Venture Organizational Chart
Schedule Q Special Warranty Deed
Schedule R Assignment of Contracts
Schedule S Assignment of Intangible Property
Schedule T Assignment of Purchase Contract to Applicable
Property Transferee
Schedule U Intentionally Deleted
Schedule V Warranty Xxxx of Sale - Tenant or Purchaser
Schedule W Form of Substitute Architect's Certificate
Schedule X Form of Substitute Engineer's Certificate
Schedule Y Form of Owner's Affidavit to Title Company
Schedule Z FF& E Schedule
Schedule AA Form of Transition Period Sublease
Schedule BB Description of Motor Vehicles
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is made as of the
16th day of May, 2002 (the "Effective Date"), by and among MARRIOTT SENIOR
LIVING SERVICES, INC., a Delaware corporation ("MSLS"), VCS, INC., a Maryland
corporation ("VCS"), MSLS-MAPLERIDGE, INC., a Delaware corporation ("MSLS-MR")
(with MSLS, VCS and MSLS-MR being together referred to as "Sellers"), CNL
RETIREMENT MA1, LP, a Delaware limited partnership, or assigns ("Purchaser"),
MARRIOTT INTERNATIONAL, INC., a Delaware corporation ("MI"), and HRA MANAGEMENT
CORPORATION, a Delaware corporation ("Tenant").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Sellers (this and other capitalized terms used and not
otherwise defined herein having the meanings ascribed to such terms in Section
1) are the owners of the five (5) assisted living/senior living facilities more
particularly described on Schedule A attached hereto and by this reference made
a part hereof (each a "Property" and together, the "Properties"); and
WHEREAS, Purchaser is a limited partnership (the "Master LP") in which
CNL Retirement Partners, LP or its Affiliates own a 0.01% general partnership
interest and a 76.74% limited partnership interest, respectively, and MSLS owns
a 23.25% limited partnership interest, which Master LP owns a 99.99% interest in
each of five separate limited partnerships (each a "Property Transferee") that
will each purchase one of the Properties and thereby acquire all of the Sellers'
right, title and interest in and to Properties, with each Property Transferee
entering into a lease with the Tenant and with the Tenant entering into five
separate Operating Agreements with MSLS pursuant to which each of the Properties
will be managed and operated by MSLS, all pursuant to the terms and conditions
hereinafter set forth; and
WHEREAS, the Sellers desire to sell to the Property Transferees the
Properties and thereby convey all right, title and interest in the Properties,
upon the terms and conditions hereinafter set forth; and
WHEREAS, Tenant desires to lease the Properties from the Property
Transferees and to contract with MSLS for the management and operation of each
of the Properties.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the mutual receipt and
legal sufficiency of which are hereby acknowledged, Sellers, Tenant, MI, and
Purchaser hereby agree as follows:
SECTION 1 DEFINITIONS.
Capitalized terms used in this Agreement and not defined elsewhere
herein shall have the meanings set forth below, in the Section of this Agreement
referred to below, or in such other document or agreement referred to below:
1.1 "Act of Bankruptcy" shall mean: (i) if a party hereto or any
general partner thereof or Tenant shall (a) apply for or consent to the
appointment of, or the taking of possession by, a receiver, custodian, trustee
or liquidator of itself or all of or a substantial part of its property; (b)
admit in writing its inability to pay its debts as they become due; (c) make a
general assignment for the benefit of its creditors; (d) file a voluntary
petition or commence a voluntary case or proceeding under the Federal Bankruptcy
Code (as now or hereafter in effect); (e) be adjudicated a bankrupt or
insolvent; (f) file a petition seeking to take advantage of any other law
relating to bankruptcy, insolvency, reorganization, winding-up or composition or
adjustment of debts; (g) fail to controvert in a timely and appropriate manner,
or acquiesce in writing to, any petition filed against it in an involuntary case
or proceeding under the Federal Bankruptcy Code (as now or hereafter in effect);
or (h) take any corporate or partnership action for the purpose of effecting any
of the foregoing; or (ii) if the proceeding or case shall be commenced, without
the application or consent of a party hereto or any general partner thereof or
Tenant in any court of competent jurisdiction seeking (1) the liquidation,
reorganization, dissolution or winding-up, or the composition or readjustment of
debts, of such party or general partner or Tenant; (2) the appointment of a
receiver, custodian, trustee or liquidator for such party or general partner or
all or any substantial part of its assets; or (3) other similar relief under any
law relating to bankruptcy, insolvency, reorganization, winding-up or
composition or adjustment of debts, and such proceeding or case shall continue
undismissed; or (iii) an order (including an order for relief entered in an
involuntary case under the Federal Bankruptcy Code, as now or hereinafter in
effect), judgment or decree approving or ordering any of the foregoing shall be
entered and continue unstayed and in effect, for a period of sixty (60)
consecutive days.
1.2 "Affiliate" shall mean any Person owned by, under common control
with or controlled, directly or indirectly, by another Person. For the purposes
of this Agreement, an "Affiliate" shall also mean and include a parent Entity,
or the Person which controls (directly or indirectly) another Person. The plural
of Affiliate is "Affiliates".
1.3 "Agreement" shall mean this Purchase and Sale Agreement, together
with Schedules A through BB hereto, as it and they may be amended from time to
time as herein provided.
1.4 "Applicable Closing shall mean the Initial Closing in the case of
all the Properties other than the Xxxxxxx Property and the Second Closing in the
case of the Xxxxxxx Property.
1.5 "Applicable Closing Date" shall mean May 16, 2002 in the case of
all the Properties other than the Xxxxxxx Property and May 17, 2002 in the case
of the Xxxxxxx Property.
1.6 "Applicable Property Transferee" shall mean, with respect to each
Property, the Property Transferee that acquires title to such Property at the
Applicable Closing. The Applicable Property Transferee for each Property shall
be as follows: (i) the Applicable Property Transferee with respect to the
Camarillo Property shall be CNL Retirement Camarillo CA, LP, a Delaware limited
partnership; (ii) the Applicable Property Transferee with respect to the Xxxxxxx
Property shall be CNL Retirement Clayton OH, LP, a Delaware limited partnership;
(iii) the Applicable Property Transferee with respect to the Dartmouth Property
shall be CNL Retirement Dartmouth MA, LP, a Delaware limited partnership; (iv)
the Applicable Property Transferee with respect to the Laguna Creek Property
shall be CNL Retirement Laguna Creek CA, LP, a Delaware limited partnership; and
(v) the Applicable Property Transferee with respect to the Towson Property shall
be CNL Retirement Towson MD, LP, a Delaware limited partnership.
1.7 "As-Built Drawings" shall mean, with respect to each Property, the
final "as-built" plans and specifications for the Improvements located on such
Property, which are to be furnished by the Sellers to Purchaser pursuant to
Section 4.3 of this Agreement and to the Tenant pursuant to Section 4A.1 of this
Agreement.
1.8 "Assets" shall mean, with respect to each Property, all of the
FF&E, the Motor Vehicles, the Contracts and the Intangible Property,
collectively, owned as of the Applicable Closing Date by Owner in connection
with or relating to such Property, other than any Excluded Assets.
1.9 "Business Day" shall mean any day other than a Saturday, Sunday or
any other day on which banking institutions in the State of Maryland are
authorized by law or executive action to close.
1.10 "Camarillo Property" shall mean the Property located in Camarillo,
Ventura County, California.
1.11 "Clayton Property" shall mean the Property located in Clayton,
Xxxxxxxxxx County, Ohio.
1.12 ""Contracts" shall mean, with respect to each Property, (a)
equipment leases relating to telephone switches and voice mail benefiting the
Property and to which Owner or its Affiliates is a party, (b) motor vehicle
leases relating to motor vehicles used in the operation of the Property and to
which Owner or its Affiliates is a party and (c) any other equipment leases to
which Owner or its Affiliates is a party that benefit the Property, are
disclosed in writing to Purchaser and Tenant on or before the Applicable
Closing, are reasonably acceptable to Purchaser and Tenant and are to survive
the Applicable Closing.
1.13 "Controlling Interest" shall mean: (a) as to a corporation, the
right to exercise, directly or indirectly, more than fifty percent (50%) of the
voting rights attributable to the shares of the Entity (through ownership of
such shares or by contract), and (b) as to an Entity not a corporation, the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of the Entity.
1.14 "Dartmouth Property" shall mean the Property located in Dartmouth,
Bristol County, Massachusetts.
1.15 "Effective Date" shall have the meaning set forth in the preamble
to this Agreement.
1.16 "Entity" shall mean any corporation, general or limited
partnership, limited liability company, partnership, stock company or
association, joint venture, company, trust, bank, trust company, land trust,
business trust, cooperative, any government or agency or political subdivision
thereof or any other entity.
1.17 "Environmental Reports" shall have the meaning given such term in
Section 2.5.
1.18 "Excluded Assets" shall mean, with respect to each Property: (i)
any right, title or interest in any name containing any of the names "Marriott,"
"Brighton Gardens," "Maple Ridge," and other marks used, or that may in the
future be used, by MI, Sellers or their Affiliates (and MSLS and MI shall have
the right to remove any such name or xxxx appearing on any signage or other
property pursuant to the terms of the Operating Agreement); (ii) all property
owned by the Owner or any of its Affiliates, not normally located at its
Property and used, but not exclusively, in connection with the operation of such
Property; (iii) any FAS associated with the Property; (iv) any Inventories
located at the Property; (v) all items, tangible or intangible, consisting of
Proprietary Information; (vi) computer software; (vii) all books, ledger sheets,
files and records; (viii) all contracts pertaining to the operation of the
Property other than the Contracts; and (ix) any software, manuals, brochures or
directives used by the Owner or any of its Affiliates, in the operation of the
Property.
1.19 "FAS" shall have the meaning given the term "Fixed Asset Supplies"
in the Operating Agreement.
1.20 "FF&E" shall mean, with respect to each Property, all appliances,
machinery, devices, fixtures, appurtenances, equipment, furniture, furnishings
and articles of tangible personal property of every kind and nature whatsoever
owned by the Owner or any of its Affiliates, and located in or at, or used in
connection with the ownership, operation or maintenance of, such Property, other
than motor vehicles, but in any event excluding any Excluded Assets.
1.21 "FF&E Schedule" shall have the meaning given such term in Section
4.7.
1.22 "Financing" shall mean the initial first mortgage financing for
the Properties obtained by the Applicable Property Transferees after the Initial
Closing Date. All amounts due and payable under the Financing, together with all
costs associated therewith, shall be a Purchaser expense.
1.23 "Guarantors" shall mean MI and MSLS, jointly and severally liable
as guarantors, under and pursuant to the Threshold Guaranty.
1.24 "Improvements" shall mean, with respect to each Property, all
buildings, fixtures, walls, fences, landscaping and other structures and
improvements situated on, affixed or appurtenant to the Real Property,
including, but not limited to, all pavement, access ways, curb cuts, parking,
kitchen and support facilities, meeting and conference rooms, swimming pool
facilities, recreational amenities, office facilities, drainage system and
facilities, air ventilation and filtering systems and facilities and utility
facilities and connections for sanitary sewer, potable water, irrigation,
electricity, telephone, cable television and natural gas, if applicable, to the
extent the same form a part of such Property and all appurtenances thereto
acquired by the Applicable Property Transferee in connection with Applicable
Property Transferee's acquisition of such Property pursuant to the terms of this
Agreement.
1.25 "Initial Closing" shall have the meaning given such term in
Section 3.1.
1.26 "Initial Closing Date" shall mean May 16, 2002.
