PURCHASE AND SALE AGREEMENT
(Chelmsford, Massachusetts)
THIS PURCHASE AND SALE AGREEMENT ("Agreement"), dated as of the Execution Date
(as defined in the final paragraph of this Agreement), is made and entered into
by and between EMERITUS CORPORATION, a Washington corporation,or its permitted
assignees ("Purchaser") and LM CHELMSFORD ASSISTED LIVING, LLC, a Massachusetts
limited liability company ("Seller').
RECITALS
A. Seller is the owner of certain real property located in Chelmsford,
Massachusetts upon which Meadow Lodge at Drum Hill, an 80-unit assisted living
facility (the "Facility"), is located, as well as certain personal property