1.27 "Intangible Property" shall mean, with respect to each Property,
all transferable or assignable (a) Permits, and (b) certificates, licenses,
warranties, guarantees and Contracts held by Owner and/or its Affiliates, other
than (x) the Excluded Assets and (y) such Permits which are to be held by, or
transferred to, the Tenant and/or Operator in order to permit the Tenant and/or
Operator, respectively, to operate such Property in accordance with the terms of
the Lease and the Operating Agreement.
1.28 "Inventories" shall have the meaning given such term in the
Operating Agreement.
1.29 "Laguna Creek Property" shall mean the Property located in Laguna
Creek, Sacramento County, California.
1.30 "Lease" shall mean, with respect to each Property, the "triple
net" lease agreement to be entered into at the Applicable Closing by the
Applicable Property Transferee and the Tenant, substantially in the form
attached hereto as Schedule B. Each Lease shall be cross-defaulted with each and
every other Lease. A memorandum of each Lease (except for the Lease for the
Towson Property), in the form attached hereto as Schedule C, will be entered
into by the Applicable Property Transferee and Tenant and recorded among the
applicable public records.
1.31 "Motor Vehicles" shall mean those motor vehicles being sold to
Purchaser pursuant to this Agreement and described in Schedule BB attached
hereto.
1.32 "Operating Agreement" shall mean the applicable operating
agreement to be entered into as of the Applicable Closing Date with respect to
each Property, between Tenant and MSLS, substantially in the form attached
hereto at Schedule D.
1.33 "Operator" shall mean Marriott Senior Living Services, Inc., a
Delaware corporation.
1.34 "Owner" shall mean: (i) with respect to the Camarillo Property
described on Schedule E-1 attached hereto, MSLS; (ii) with respect to the
Xxxxxxx Property described on Schedule E-2 attached hereto, MSLS-MR; (iii) with
respect to the Dartmouth Property described on Schedule E-3 attached hereto,
MSLS-MR; (iv) with respect to the Laguna Creek Property described on Schedule
E-4 attached hereto, MSLS-MR; and (v) with respect to the Towson Property
described on Schedule E-5 attached hereto, VCS.
1.35 "Owner Agreement" shall mean, with respect to each Property, the
Owner Agreement in substantially the form of Schedule F attached hereto to be
entered into as of the Applicable Closing Date by Operator, Tenant and the
Applicable Property Transferee, which shall be applicable to such Property from
and after the Applicable Closing Date.
1.36 "Permits" shall mean, with respect to each Property, all
governmental permits and approvals, including licenses and authorizations,
required for the construction, ownership and operation of the assisted
living/senior living facilities within and on the Improvements, including
without limitation healthcare regulatory licenses, skilled nursing facility
licenses, residential care for the elderly licenses, assisted living licenses,
Medicare and/or Medicaid authorizations or licenses, occupational licenses
and/or qualifications to do business, certificates of occupancy, building
permits, signage permits, site use approvals, zoning certificates, environmental
and land use permits, and any and all necessary approvals from state or local
authorities and other approvals granted by any public body or by any private
party pursuant to a recorded instrument relating to such Property and such
assisted living/senior living facilities.
1.37 "Permitted Encumbrances" shall mean, with respect to each
Property: (a) any and all matters affecting title to the Property as shown on
Schedule G hereto; (b) liens for taxes, assessments and governmental charges
with respect to the Property not yet due and payable or due and payable but not
yet delinquent; (c) applicable zoning regulations and ordinances and other
governmental laws, ordinances and regulations provided the same do not prohibit
or impair in any material respects the use of the Property as an assisted
living/senior living facility, as contemplated by this Agreement; (d) such other
nonmonetary encumbrances which do not, in Purchaser's reasonable opinion, impair
marketability, prohibit or impair in any material respect the use of the
Property as a fully functioning assisted living/senior living facility as
contemplated by this Agreement, or impose any additional material costs or
expenses on Tenant or Purchaser; (e) any utility, drainage or other easements
which are customary in connection with (or which reasonably serve) the
Improvements (provided that the same do not lie under any building unless the
easements are not necessary for the Property and can be vacated) and with
respect to which there are no material violations as of the Applicable Closing
Date; (f) the Lease, Memorandum of Lease (except for for the Towson Property)
and Memorandum of Operating Agreement for the Property (except for the Towson
Property); (g) such other nonmonetary encumbrances with respect to the Property
which are not objected to by Purchaser in accordance with Sections 2.3 and 2.4;
and (h) such matters as are disclosed by the Surveys.
1.38 "Person" shall mean any individual or Entity, and the heirs,
executors, administrators, legal representatives, successors and assigns of such
Person where the context so admits.
1.39 "Pooling Agreement" shall mean the Pooling Agreement in the form
attached hereto as Schedule H to be entered into as of the Initial Closing Date
by each Applicable Property Transferee, the Tenant and the Operator.
1.40 "Property" shall mean any of the Real Property, Improvements and
Assets, inclusive, with respect to each of the five (5) assisted living/senior
living facilities identified in Schedule A hereto, as the case may be and/or the
context shall require. For the purposes of this Agreement, the term "Properties"
shall mean and refer to all of the foregoing collectively.
1.41 "Property Transferee" shall mean each entity that acquires title
at the Applicable Closing to one of the five Properties (as the same are more
particularly identified in Section 1.4 above).
1.42 "Proprietary Information" shall mean (a) all computer software and
accompanying documentation (including all future upgrades, enhancements,
additions, substitutions and modifications thereof), other than that which is
commercially available, which are used by MI, any Owner or the Operator or any
Affiliate thereof in connection with the property management system and all
future electronic systems developed by MI, any Owner or the Operator or any
Affiliate thereof for use with respect to any Property, (b) all manuals,
brochures and directives used by MI, any Owner or the Operator or any Affiliate
thereof with respect to the procedures and techniques to be used in operating
any Property, (c) customer lists, and (d) employee records which must remain
confidential either under applicable legal requirements or under reasonable
corporate policies of MI, any Owner or the Operator or any Affiliate thereof.
1.43 "Purchaser" shall mean CNL Retirement MA1, LP, a Delaware limited
partnership, and its permitted successors and assigns.
1.44 "Purchase Price" shall mean the amount to be paid by Purchaser to
Sellers for the Properties, set forth on Schedule I hereto. The Purchase Price
also shall be subject to adjustments, credits and prorations as provided herein.
1.45 "Real Property" shall mean, with respect to each Property, the
real property described in the applicable Schedules E-1 through E-5 hereto,
together with all easements, rights of way, privileges, licenses and
appurtenances which the Owner may now own or hereafter acquire with respect
thereto, less any portion or portions thereof taken by way of an Immaterial
Taking.
1.46 "Second Closing" shall have the meaning given such term in Section
3.1.
1.47 "Sellers" shall mean MSLS, VCS and MSLS-MR, collectively.
1.48 "Tenant" shall mean HRA Management Corporation, a Delaware
corporation, which shall at all relevant times hereunder be a bankruptcy remote,
single purpose entity whose sole business shall be the ownership of Tenant's
interest under the Leases.
1.49 "Threshold Guaranty" shall mean the guaranty to be entered into as
of the Initial Closing Date by Guarantors for the benefit of the Tenant,
substantially in the form attached hereto as Schedule J.
1.50 "Title Commitments" shall have the meaning given such term in
Section 2.3.
1.51 "Title Company" shall mean First American Title Insurance Company
or such other title insurance company as shall have been approved by Purchaser
and the Sellers.
1.52 "Towson Property" shall mean the Property located in Towson,
Baltimore County, Maryland.
SECTION 2 PURCHASE-SALE AND LEASE; DILIGENCE.
2.1 Purchase-Sale and Lease. Purchaser hereby agrees to purchase from
Sellers and Sellers hereby agree to sell to Purchaser, the Properties for the
Purchase Price, subject to and in accordance with the terms and conditions of
this Agreement. Also in consideration of the mutual covenants herein contained,
upon, and subject to, acquisition by Purchaser of the Properties, Purchaser
hereby agrees to simultaneously lease to Tenant, and Tenant hereby agrees to
simultaneously lease from Purchaser, each of such Properties purchased by
Purchaser, on the terms and conditions of the Lease applicable thereto, and in
accordance with the terms of this Agreement. Also in consideration of the mutual
covenants herein contained, Sellers hereby agree to convey to either Purchaser
or Tenant, at the Purchaser's election, the existing FAS associated with the
Properties and the existing Inventories located at the Properties, on the terms
and conditions set forth herein, together with the working capital associated
with or set aside associated with the Properties at the Applicable Closing.
2.2 Diligence Inspections.
(a) Except as otherwise expressly provided to the contrary in this
Agreement, Purchaser and Tenant have approved (or are deemed to have approved
for purposes of this Agreement) the Properties in its "AS IS, WHERE IS"
condition as of the Effective Date.
(b) Purchaser and Tenant have approved (or shall be deemed to have
approved for purposes of this Agreement) each Property in its "as is, where is"
condition as of the Effective Date and as of the Applicable Closing Date,
subject to the representations, warranties, terms and conditions of this
Agreement. Prior to the Applicable Closing, and on the terms and conditions set
forth below, Purchaser and Tenant shall have the right to inspect the Properties
and investigate the conditions of the Properties, including without limitation,
the environmental, geotechnical, physical, market and economic conditions
thereof. To the extent that, in connection with such investigations, the
Purchaser, the Tenant, or their agents, representatives or contractors, damages
or disturbs any of the Properties, the Purchaser or Tenant, as the case may be,
shall return the same to substantially the same condition which existed
immediately prior to such damage or disturbance. The Purchaser and Tenant each
shall indemnify, defend and hold harmless the Sellers from and against any and
all expense, loss or damage (including, without limitation, reasonable
attorneys' fees) which the Sellers may incur as a result of any act or omission
of the Purchaser or Tenant, respectively, as the case may be, or its
representatives, agents or contractors in connection with any such inspections
and investigations, other than any expense, loss or damage arising from any act
or omission of the Sellers. The foregoing indemnification agreement shall, with
respect to each Property, survive the termination of this Agreement or the
Applicable Closing hereunder for a period of one (1) year.
2.3 Title Matters.
(a) Purchaser and the Tenant have approved (or shall be deemed to
have approved for purposes of this Agreement) the state of title to each
Property and all exceptions thereto reflected in the written commitments for an
ALTA owner's policy of title insurance and ALTA leasehold policy of title
insurance with respect to each Property attached hereto as Schedule K
(collectively, the "Title Commitments"). Each Owner shall cause all mortgages,
deeds of trust and other monetary liens encumbering its Property to be released
at or prior to the Applicable Closing; provided, however, such liens may
continue to encumber the Property at the Applicable Closing if the Title Company
is willing to insure over such liens in a manner acceptable to Purchaser and
Tenant and such liens are released promptly following the Applicable Closing.
Owner's obligation to cause the release of any such liens pursuant to the
immediately preceding sentence shall survive the Applicable Closing.
(b) In the event that an Owner decides to encumber its Property
with an additional title matter, such Owner shall give Purchaser and Tenant
notice thereof together with a copy of the document, instrument or other matter
to be imposed against or on the Property ("Additional Exception"). Within five
(5) Business Days after receipt of a notice (and a copy) of any Additional
Exception with respect to any Property, the Purchaser and/or Tenant shall give
the Owner notice of its approval or disapproval thereof. Neither Purchaser nor
Tenant shall withhold its approval of any such Additional Exception which would
be a Permitted Encumbrance specified in clauses (a) through (h), inclusive, of
Section 1.36, and neither shall unreasonably withhold, delay or condition its
approval of any other Additional Exception. If Purchaser and/or Tenant fails to
respond within said five (5) Business Day period, Purchaser and/or Tenant, as
the case may be, shall be deemed to have approved such Additional Exception. If
Purchaser and/or Tenant unreasonably disapproves of any Additional Exception,
Owner shall be excused from performing any term or condition (or any portion or
aspect of a term or condition) of this Agreement which Owner is unable or
unwilling to perform as a result of its inability to enter into and/or impose
such Additional Exception. Notwithstanding anything herein to the contrary, an
Additional Exception shall not include any monetary encumbrance, and except as
set forth in the next succeeding paragraph, Owner shall discharge all such
encumbrances on or before the Applicable Closing Date. No consent or approval to
any Additional Exception by Purchaser or Tenant shall constitute an agreement by
Purchaser or Tenant to pay any special assessment or other tax or levy arising
under such Additional Exception that would otherwise be payable by the Sellers
under this Agreement.
2.4 Survey. Purchaser and Tenant have approved the surveys
(collectively, the "Surveys") for the Properties and all matters shown thereon,
which surveys are identified on Schedule L attached hereto.
2.5 Environmental Reports. Purchaser has approved and accepts the
environmental condition of each Property as existing as of the Effective Date
and as reflected in the environmental report or reports in respect of each
Property identified in Schedule M hereto.
SECTION 3 PURCHASE AND SALE.
3.1 Closing. The purchase, sale and lease of the Properties and other
transactions contemplated hereby shall be consummated at two closings, one to be
held on May 16, 2002 (the "Initial Closing") with respect to all of the
Properties other than the Xxxxxxx Property and the other to be held on May 17,
2002 with respect to the Xxxxxxx Property (the "Second Closing"). The Initial
Closing and the Second Closing shall each be held in escrow with the Title
Company at the offices of Arent Fox Xxxxxxx Xxxxxxx & Xxxx, PLLC, 0000
Xxxxxxxxxxx Xxxxxx, XX, Xxxxxxxxxx, XX 00000, or at such other location as the
Sellers and the Purchaser and the Tenant may agree.
3.2 Purchase Price. At the Applicable Closing, the Purchase Price shall
be payable by Purchaser by wire transfer of immediately available funds on the
Applicable Closing Date to an account or accounts to be designated by Sellers
prior to the Applicable Closing, subject to any adjustments and apportionments
made pursuant to this Agreement.
SECTION 4 CONDITIONS TO PURCHASER'S OBLIGATION TO CLOSE.
The obligation of Purchaser to acquire the Properties on the Applicable
Closing Date shall be subject to the satisfaction or waiver of the following
conditions precedent on and as of the Applicable Closing Date:
4.1 Intentionally Deleted.
4.2 Property Transferees. For the purposes of effectuating the
transactions contemplated by this Agreement, on or before the Initial Closing
Date, Purchaser or its Affiliates and MSLS shall form the Master LP and each of
the Property Transferees. The form of the partnership agreement for the Master
LP will be substantially in the form set forth in Schedule N attached hereto.
With respect to the actual acquisition and fee simple ownership of each
Property, each Property will be acquired and owned at the Applicable Closing by
the Applicable Property Transferee owned (a) by another Purchaser Affiliate as a
0.01% general partner, and (b) by the Master LP as a 99.99% limited partner.
Each Property Transferee will be the landlord under the applicable Lease. The
form of the limited partnership agreement for each Property Transferee will be
substantially in the form set forth in Schedule O attached hereto. The
organizational chart for the limited partnerships described in this Section 4.2
is attached hereto as Schedule P. On and as of the Initial Closing Date, the
limited partnerships described in this Section 4.2 shall have been created and
be in full force and effect. The Sellers hereby acknowledge and agree that the
Purchaser shall have the right to assign this Agreement with respect to each
Property to the Applicable Property Transferee as may be necessary in order to
effectuate the intent of this Section 4.2.
4.3 Closing Documents. Sellers, MI, the Operator, or their respective
Affiliates and/or the Tenant, as applicable, shall have delivered (or cause to
be delivered) to Purchaser, with respect to each Property:
(a) A Special Warranty Deed, duly executed by the Owner, conveying
to the Applicable Property Transferee good and marketable title to such
Property, free from all liens, encumbrances, security interests, options and
adverse claims of any kind or character, subject to the Permitted Encumbrances,
in the form set forth in Schedule Q attached hereto;
(b) An Assignment of Contracts (including any construction related
contracts) in the form set forth in Schedule R hereto, an Assignment of
Intangible Property in the form set forth in Schedule S hereto, each duly
executed by the Owner (or its Affiliate, as applicable), transferring and
assigning to the Applicable Property Transferee all rights, title and interest
of Owner (or its Affiliate, as applicable) in the Assets (other than any
existing FAS, any existing FF&E or any existing Inventories) related to such
Property, together with, to the extent the same are in Owner's or its
Affiliate's (or their agent's) possession, original (or copies certified by
Owner as true and correct), fully executed copies of all agreements constituting
any of the same;
(c) A Warranty Xxxx of Sale in the form set forth in Schedule V
hereto, duly executed by Owner, transferring to the Applicable Property
Transferee all rights, title and interest of Owner in any existing FAS
associated with such Property, any FF&E associated with such Property and any
existing Inventories located at such Property;
(d) A copy of the Threshold Guaranty duly executed by Guarantors
and Tenant;
(e) A copy of the Operating Agreement for such Property duly
executed by the Operator and the Tenant and a Memorandum of Operating Agreement
for such Property (except for the Operating Agreement for the Towson Property)
in recordable form duly executed by the Operator and the Tenant;
(f) The Lease for such Property duly executed by the Tenant and
the Applicable Property Transferee and a Memorandum of Lease for such Property
(except for the Lease for the Towson Property) in recordable form;
(g) The Owner Agreement for such Property duly executed by the
Operator, the Applicable Property Transferee and the Tenant;
(h) An original (or if not available, a copy) of the final
certificate of occupancy for such Property;
(i) A Substitute Architect's Certificate in respect of the
Improvements to such Property in the form attached hereto as Schedule W;
(j) A Substitute Engineer's Certificate in respect of the
Improvements to such Property in the form attached hereto as Schedule X;
(k) Certified copies of applicable resolutions and certificates of
incumbency with respect to Owner, MI, MSLS, the Tenant and such other Persons as
Purchaser may reasonably require;
(l) A certificate of a duly authorized officer of each of MI,
MSLS, Owner and Tenant confirming the continued truth and accuracy of its
representations and warranties in this Agreement (subject to such changes as
Owner has given notice of to Purchaser pursuant to Section 6 and subject to
Section 4.4(b));
(m) The "As-Built" Drawings;
(n) Copies of the Permits (certified by Owner as true and
correct);
(o) Copies of the Contracts (certified by Owner as true and
correct);
(p) The original (or if not available, copies) of any and all
warranties and guarantees pertaining to the Improvements, specifically including
the manufacturer's roof membrane warranty issued with respect to the buildings
comprising the Improvements;
(q) The FF&E Schedule;
(r) An owner's affidavit executed by Owner in the form of Schedule
Y for the purpose of satisfying any request for the same in the applicable Title
Commitments;
(s) A settlement statement;
(t) The Pooling Agreement executed by MSLS, the Applicable
Property Transferee and the Tenant;
(u) The Transition Period Sublease for such Property executed by
Tenant and MSLS, if applicable pursuant to Section 4.8 below;
(v) Assignments of Purchase Contract by Purchaser to each of the
Applicable Property Transferees as it relates to the applicable Property in the
form of Schedule T; and
(w) Such other documents, certificates and other instruments as
may be reasonably required to consummate the transaction contemplated hereby.
4.4 Condition of Properties.
(a) No action shall be pending or threatened for the condemnation
or taking by power of eminent domain of all or any material portion of any
Property.
(b) All material and applicable Permits and other authorizations
necessary for the current use, occupancy and operation of the Properties shall
be in full force and effect; however, in the event that any Owner fails to
obtain any such Permits or other authorizations and discloses same to Purchaser,
Purchaser may, but shall not be required to, waive such Owner's compliance with
Section 6.10 of this Agreement and proceed with the Applicable Closing.
4.5 Title Policies and Surveys.
(a) The Title Company shall be prepared, subject only to payment
of the applicable premium and delivery of all conveyance documents, to issue the
title policies pursuant to the Title Commitments.
(b) Purchaser shall have received the Surveys in accordance with
Section 2.4.
4.6 Intentionally Deleted.
4.7 FF&E Schedule. Attached hereto as Schedule Z is a schedule (the
"FF&E Schedule") of all FF&E at each Property owned by each Owner and which FF&E
is intended to be part of the Assets to be transferred to and owned by the
Applicable Property Transferees upon and following the Applicable Closing. Upon
reasonable prior notice to each Owner, Purchaser shall be entitled to inspect
the FF&E at the applicable Property prior to the Applicable Closing in order to
confirm and verify the FF&E Schedule.
4.8 Permit Transfers. Sellers shall have completed the transfer and
assignment of all of the Permits to the Applicable Property Transferee and/or
the Tenant and/or Operator of each Property, to the extent the same may be or
are required to be effectuated at or prior to the Applicable Closing under
applicable and governing laws, rules and regulations. To the extent any of the
Permits cannot be transferred or assigned at or prior to the Applicable Closing,
alternative arrangements that are satisfactory to Purchaser and the Tenant shall
have been implemented to assure that the Applicable Property Transferee and/or
the Tenant shall have the benefit of such Permits, and Sellers, the Applicable
Property Transferee and/or the Tenant shall cooperate and use their respective
commercially reasonable efforts to complete the transfer and assignment of the
Permits as contemplated in the foregoing sentence promptly after the Applicable
Closing. For example, but not by way of limitation, in the event the required
assisted living/senior living facilities and/or skilled nursing facilities
licenses or permits have not been transferred, issued or re-issued as of the
Applicable Closing Date with respect to a Property, as required by applicable
law and regulations, the Operator, the Tenant and the Applicable Property
Transferee shall enter into a sublease of the Lease, in the form attached hereto
as Schedule AA (the "Transition Period Sublease"), so that the facility located
on such Property may continue to be operated on and after the Applicable Closing
Date pending the transfer, issuance or re-issuance of such required licenses or
permits. This Section 4.8 shall survive the Applicable Closing for a period of
one year.
4.9 Other.
(a) The representations and warranties of Sellers, MI and Tenant
set forth in Section 6 and Section 6A hereof (as the same may have been changed
by notice from Sellers as provided therein) shall be true, correct and complete
in all material respects on and as of the Applicable Closing Date;
(b) No Act of Bankruptcy on the part of any Owner, MI, MSLS or
Tenant shall have occurred and remain outstanding as of the Applicable Closing
Date;
(c) Each Owner shall be the sole owner of good and marketable
title to its Property free and clear of all liens, encumbrances, restrictions,
conditions and agreements (other than the Permitted Encumbrances and this
Agreement);
(d) There shall be no unsatisfied state or Federal tax liens
against or affecting any Owner which is due and payable, or any tax audit of
such Owner in process, which could result in a lien against any Property; and
(e) There shall be no outstanding, unsettled claim against any
Owner arising under any insurance policies in respect of such Owner or its
Property which could result in a lien against the Property.
SECTION 4A. CONDITIONS TO TENANT'S OBLIGATION TO CLOSE.
The obligation of the Tenant to lease each of the Properties on the Applicable
Closing Date shall be subject to the satisfaction or waiver of the following
conditions precedent on and as of such Applicable Closing Date:
4A.1 Closing Documents. The Sellers, MI, the Operator or Purchaser,
as applicable, shall have delivered (or cause to be delivered) to the Tenant
with respect to each Property:
(a) The Lease for such Property duly executed by the Applicable
Property Transferee and a Memorandum of Lease for such Property (except for the
Lease for the Towson Property) in recordable form duly executed by the
Applicable Property Transferee;
(b) The Threshold Guaranty duly executed by Guarantors;
(c) The Operating Agreement for such Property duly executed by
MSLS and a Memorandum of Operating Agreement for such Property (except for the
Operating Agreement for the Towson Property) in recordable form duly executed by
MSLS;
(d) The Pooling Agreement duly executed by the Applicable Property
Transferee and Operator;
(e) A copy of the final certificate of occupancy for such
Property;
(f) A Substitute Architect's Certificate in respect of the
Improvements to such Property in the form attached hereto as Schedule W;
(g) A Substitute Engineer's Certificate in respect of the
Improvements to such Property in the form attached hereto as Schedule X;
(h) Certified copies of applicable resolutions and certificates of
incumbency with respect to the Sellers, MI, Purchaser and other Persons as the
Tenant may reasonably require;
(i) A certificate of a duly authorized officer of each of MI,
Sellers, and Purchaser confirming the continued truth and accuracy of its
representations and warranties in this Agreement (subject to such changes as
Sellers have given notice of to Tenant pursuant to Section 6 and subject to
Section 4A.2(b));
(j) The Surveys;
(k) The "As-Built" Drawings;
(l) The Permits (or copies thereof certified by Sellers as true
and correct);
(m) The Contracts (or copies thereof certified by Sellers as true
and correct);
(n) Copies of any and all warranties and guarantees pertaining to
the Improvements, specifically including the manufacturer's roof membrane
warranty issued with respect to the buildings comprising the Improvements;
(o) The FF&E Schedule;
(p) An owner's affidavit executed by Sellers in the form of
Schedule Y for purposes of satisfying any request for the same in the applicable
Title Commitment;
(q) A settlement statement;
(r) The Transition Period Sublease for such Property executed by
MSLS, if applicable pursuant to Section 4.8 below;
(s) Assignments of Purchase Contract to each of the Applicable
Property Transferees as it relates to the applicable Property in the form of
Schedule T;
(t) The Owner Agreement for such Property duly executed by the
Operator, the Applicable Property Transferee and the Tenant;
(u) A Warranty Xxxx of Sale in the form set forth in Schedule V
hereto, duly executed by Owner, transferring to the Applicable Property
Transferee all rights, title and interest of Owner in any existing FAS
associated with such Property, any FF&E associated with such Property and any
existing Inventories located at such Property;
(v) Such other documents, certificates and other instruments as
may be reasonably required to consummate the transaction contemplated hereby.
4A.2 Condition of Properties.
(a) No action shall be pending or threatened for the condemnation
of taking by power of eminent domain of all or any material portion of any
Property.
(b) All material and applicable Permits and other authorization
necessary for the current use, occupancy and operation of the Properties shall
be in full force and effect; however, in the event that any Owner fails to
obtain any such Permits or other authorizations and discloses same to Tenant,
Tenant may, but shall not be required to, waive Owner's compliance with Section
6.10 of this Agreement and proceed with the Applicable Closing.
4A.3 Title Policies and Surveys.
(a) The Title Company shall be prepared, subject only to payment
of the applicable premium and delivery of all conveyance documents, to issue the
title policies pursuant to the Title Commitments.
(b) The Tenant shall have received the Surveys in accordance with
Section 2.4.
4A.4 Intentionally Deleted.
4A.5 FF&E Schedule. Upon reasonable prior notice to Sellers, Tenant
shall be entitled to inspect the FF&E at the Property prior to the Applicable
Closing in order to confirm and verify the FF&E Schedule.
4A.6 Other.
(a) The representations and warranties of the Sellers, MI and
Purchaser set forth in Section 6 and Section 7 hereof respectively (as the same
may have been changed by notice from Sellers provided therein) shall be true,
correct and complete in all material respects on and as of the Applicable
Closing Date;
(b) No Act of Bankruptcy on the part of the Sellers, MI or
Purchaser shall have occurred and remain outstanding as of the Applicable
Closing Date;
(c) Each Owner shall be the sole owner of good and marketable
title to its Property free and clear of all liens, encumbrances, restrictions,
conditions and agreements (other than the Permitted Exceptions and this
Agreement);
(d) There shall be no unsatisfied state or Federal tax liens
against or affecting any Owner which is due and payable, or any tax audit of
such Owner in process, which could result in a lien against any Property; and
(e) There shall be no outstanding, unsettled claim against any
Owner arising under any insurance policies in respect of such Owner of its
Property, which could result in a lien against the Property.
SECTION 5 CONDITIONS TO SELLER'S OBLIGATION TO CLOSE.
The obligation of Sellers to convey and transfer to Purchaser the
Properties on the Applicable Closing Date is subject to the satisfaction or
waiver of the following conditions precedent on and as of the Applicable Closing
Date:
5.1 Purchase Price. Purchaser shall deliver to Sellers the Purchase
Price as provided in Section 3.2.
5.2 Closing Documents. Purchaser, the Applicable Property Transferee or
Tenant, as the case may be, shall have delivered to Sellers:
(a) Duly executed and acknowledged counterparts of the documents
described in Subsections 4.3(b), (c), (d), (e), (f), (g), (k), (l), (s), (t),
(u), (v) and (w);
(b) A certificate of a duly authorized officer of the Purchaser
and Tenant confirming the continued truth and accuracy of the representations
and warranties of the Purchaser and Tenant in this Agreement;
(c) Certified copies of applicable resolutions, certificates of
good standing, and certificates of incumbency with respect to the Purchaser, the
Applicable Property Transferees, Tenant, and such other Persons as the Sellers
may reasonably require; and
(d) Such other documents, certificates and other instruments as
may be reasonably required to consummate the transaction contemplated hereby.
5.3 Intentionally Deleted.
SECTION 6 REPRESENTATIONS AND WARRANTIES OF SELLER.
To induce Purchaser and Tenant to enter into this Agreement, each Owner
and MI represents and warrants to Purchaser and Tenant as follows:
6.1 Status and Authority of Owner. Each Owner is, or will be at or
before the Initial Closing, a corporation duly organized, validly existing and
in corporate good standing under the laws of its state of incorporation, and has
all requisite power and authority under the laws of such state and its
respective charter documents to enter into and perform its obligations under
this Agreement and to consummate the transactions contemplated hereby. Each
Owner is duly qualified to transact business and is in good standing in the
state in which its Property is located.
6.2 Status and Authority of MI. MI is a corporation duly organized,
validly existing and in corporate good standing under the laws of its state of
incorporation, and has all requisite power and authority under the laws of such
state and its respective charter documents to enter into and perform its
obligations under this Agreement and to consummate the transactions contemplated
hereby. MI has duly qualified to transact business and is in good standing in
the state in which each Property is located.
6.3 Employees. Each Owner shall be responsible for payment of all wages
and salaries payable to, and all vacation pay, pension and welfare benefits and
other fringe benefits accrued with respect to all individuals employed by such
Owner at its Property relating to the period prior to the Applicable Closing,
and Operator, pursuant to the terms of the Operating Agreement, shall be
responsible for payment of all wages, salaries and vacation pay, pension,
welfare and other benefits relating to the period commencing on and from and
after the Applicable Closing. All of the employees at each Property prior to the
Applicable Closing Date are employees of the Operator and Operator shall
continue to employ such employees immediately after the Applicable Closing Date
except for those employees which may be terminated in the ordinary course of
business unrelated to the sale of the Property. At no time hereunder, upon the
Applicable Closing or under the applicable Lease, shall any of the employees at
the Property, including employees of Operator, be or be deemed to be the
employees of Purchaser or Tenant, and upon and after the Applicable Closing, be
or be deemed to be transferred to Purchaser or Tenant. If required, each Owner
or the Operator, as applicable, will comply with the notice and other
requirements under the Worker Adjustment Retraining and Notification Act ("WARN
Act"), the Consolidated Omnibus Budget Reconciliation Act ("COBRA") or any
similar state or local legislation with respect to such employee matters, and
such obligation shall survive the Applicable Closing, notwithstanding anything
to the contrary in the WARN Act. Because Purchaser and Tenant at no time will be
or be deemed to be the employer of employees at any Property, it is expressly
understood and agreed that Purchaser and Tenant are not and shall not be
responsible or liable, directly or indirectly, for payment of any benefits,
severance liability, compensation, pay or other obligations, of whatever nature,
due or alleged to be due to any employee at any Property including employees of
Operator, or of any Owner attributable to any time period up to, upon and after
the Applicable Closing Date. Similarly, there shall be no union agreements,
pension plans, health plans, benefit plans, deferred compensation plans, bonus
plans or vacation plans or similar agreements for or concerning such employees
which shall be binding upon Purchaser or Tenant. Nothing contained in this
Section 6.3 shall be construed to affect any of the rights and obligations of
the parties under the Operating Agreement.
6.4 Existing Agreements. There are no (or will not be at the Applicable
Closing) service contracts, maintenance agreements, leasing commissions or
brokerage agreements, repair contracts, property management contracts, contracts
for the purchase or delivery of labor, services, materials or goods, supplies or
equipment, leases, licensees or occupancy agreements, or similar agreements
entered into by or on behalf of any Owner with respect to any Property which
will be obligations of Purchaser or Tenant after the Applicable Closing, other
than (i) the Permitted Encumbrances, (ii) the documents to be assigned to
Purchaser pursuant to the terms hereof, (iii) the Contracts, (iv) the Lease, (v)
the Transition Period Sublease, if applicable, (vi) the Owner Agreement, (vii)
the Operating Agreement, (viii) the Pooling Agreement, and (ix) any other
document or instrument given or entered into in connection with Applicable
Closing. Nothing contained in this Section 6.4 shall be construed to affect any
of the rights and obligations of the parties under the Operating Agreement.
Notwithstanding the foregoing, if Owner does not obtain the consent from the
applicable lessor necessary to assign to Purchaser any equipment leases with
respect to its Property (each an "Equipment Lease"), Owner shall sublease such
equipment to Purchaser pursuant to the terms of the applicable Equipment Lease
provided that such subletting is not prohibited under such Equipment Lease; if
subletting is prohibited under such Equipment Lease, Owner or its parent shall
provide an alternative arrangement for Purchaser to have use of such equipment
or for Purchaser to enter into a new agreement for use of such or similar
equipment on comparable terms.
6.5 Tax Returns. All privilege, gross receipts, excise, sales and use,
personal property and franchise taxes with respect to each Property resulting
from its operations prior to the Applicable Closing will be paid by Owner as and
when due and payable, and all tax returns for such taxes shall be prepared and
duly filed by such Owner prior to the Applicable Closing Date, or will be
prepared and duly filed by such Owner prior to the due date (including
extensions thereof) under applicable law. All taxes, if any, shown on the
returns described in this Section 6.5 or otherwise, determined to be due prior
to the Applicable Closing, together with any interest or penalties thereon, will
be paid by each Owner prior to the Applicable Closing, or allowance made
therefor at the Applicable Closing.
6.6 Action of MI and Owners. Each Owner and MI has taken all necessary
action to authorize the execution, delivery and performance of this Agreement,
and upon the execution and delivery of any document to be delivered by MI or
each Owner on or prior to each Applicable Closing Date, such document shall
constitute the valid and binding obligation and agreement of MI and/or such
Owner, as applicable, enforceable against MI and/or such Owner, as applicable,
as the case may be, in accordance with its terms, except as enforceability may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
of general application affecting the rights and remedies of creditors and
general principles of equity. The person or persons executing and delivering
this Agreement or any other document to be delivered by MI or any Owner on or
prior to the Applicable Closing Date is or shall have been prior to the
Applicable Closing Date, duly authorized to execute and deliver such documents
on behalf of MI and Owner as applicable.
6.7 No Violations of Agreements. Neither the execution, delivery or
performance of this Agreement by Sellers, and/or MI, nor compliance with the
terms and provisions hereof, will result in any breach of the terms, conditions
or provisions of, or conflict with or constitute a default under, or result in
the creation of any lien, charge or encumbrance upon any Property ~pursuant to
the terms of any indenture, mortgage, deed of trust, note, evidence of
indebtedness or any other agreement or instrument by which any Owner and/or MI,
as the case may be, is bound.
6.8 Litigation. Neither Sellers nor MI have received written notice of
and, to the Sellers' and MI's knowledge, no investigation, action or proceeding
is pending or, to the Sellers' and MI's knowledge, threatened, and the Sellers
have not received written notice of and, to the Sellers' and MI's knowledge, no
investigation looking toward such an action or proceeding has begun, which (a)
questions the validity of this Agreement or any action taken or to be taken
pursuant hereto, or (b) may result in or subject any Property to a material
liability which is not covered by insurance, whether or not Purchaser is
indemnified by any of the Sellers and/or MI with respect to the same, or (c)
involves condemnation or eminent domain proceedings against any material part of
any Property.
6.9 Not A Foreign Person. No Owner is a "foreign person" within the
meaning of Section 1445 of the United States Revenue Code of 1986, as amended,
and the regulations promulgated thereunder.
6.10 Construction Contracts: Mechanics' Liens. At the Applicable
Closing, there will be no outstanding contracts made by any Owner for the
construction or repair of any Improvements relating to its Property which have
not been fully paid for or provision for the payment of which has not been made
by Owner and Owner shall discharge and have released of record or bonded all
mechanics' or materialmen's liens, if any, arising from any labor or materials
furnished to its Property prior to the Applicable Closing to the extent any such
lien is not insured over by the Title Company or bonded over pursuant to
applicable law. If after the Applicable Closing a mechanics' or materialmen's
lien is filed arising from any labor or materials furnished to any Property
prior to the Applicable Closing, Owner shall discharge and have released of
record or bonded any such mechanics' or materialmen's lien within thirty (30)
days from the date Owner has notice that such mechanics' or materialmen's lien
was filed.
6.11 Permits, Licenses. As of the Applicable Closing, there will be in
effect all material Permits and other authorizations necessary for the then
current use, occupancy and operation of each Property, unless failure to obtain
any such Permits and other authorizations is disclosed to Purchaser in writing,
and Purchaser waives compliance herewith in accordance with Section 4.4(b) of
this Agreement.
6.12 Hazardous Substances. Except as otherwise disclosed to Purchaser
and Tenant, including without limitation any matters described in the
Environmental Reports, to the knowledge of MI and each Owner, each Owner, since
the date that such Owner acquired title to its Property, has not stored or
disposed of (or engaged in the business of storing or disposing of, or
authorized the storage or disposal of) nor has released nor caused nor
authorized the release of any hazardous waste, contaminants, oil, radioactive or
other material on such Property, or any portion thereof, the removal of which is
required or the maintenance of which is prohibited or penalized by any
applicable Federal, state or local statutes, laws, ordinances, rules or
regulations, and which has not as of the Applicable Closing Date been removed
from such Property in accordance with such applicable statutes, laws,
ordinances, rules or regulations. To each Owner's and MI's actual knowledge,
except as otherwise disclosed to Purchaser and Tenant, including, without
limitation, any matters described in the Environmental Reports, each Property is
free from any such hazardous waste, contaminants, oil, radioactive and other
materials, except for reasonable amounts of any such materials necessary for the
maintenance, repair and operation of the Property as an assisted living/senior
living facility and stored, maintained and used in accordance with applicable
law.
6.13 Insurance. Sellers have received no written notice from any
insurance carrier of defects or inadequacies in any Property which, if
uncorrected, would result in a termination of insurance coverage or a material
increase in the premiums charged therefor.
6.14 Financial Information. Financial information, including, without
limitation, all books and records and financial statements relating to each
Property, which have been provided to Purchaser by MI and the Sellers are true,
correct and complete in all material respects.
6.15 Contracts. Each Owner has performed in all material respects all
of its obligations under each Contract to which the Owner is a party or is
subject and no fact or circumstance has occurred, which by itself or with the
passage of time or the giving of notice or both would constitute a default under
any such Contract and Owner has the right to assign all of the Contracts which
it is assigning to Purchaser or its designee pursuant to this Agreement.
Further, to each Owner's knowledge, all other parties to such Contracts have
performed all of their obligations thereunder in all material respects and are
not in default thereunder.
6.16 Title to FF&E. Each Owner has good and marketable title to the
FF&E described on the FF&E Schedule. The FF&E that is leased rather than owned
by each Owner is included in the Contracts.
6.17 FF&E. The FF&E Schedule accurately describes in all material
respects the FF&E owned by each Owner and located at the Property. As of the
Applicable Closing Date, the FF&E shall comply in all material respects with the
requirements of the Marriott Standards (as defined in the Operating Agreement).
6.18 No Proffers. As of the Applicable Closing Date, each Owner and/or
MI shall have paid (or the provision for the payment of which has been made by
such Owner) and/or performed, as applicable, all proffers, exactions,
development fees, tap fees, connection charges, impact fees, improvements
(including off-site improvements) and other requirements imposed by applicable
law of any federal, state or local governmental or quasi-governmental authority
in connection with the construction and development of the Property.
6.19 No Violations. Each Owner has complied in all material respects
with all laws, regulations, orders or other requirements issued by any
governmental authority against or affecting the Property. Each Owner has not
received any written notice or order from any governmental authority requiring
any repairs, maintenance or improvements to the Property which have not been
fully performed.
6.20 Separate Tax Parcel. Each Property constitutes a separate parcel
for purposes of ad valorem real property taxes, and is not subject to a lien for
non-payment of real property taxes relating to any other property.
6.21 No Defaults. There exists no material default on the part of any
Owner or MI with respect to any Permitted Encumbrance affecting each Property,
other than those defaults which can be cured or discharged by the payment of
money and for which an allowance for the payment thereof has been made at the
Applicable Closing. Notwithstanding anything to the contrary contained in this
Section 6 regarding the survival period for the representations and warranties
made hereunder, the representation and warranty made in this Section 6.21 by
each Owner and MI shall survive the Applicable Closing for an unlimited period
of time.
6.22 American with Disabilities Act. As of the Applicable Closing Date,
each Property shall comply in all material respects with the Americans with
Disabilities Act and all related and applicable laws, rules, regulations and/or
orders governing or relating to accessibility.
The representations and warranties made in this Agreement by
Sellers and MI, in Section 6.1 through Section 6.9, inclusive, are made as of
the Effective Date and shall be deemed remade by Sellers and MI, as of the
Applicable Closing Date, with the same force and effect as if made on, and as
of, the Applicable Closing Date; and the representations and warranties made in
this Agreement by Sellers and MI, in Section 6.10 through Section 6.22,
inclusive, shall be made as of the Applicable Closing Date, provided, however,
that, MI and Sellers shall have the right, from time to time prior to the
Applicable Closing Date, to modify the representations and warranties made in
Section 6.7 (No Violations of Agreements), Section 6.8 (Litigation), Section
6.13 (Insurance), and Section 6.19 (No Violations) as a result of changes in
applicable conditions beyond the control of MI or Sellers, by notice to
Purchaser and Tenant and, in such event, the representations and warranties
shall be deemed modified to the extent required by such changes, and (a) if
Sellers and MI agree to indemnify Purchaser and Tenant against any loss that may
be suffered by Purchaser or Tenant as a result of such changes, then Purchaser
and Tenant will be required to close hereunder without any abatement of Purchase
Price or changes in any other condition, and (b) if Sellers and MI elect not to
so indemnify Purchaser and Tenant, Purchaser and Tenant shall each have the
option to either accept the change and close, or reject the change, in which
case, if either Purchaser or Tenant rejects such change, Purchaser's obligation
to purchase the Properties and Tenant's obligation to lease the Properties shall
terminate. Except as specifically provided otherwise, all representations and
warranties made in this Agreement by Sellers and MI shall survive the Applicable
Closing for a period of one (1) year. Any action, suit or proceeding with
respect to the truth, accuracy or completeness of any such representation or
warranty shall be commenced and served promptly, if at all, on or before the
date which is twelve (12) months after the Applicable Closing Date and, if not
commenced on or before such date, thereafter shall be void and of no force or
effect.
Prior to the Initial Closing, Purchaser and Tenant will have
had the opportunity to investigate independently all physical aspects of each
Property, and to make all such independent inspections and/or investigations of
any Property that Purchaser or Tenant deems necessary or desirable including,
without limitation, review of the building permits, certificates of occupancy,
environmental audits and assessments, toxic reports, surveys, investigation of
land use and development rights, development restrictions and conditions that
are or may be imposed by governmental agencies, agreements with associations or
other private parties affecting or concerning such Property, the condition of
title, soils and geological reports, engineering and structural certificates,
tests and third-party reports (if any), governmental agreements and approvals
and architectural plans and site plans. Purchaser and Tenant each represent and
warrant that, in entering into this Agreement, it has not relied on any
representation, warranty, promise or statement, express or implied, of Sellers
or MI or anyone acting for or on behalf of Sellers or MI, other than as
expressly set forth in this Agreement; AND THAT, AS A MATERIAL INDUCEMENT TO THE
EXECUTION AND DELIVERY OF THIS AGREEMENT BY SELLERS, MI, PURCHASER AND TENANT
EACH ACKNOWLEDGE THAT THE PROPERTIES WILL, UPON THE ACQUISITION BY THE
APPLICABLE PROPERTY TRANSFEREES AND TENANT OF THEIR RESPECTIVE INTERESTS IN SUCH
PROPERTY, BE IN THEIR "AS IS" CONDITION AND IN THEIR "AS IS" STATE OF REPAIR,
WITH ALL FAULTS SUBJECT ONLY, HOWEVER, TO THE EXPRESS COVENANTS, REPRESENTATIONS
AND WARRANTIES MADE BY THE SELLERS AND MI FOR THE BENEFIT OF PURCHASER AND/OR
TENANT EXPRESSLY SET FORTH IN THIS AGREEMENT.
Except as otherwise expressly provided in this Agreement or
any documents executed and delivered by any Owner or MI to Purchaser or Tenant
at the Applicable Closing, each Owner and MI disclaim the making of any
representations or warranties, express or implied, regarding any Property or
matters affecting the same, whether made by such Owner or MI, on Owner's behalf
or on MI's behalf, or otherwise, including, without limitation, the physical
condition of the Property, title to, the boundaries or other survey matters of,
the Real Property, pest control matters, soil conditions, the presence,
existence or absence of hazardous wastes, toxic substances or other
environmental matters, compliance with building, health, safety, land use and
zoning laws, regulations and orders, structural and other engineering
characteristics, traffic patterns, market data, economic conditions or
projections, and any other information pertaining to such Property or the market
and physical environments in which the Property is located. Purchaser and Tenant
each acknowledge that it has entered into this Agreement with the intention of
making and relying upon its own investigation or that of third parties with
respect to the physical, environmental, economic and legal condition of each
Property, except as expressly provided in this Agreement. Purchaser and Tenant
each further acknowledge that it has not received from or on behalf of any Owner
or MI, any accounting, feasibility, marketing, economic, tax, legal,
architectural, engineering, property management or other advice with respect to
this transaction and is relying solely upon the advice of third party
accounting, tax, legal, architectural, engineering, property management and
other advisors.
As used in this Agreement, the phrases "to Sellers'
knowledge," "to Owner's knowledge," "MI's knowledge," "to Owner's and MI's
knowledge" and "to Sellers' and MI's knowledge" or words of similar import shall
mean the actual (and not constructive or imputed) knowledge, without independent
investigation or inquiry, of Xxxxxxx X. Xxxxxxx, Xxxxx Xxxxxxx and Xxxxx
Xxxxxxx.
SECTION 7 REPRESENTATIONS AND WARRANTIES OF PURCHASER.
To induce MI, Sellers and Tenant to enter into this Agreement,
Purchaser represents and warrants to MI, Sellers and Tenant as follows:
7.1 Status and Authority of Purchaser. Purchaser is duly organized and
validly existing under the laws of the jurisdiction in which it was formed, and
has all requisite power and authority under the laws of such state and under its
charter documents to enter into and perform its obligations under this Agreement
and to consummate the transactions contemplated hereby. Purchaser is, or will be
by the Applicable Closing Date, duly qualified and in good standing in the state
in which each Property is located.
7.2 Action of Purchaser. Purchaser has taken all necessary action to
authorize the execution, delivery and performance of this Agreement, and upon
the execution and delivery of any document to be delivered by Purchaser on or
prior to the Applicable Closing Date, such document shall constitute the valid
and binding obligation and agreement of Purchaser, enforceable against Purchaser
in accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws of general
application affecting the rights and remedies of creditors and general
principles of equity. The person or persons executing and delivering this
Agreement or any other document to be delivered by Purchaser on or prior to the
Applicable Closing Date is or shall have been prior to the Applicable Closing
Date, duly authorized to execute and deliver such documents on behalf of
Purchaser.
7.3 No Violations of Agreements. Neither the execution, delivery or
performance of this Agreement by Purchaser, nor compliance with the terms and
provisions hereof, will result in any breach of the terms, conditions or
provisions of or conflict with or constitute a default under, or result in the
creation of any lien, charge or encumbrance upon any Property or assets of
Purchaser, pursuant to the terms of any indenture, mortgage, deed of trust,
note, evidence of indebtedness or any other agreement or instrument by which
Purchaser is bound.
7.4 Litigation. Purchaser has received no written notice of and, to
Purchaser's knowledge, no investigation, action or proceeding is pending and, to
Purchaser's knowledge, no action or proceeding is threatened and Purchaser has
received no notice of, and to Purchaser's knowledge no investigation looking
toward such an action or proceeding has begun, which (a) questions the validity
of this Agreement or any action taken or to be taken pursuant hereto, or (b) may
result in or subject any Property to a material liability which is not covered
by insurance, whether or not Purchaser is indemnified by Sellers and/or MI with
respect to the same, or (c) involves condemnation or eminent domain proceedings
against any material part of any Property.
The representations and warranties made in this Agreement by
Purchaser are made as of the Effective Date and shall be deemed remade by
Purchaser as of the Applicable Closing Date with the same force and effect as if
made on, and as of, such date. Except as specifically provided otherwise herein,
all representations and warranties made in this Agreement by Purchaser shall
survive the Applicable Closing for a period of one (1) year. Any action, suit or
proceeding with respect to the truth, accuracy or completeness of any such
representation or warranty shall be commenced and served promptly, if at all, on
or before the date which is twelve (12) months after the Applicable Closing Date
and, if not commenced on or before such date, thereafter shall be void and of no
force or effect.
As used in this Agreement, the phrase "to Purchaser's
knowledge" or words of similar import shall mean the actual (and not
constructive or imputed) knowledge, without independent investigation or
inquiry, of Xxxxxxx X. Xxxxxxxx and Xxxx Xxxx.
SECTION 7A. REPRESENTATIONS AND WARRANTIES OF TENANT.
To induce MI, Sellers and Purchaser to enter into this Agreement,
Tenant represents and warrants to the MI, Sellers and Purchaser as follows:
7A.1 Status and Authority of Tenant. The Tenant is duly organized
and validly existing under the laws of the jurisdiction in which it was formed,
and has all requisite power and authority under the laws of such state and under
its charter documents to enter into and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby. The Tenant is,
or will by the Initial Closing Date become, duly qualified and in good standing
in each of the states in which the Properties are located.
7A.2 Actions of Tenant. The Tenant has taken all necessary action
to authorize the execution, delivery and performance of this Agreement, and upon
the execution and delivery of any document to be delivered by the Tenant on or
prior to the Applicable Closing Date, such document shall constitute the valid
and binding obligation and agreement of the Tenant, enforceable against the
Tenant in accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws of general
application affecting the rights and remedies of creditors and general
principles of equity. The person or persons executing and delivering this
Agreement or any other document to be delivered by Tenant on or prior to the
Applicable Closing Date is or shall have been prior to the Applicable Closing
Date, duly authorized to execute and deliver such documents on behalf of Tenant.
7A.3 No Violations of Agreements. Neither the execution, delivery
or performance of this Agreement by the Tenant, nor compliance with the terms
and provisions hereof, will result in any breach of the terms, conditions or
provisions of or conflict with or constitute a default under, or result in the
creation of any lien, charge or encumbrance upon any property or assets of the
Tenant pursuant to the terms of any indenture, mortgage, deed of trust, note,
evidence of indebtedness or any other agreement or instrument by which the
Tenant is bound.
7A.4 Litigation. The Tenant has not received any written notice of,
and to the Tenant's knowledge, no investigation, action or proceeding is pending
and, to the Tenant's knowledge, no action or proceeding is threatened and the
Tenant has not received any notice of, and to the Tenant's knowledge no
investigation looking toward such an action or proceeding has begun, which
questions the validity of this Agreement or any action taken or to be taken
pursuant hereto.
7A.5 Tenant's Financial Condition. The Tenant has delivered to
Sellers and Purchaser a balance sheet of Tenant dated May 16, 2002 which
reflects the financial condition of Tenant as of May 16, 2002.
The representations and warranties made in this Agreement by the Tenant
are made as of the Effective Date and shall be deemed remade by the Tenant as of
the Applicable Closing Date with the same force and effect as if made on, and as
of, such date. Except as specifically provided otherwise herein, all
representations and warranties made in this Agreement by the Tenant shall
survive the Applicable Closing for a period of one (1) year. Any action, suit or
proceeding with respect to the truth, accuracy or completeness of any such
representations or warranty shall be commenced and served, if at all, on or
before the date which is twelve (12) months after the date of such Applicable
Closing and, if not commenced on or before such date, thereafter shall be void
and of no force or effect.
As used in this Agreement, the phrases "to the Tenant's knowledge" or
words of similar import shall mean the actual (and not constructive or imputed)
knowledge, without independent investigation or inquiry, of Xxxxxxx X. Xxxxx and
Xxxxxx X. Xxxxxxx.
SECTION 8 COVENANTS OF MI AND OWNERS.
Each Owner and MI hereby covenants with Purchaser as follows:
8.1 Compliance with Laws. From the Effective Date to the Applicable
Closing Date, each Owner shall use commercially reasonable efforts to comply in
all material respects with (i) all laws, regulations and other requirements
affecting its Property, from time to time applicable, of every governmental body
having jurisdiction of such Property or the use or occupancy of any Improvements
located thereon, and (ii) all terms, covenants and conditions of instruments of
record affecting such Property.
8.2 Construction. Each Owner agrees to cooperate with the Purchaser
and/or Tenant in enforcing any applicable warranties or guaranties with respect
to any defects in the Improvements that are discovered after the Applicable
Closing. The provisions of this Section 8.2 shall survive any Applicable Closing
under this Agreement.
8.3 Insurance. Each Owner shall, at no expense to such Owner,
reasonably cooperate with Purchaser or Tenant in connection with Purchaser's or
Tenant's obtaining any insurance which may be required to be maintained by
Purchaser or Tenant under the terms of each Lease.
SECTION 9 APPORTIONMENTS.
9.1 Apportionments.
(a) All real estate taxes (including special assessments
attributable to the period prior to the Applicable Closing) and items of income
and expense with respect to each Property shall be adjusted between Sellers and
Purchaser as of the Applicable Closing Date. All items of revenue, cost and
expense of each Property with respect to the period prior to the Applicable
Closing Date shall be for the account of each Owner. All items of revenue, cost
and expense of each Property with respect to the period from and after the
Applicable Closing Date shall be for the account of Tenant according to the
terms of the Lease. The adjustments hereunder shall be calculated or paid in an
amount based upon a fair and reasonable estimated accounting performed and
agreed to by representatives of Sellers, Purchaser and Tenant at the Applicable
Closing. Subsequent final adjustments and payments shall be made in cash or
other immediately available funds as soon as practicable after the Applicable
Closing Date, and in any event within ninety (90) days after the Initial Closing
Date, based upon an accounting performed by the Operator and acceptable to
Sellers, Purchaser and Tenant. In the event the parties have not agreed with
respect to the adjustments required to be made pursuant to this Section 9.1
within such 90 day period, upon application by any such party, a certified
public accountant reasonably acceptable to the parties to such disputed
adjustment shall determine any such adjustments which have not theretofore been
agreed to between such parties. The charges of such accountant shall be borne
equally by the parties to such disputed adjustment. All adjustments to be made
as a result of the final results of the adjustments shall be paid to the party
entitled to such adjustment within thirty (30) days after the final
determination thereof.
(b) The provisions of this Section 9.1 shall survive the
Applicable Closing.
9.2 Closing Costs.
(a) All Third-Party Costs (hereinafter defined) shall be borne one
hundred percent (100%) by Purchaser and shall be in addition to the payment of
the Purchase Price. Notwithstanding the foregoing, if the amount of all
Third-Party Costs exceeds $1,276,970, (i) the Sellers shall be responsible for
an amount ("Seller's Portion of Third-Party Costs") equal to the product of
fifty percent (50%) of the difference between an amount equal to all Third-Party
Costs less $1,276,970 and (ii) the Purchaser shall be responsible for an amount
("Purchaser's Portion of Third-Party Costs") equal to the sum of (x) $1,276,970
plus (y) the product of fifty percent (50%) of the difference between an amount
equal to all Third-Party Costs less $1,276,970. The Purchaser's Portion of
Third-Party Costs shall be in addition to the payment of the Purchase Price and
at Sellers' option, Seller's Portion of Third-Party Costs may be deducted by
Purchaser against the Purchase Price. As used herein, the term "Third-Party
Costs" shall include the following costs and expenses which are incurred by
Sellers, Purchaser or CNL Retirement Properties, Inc. or their respective
Affiliates: (i) Environmental Reports prepared prior to the Initial Closing Date
in connection with the purchase and sale of the Properties; (ii) the Surveys
prepared prior to the Initial Closing Date pursuant to Section 2.4(a); (iii)
premiums for the title insurance policies and endorsements to be provided at the
Applicable Closing pursuant to the terms of this Agreement; (iv) any closing or
escrow charges or other expenses payable on the Applicable Closing Date to the
Title Company conducting the Applicable Closing; (v) property appraisals
prepared prior to the Initial Closing Date in connection with the purchase and
sale of the Properties pursuant to this Agreement; (vi) local counsel fees
incurred in connection with the consummation of the Applicable Closing or
incurred prior to the sixth month anniversary of the Initial Closing Date in
connection with the transfer of Permits pursuant to Section 4.8 or in connection
with the consummating of the closing of the Financing (which fees shall be
limited to those incurred in connection with usual and customary local counsel
services in similar commercial real estate transactions); (vii) fees and
expenses charged by any governmental entity prior to the sixth month anniversary
of the Initial Closing Date relating to the transfer of Permits pursuant to
Section 4.8 ; (viii) the third-party market assessment reports obtained by
Purchaser prior to the Initial Closing Date; (ix) the third-party architectural
and engineering inspection reports of the Properties obtained by the Purchaser
prior to the Initial Closing Date; (x) the third-party audited Special Purpose
Financing Statement for each Property obtained by Purchaser prior to the Initial
Closing Date, (xi) any other separate out-of-pocket costs and expenses incurred
by Sellers or Purchaser or their respective Affiliates in connection with the
consummation of the Applicable Closing or incurred in connection with the
consummation of the closing of the Financing (included those of a type referred
to in the preceding clauses of this paragraph), including but not limited to the
fees and expenses of outside counsel of Sellers, Purchaser, Tenant and their
respective Affiliates (and outside counsel of the lender providing the Financing
to the extent required by the loan documents executed by the Purchaser) in
connection with the preparation and negotiation of this Agreement and all other
documents and instruments in connection with the consummation of the Applicable
Closing or in connection with the consummating of the Financing; and (xii)
Transfer Taxes incurred on the Applicable Closing Date or in connection with the
consummation of the Financing. Third-Party Costs may be advanced by either
Sellers or CNL Retirement Properties, Inc. or their respective Affiliates or any
Affiliate of Sellers prior to the Applicable Closing (but shall be reimbursed by
Purchaser or Sellers, as applicable, to the party incurring the same at the
Applicable Closing. All amounts payable by Purchaser under this Section 9.2(a)
shall be paid by the Applicable Property Transferees in the event that the
Applicable Closing is consummated hereunder, which amounts (i) shall be
allocated to the Applicable Property Transferee if and to the extent that any
amount specifically relates only to the Property acquired by such Applicable
Property Transferee (as is the case, for example, with respect to title
insurance and Transfer Taxes) or (ii) shall be allocated among all the
Applicable Property Transferees in proportion to the allocation of the Purchase
Price among the Applicable Property Transferees set forth in Schedule I if and
to the extent that any amount does not specifically relate only to the Property
acquired by an Applicable Property Transferee. To the extent that the
Third-Party Costs are known and have or shall be paid on or prior to the
Applicable Closing Date, within two Business Days prior to the Applicable
Closing Date, Purchaser shall provide Sellers with written notice and a copy of
the calculations of any amounts due to Purchaser or to Sellers pursuant to this
Section and such party responsible for reimbursing the other party for its
portion of these costs and expenses shall reimburse the applicable party on the
Applicable Closing Date. No later than thirty (30) days after the sixth month
anniversary of the Initial Closing Date, Purchaser shall provide Sellers with
written notice and a copy of the calculations of any amounts due to Purchaser or
to Sellers pursuant to this Section which were not paid by the applicable party
on the Applicable Closing Date and such party responsible for reimbursing the
other party for its portion of these costs and expenses shall promptly reimburse
the applicable party.
(b) As used herein, the term "Transfer Taxes" shall mean any
transfer, sales, use, recordation or other similar taxes, impositions, expenses
or fees incurred in connection with each Applicable Closing and the consummation
of the Financing and/or the recordation or filing of any documents or
instruments in connection therewith or the sale, transfer or conveyance of the
Properties from Sellers to Purchaser or the lease of each Property from
Purchaser to Tenant. Transfer Taxes shall not include, and each Owner shall be
solely responsible for any taxes due in respect of its income, net worth or
capital, if any, and any privilege, sales and occupancy taxes, due or owing to
any governmental entity in connection with the operation of its Property for any
period of time prior to the Applicable Closing, and Purchaser or Tenant, as
applicable, shall be solely responsible for all such taxes for any period from
and after the Applicable Closing, and provided further that any income tax
arising as a result of the sale and transfer of any Property by Sellers to
Purchaser shall be the sole responsibility of Sellers.
(c) Except as expressly provided in this Section 9, Tenant shall
pay its own separate costs and expenses incurred in connection with the
transactions contemplated hereby.
(d) The obligations of the parties under this Section 9 shall
survive the Applicable Closing.
SECTION 10 LIMITATIONS ON LIABILITY.
10.1 Limitations on Liability.
(a) The parties hereto confirm and agree that in each instance
herein where a party or its Affiliates is entitled to payment or reimbursement
for damages, costs or expenses pursuant to the terms and conditions of this
Agreement, any payment or reimbursement made to such party shall be conclusively
deemed to be for the account of both such party and its Affiliates, it being
acknowledged and agreed that a payment or reimbursement made to such party for
damages, costs or expenses shall be sufficient to satisfy all claims for payment
or reimbursement of such party and its Affiliates. The parties further confirm
and agree that no party hereto (a "Non-Performing Party") will be deemed to be
in default hereunder or be liable for any breach of its representations and
warranties under this Agreement if its failure to perform an obligation
hereunder is based solely on the non-performance of another party to this
Agreement (which other party is not an Affiliate of the Non-Performing Party) or
where all conditions precedent to the obligation of such Non-Performing Party to
consummate the Applicable Closing under Section 4 have not been fulfilled.
(b) To the maximum extent permitted by applicable law, no
shareholder, director, officer or employee of any party to this Agreement shall
have any personal liability with respect to the liabilities or obligations of
such party under this Agreement or any document executed by such party pursuant
to this Agreement.
SECTION 11 MISCELLANEOUS.
11.1 Agreement to Indemnify.
(a) From and after the Applicable Closing Date (i) Sellers and MI
shall jointly and severally indemnify, defend and hold harmless Purchaser and
Tenant from and against any and all obligations, claims, losses, damages,
liabilities, and expenses (including, without limitation, reasonable attorneys'
and accountants' fees and disbursements) arising out of (v) any termination of
employment of employees at the Property prior to or upon the Applicable Closing
Date resulting from the termination of employment of such employees by Sellers,
Sellers' Affiliate or their respective operator and/or the failure of the
Operator to hire such employees (including, without limitation, severance pay,
wrongful discharge claims, and claims and/or fines under Federal, state or local
statutes or regulations, including, without limitation, the Worker Adjustment
and Retraining Notification Act), (w) the employment of such individuals prior
to the Applicable Closing Date, including, without limitation,
employment-related claims; COBRA-related claims; disability claims; vacation;
sick leave; wages; salaries; payments due (or allocable) to any medical,
pension, and health and welfare plans, and any other employee benefit plan
established for the employees at each Property; and employee-related tax
obligations such as, but not limited to, social security and unemployment taxes
accrued as of the Applicable Closing Date, (x) events, acts, or omissions of
Sellers that occurred in connection with their respective ownership or operation
of each Property prior to the Applicable Closing Date or obligations accruing
prior to the Applicable Closing Date under any Contract of Sellers (except to
the extent of any adjustment made in respect of such Contract at the Applicable
Closing), (y) any material breach of a representation or warranty made by
Sellers and MI under Section 6 of which Purchaser or Tenant did not have
knowledge of such breach prior to or on the Applicable Closing Date (as such
representations and warranties may be modified pursuant to said Section 6 and
subject to the one (1) year limitation period set forth therein, if applicable),
or (z) any claim against Purchaser or Tenant for damage to property of others or
injury to or death of any person or any debts or obligations of or against
Sellers and arising out of any event occurring on or about or in connection with
any Property or any portion thereof, at any time or times prior to the
Applicable Closing Date, (ii) Purchaser shall indemnify, defend and hold
harmless Sellers, MI and Tenant from and against any and all obligations,
claims, losses, damages, liabilities and expenses (including, without
limitation, reasonable attorneys' and accountants' fees and disbursements)
arising out of (x) events, acts, or omissions of Purchaser that occur in
connection with its ownership or operation of each Property from and after the
Applicable Closing Date or obligations accruing from and after the Applicable
Closing Date under any Contract of Sellers (or any Contract of the Operator
executed on behalf of Sellers) (except to the extent of any adjustment made in
respect of such Contract at the Applicable Closing), provided that any provision
of any Lease, Operating Agreement or Owner Agreement that applies to such event,
act or omission shall take precedence over the indemnity provided for in this
clause (x), or (y) any material breach of a representation or warranty made by
Purchaser under Section 7 as such representations and warranties may be modified
pursuant to said Section 7 (and subject to the one (1) year limitation period
set forth therein); and (iii) the Tenant shall indemnify, defend and hold
harmless MI, Sellers and Purchaser from and against any and all obligations,
claims, losses, damages, liabilities and expenses (including, without
limitation, reasonable attorneys' and accountants' fees and disbursements)
arising out of any material breach of a representation or warranty made by
Tenant under Section 7A (subject to the one (1) year limitation period set forth
therein).
(b) The provisions of this Section 11.1 shall not apply to any
liabilities or obligations with respect to hazardous substances, the liabilities
of the parties with respect thereto being governed by the representation and
warranty of Sellers set forth in Section 6.12. The indemnity provided for in
this Section 11.1 shall not extend to any consequential damages or punitive
damages.
(c) Whenever it is provided in this Agreement that an obligation
will continue after the Applicable Closing as an obligation of Purchaser or be
assumed by Purchaser after the Applicable Closing, Purchaser shall be deemed to
have also agreed to indemnify and hold harmless Sellers, MI and Tenant and their
respective successors and assigns from and against any claims, losses, damages,
liabilities, costs, and expenses (including, without limitation, reasonable
attorneys' and accountants' fees and expenses) arising from any failure of
Purchaser to perform the obligation so continued or assumed after the Applicable
Closing (but not with respect to any act or omission which occurred prior to the
Applicable Closing).
(d) Whenever any party shall learn through the filing of a claim
or the commencement of a proceeding or otherwise of the existence of any
liability for which another party is or may be responsible under this Agreement,
the party learning of such liability shall notify the other party promptly and
furnish such copies of documents (and make originals thereof available) and such
other information as such party may have that may be used or useful in the
defense of such claims and shall afford said other party full opportunity to
defend the same in the name of such party and shall generally cooperate with
said other party in the defense of any such claim.
(e) The provisions of this Section 11.1 shall survive the
Applicable Closing hereunder subject to the limitations set forth in this
Section 11.1. Except as specifically provided otherwise herein, all
representations and warranties made in this Agreement shall survive the
Applicable Closing for a period of one (1) year. With respect to all
representations and warranties made in this Agreement which survive the
Applicable Closing for a period of twelve (12) months after the Applicable
Closing Date, any action, suit or proceeding with respect to the truth, accuracy
or completeness of any such representation or warranty shall be commenced, if at
all, on or before the date which is twelve (12) months after the Applicable
Closing Date and served promptly (but in no event later than sixty (60) days
after commencement) and, if not commenced on or before such date and so served,
thereafter shall be void and of no force or effect.
11.2 Brokerage Commissions. Each of the parties hereto represents to
the other parties that it dealt with no broker, finder or like agent in
connection with this Agreement or the transactions contemplated hereby, and that
it reasonably believes that there is no basis for any other person or entity to
claim a commission or other compensation for bringing about this Agreement or
the transactions contemplated hereby. Sellers shall indemnify and hold harmless
Purchaser and Tenant and their successors and assigns from and against any loss,
liability or expense, including, reasonable attorneys' fees, arising out of any
claim or claims for commissions or other compensation for bringing about this
Agreement or the transactions contemplated hereby made by any broker, finder or
like agent, if such claim or claims are based in whole or in part on dealings
with Sellers. Purchaser or Tenant, as the case may be, shall indemnify and hold
harmless Sellers and MI and their successors and assigns from and against any
loss, liability or expense, including, reasonable attorneys' fees, arising out
of any claim or claims for commissions or other compensation for bringing about
this Agreement or the transactions contemplated hereby made by any broker,
finder or like agent, if such claim or claims are based in whole or in part on
dealings with Purchaser or Tenant, as the case may be. Nothing contained in this
section shall be deemed to create any rights in any third party. The provisions
of this Section 11.2 shall survive the Applicable Closing hereunder and any
termination of this Agreement.
11.3 Publicity. The parties agree that no party shall, with respect to
this Agreement and the transactions contemplated hereby, contact or conduct
negotiations with public officials, make any public pronouncements, issue press
releases or otherwise furnish information regarding this Agreement or the
transactions contemplated hereby to any third party without the consent of the
other party, which consent shall not be unreasonably withheld, conditioned or
delayed, except as may be required by law or as may be reasonably necessary, on
a confidential basis, to inform any rating agencies, potential sources of
financing, financial analysts, or to entities involved with a sale of a
Controlling Interest in Sellers, Purchaser or Tenant or any of their Affiliates
or to receive legal, accounting and/or tax advice; provided, however, that, if
such information is required to be disclosed by law, the party so disclosing the
information will use reasonable efforts to give notice to the other parties as
soon as such party learns that it must make such disclosure. Notwithstanding the
foregoing, if such information is required to be disclosed to any governmental
authority to facilitate the transfer of Permits pursuant to Section 4.8, the
disclosing party may disclose such information without the consent of the other
parties and shall promptly give written notice to the other parties of such
information which was disclosed.
11.4 Notices.
(a) Any and all notices, demands, consents, approvals, offers,
elections and other communications required or permitted under this Agreement
shall be deemed adequately given if in writing and the same shall be delivered
either in hand, or by mail or Federal Express or similar expedited commercial
carrier, addressed to the recipient of the notice, postpaid and registered or
certified with return receipt requested (if by mail), or with all freight
charges prepaid (if by Federal Express or similar carrier).
(b) All notices required or permitted to be sent hereunder shall
be deemed to have been given for all purposes of this Agreement upon the date of
acknowledged receipt, upon the date of receipt or refusal, except that whenever
under this Agreement a notice is either received on a day which is not a
Business Day or is required to be delivered on or before a specific day which is
not a Business Day, the day of receipt or required delivery shall automatically
be extended to the next Business Day.
(c) All such notices shall be addressed,
if to MI, Sellers or any Owner, to:
Marriott International, Inc.
00000 Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Chief Financial Officer
with a copy to:
Marriott International, Inc.
00000 Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: General Counsel
and
Marriott International, Inc.
00000 Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Treasurer
and
Arent Fox Xxxxxxx Xxxxxxx & Xxxx, PLLC
0000 Xxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000-0000
Attn: Xxxxxx Xxxxx, Esq.
if to Purchaser, to:
c/o CNL Retirement Corp.
CNL Center at City Commons
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Chief Operating Officer
with a copy to:
Lowndes, Drosdick, Doster, Xxxxxx & Xxxx, P.A.
000 Xxxxx Xxxx Xxxxx
Post Office Box 2809
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx, Esq.
if to Tenant:
HRA Management Corporation
000 Xxxxxx Xxxxx
Xxxx Xxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx
with a copy to:
Xxxxx & Lardner
000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attn: J. Xxxxxx Xxxxx, Esq.
(d) By notice given as herein provided, the parties hereto and
their respective successors and assigns shall have the right from time to time
and at any time during the term of this Agreement to change their respective
addresses effective upon receipt by the other parties of such notice and each
shall have the right to specify as its address any other address within the
United States of America.
11.5 Waivers, Etc. Any waiver of any term or condition of this
Agreement, or of the breach of any covenant, representation or warranty
contained herein, in any one instance, shall not operate as or be deemed to be
or construed as a further or continuing waiver of any other breach of such term,
condition, covenant, representation or warranty or any other term, condition,
covenant, representation or warranty, nor shall any failure at any time or times
to enforce or require performance of any provision hereof operate as a waiver of
or affect in any manner such party's right at a later time to enforce or require
performance of such provision or any other provision hereof. This Agreement may
not be amended nor shall any waiver, change, modification, consent or discharge
be effected, except by an instrument in writing executed by or on behalf of the
party against whom enforcement of any amendment, waiver, change, modification,
consent or discharge is sought.
11.6 Assignment; Successors and Assigns. Except as otherwise provided
herein, this Agreement and all rights and obligations hereunder shall not be
assignable by any party without the written consent of the other parties. This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and permitted assigns. This Agreement is
not intended and shall not be construed to create any rights in or to be
enforceable in any part by any other persons.
11.7 Severability. If any provision of this Agreement shall be held or
deemed to be, or shall in fact be, invalid, inoperative or unenforceable as
applied to any particular case in any jurisdiction or jurisdictions, or in all
jurisdictions or in all cases, because of the conflict of any provision with any
constitution or statute or rule of public policy or for any other reason, such
circumstance shall not have the effect of rendering the provision or provisions
in question invalid, inoperative or unenforceable in any other jurisdiction or
in any other case or circumstance or of rendering any other provision or
provisions herein contained invalid, inoperative or unenforceable to the extent
that such other provisions are not themselves actually in conflict with such
constitution, statute or rule of public policy, but this Agreement shall be
reformed and construed in any such jurisdiction or case as if such invalid,
inoperative or unenforceable provision had never been contained herein and such
provision reformed so that it would be valid, operative and enforceable to the
maximum extent permitted in such jurisdiction or in such case.
11.8 Counterparts, Etc. This Agreement may be executed in two (2) or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement
constitutes the entire agreement of the parties hereto with respect to the
subject matter hereof and shall supersede and take the place of any other
instruments purporting to be an agreement of the parties hereto relating to the
subject matter hereof. This Agreement may not be amended or modified in any
respect other than by the written agreement of all of the parties hereto.
11.9 Governing Law; Jurisdiction; Waiver of Jury Trial.
(a) This Agreement shall be interpreted, construed, applied and
enforced in accordance with the laws of the State of Maryland.
(b) To the maximum extent permitted by applicable law, any action
to enforce, arising out of, or relating in any way to, any of the provisions of
this Agreement shall be brought and prosecuted in such court or courts located
in the State of Maryland as is provided by law; and the parties consent to the
jurisdiction of said court or courts located in the State of Maryland and to
service of process by registered mail, return receipt requested, or by any other
manner provided by law.
(c) EACH PARTY HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY
ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO
THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THIS
AGREEMENT, THE LEASE OR ANY OTHER DOCUMENT RELATED TO THIS AGREEMENT, OR ANY
CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER
OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY EACH PARTY, AND
IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH
THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. ANY PARTY IS HEREBY
AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE
EVIDENCE OF THIS WAIVER BY EACH PARTY HERETO.
11.10 Performance on Business Days. In the event the date on which
performance or payment of any obligation of a party required hereunder is other
than a Business Day, the time for payment or performance shall automatically be
extended to the first Business Day following such date.
11.11 Attorneys' Fees. If any lawsuit or arbitration or other legal
proceeding arises in connection with the interpretation or enforcement of this
Agreement, the prevailing party therein shall be entitled to receive from the
other party the prevailing party's costs and expenses, including reasonable
attorneys' fees, incurred in connection therewith, in preparation therefor and
on appeal therefrom, which amounts shall be included in any judgment therein.
11.12 Relationship. Nothing herein contained shall be deemed or
construed by the parties hereto, nor by any third party, as creating the
relationship of principal and agent or of partnership or joint venture between
the parties hereto, it being understood and agreed that (except as and to the
extent specifically provided for herein) no provision contained herein, nor any
acts of the parties hereto shall be deemed to create the relationship between
the parties hereto other than the relationship of seller and purchaser and
landlord and prospective tenant, as the case may be.
11.13 Section and Other Headings. The headings contained in this
Agreement are for reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement.
11.14 Disclosure. From and after Applicable Closing Date, and at the
written request of Purchaser, each Owner shall provide such financial statements
in respect of Owner's operations relating to its Property from the date of
Owner's commencement of business to the Applicable Closing Date to the extent
such financial statements are required by applicable securities laws and
regulations and the SEC's interpretation thereof; provided, however, that (i)
such Owner reserves the right, in good faith, to challenge, and require
Purchaser to use commercially reasonable efforts to challenge, any assertion by
the SEC, any other applicable regulatory authority, or Purchaser's independent
public accountants that applicable law or regulations require the provision of
such financial statements, (ii) Purchaser shall not, without such Owner's
consent (which consent shall not be unreasonably withheld, delayed or
conditioned), acquiesce to any such challenged assertion until Purchaser has
exhausted all reasonable available avenues of administrative review, and (iii)
Purchaser shall consult with such Owner in pursuing any such challenge and will
allow Owner to participate therein if and to the extent that Owner so elects.
Any and all costs and expenses incurred by Owner, including, without limitation,
reasonable attorneys' fees and expenses, in connection with providing such
financial statements to Purchaser or in connection with any challenge to an SEC
assertion (including Owner's consultation or participation with Purchaser in
respect of same) shall be reimbursed to Owner by Purchaser within ten (10) days
following written demand by Owner.
11.15 Acknowledgment of Tenant's Financial Condition. Sellers,
Purchaser and Tenant (by their signatures below) and each Applicable Property
Transferee (by executing the Assignment of Purchase Contract between the Seller
and the Applicable Property Transferees) hereby (i) acknowledge that they have
received information concerning the financial condition of each of the parties
hereto, and (ii) agree that, in light of the obligations of the respective
parties under the Purchase Agreement and all other documents executed pursuant
to the Purchase Agreement (collectively the "Transaction Documents"), the
financial condition of each party hereto and the Applicable Property Transferees
is acceptable to all such entities for the carrying out of each such entity's
respective obligations under the Transaction Documents.
[SIGNATURES APPEAR ON THE FOLLOWING PAGES]
IN WITNESS WHEREOF, the parties have caused this Purchase Agreement to be
executed as a sealed instrument as of the Effective Date.
SELLERS:
MARRIOTT SENIOR LIVING SERVICES, INC.,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------------------------
Xxxxxxx X. Xxxxxxx
Authorized Signatory
VCS, INC., a Maryland corporation
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------------------------
Xxxxxxx X. Xxxxxxx
Authorized Signatory
MSLS-MAPLERIDGE, INC., a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------------------------
Xxxxxxx X. Xxxxxxx
Authorized Signatory
MI:
MARRIOTT INTERNATIONAL, INC.,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------------------------
Xxxxxxx X. Xxxxxxx
Authorized Signatory
PURCHASER:
---------
CNL RETIREMENT MA1, LP
By: CNL Retirement - GP/National Corp.,
a Delaware corporation,
Its sole general partner
By: /s/ Xxxxxxx X. Xxxx
--------------------------------------------
Xxxxxxx X. Xxxx
Vice President
TENANT:
------
HRA MANAGEMENT CORPORATION,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------------
Xxxxxxx X. Xxxxx
President
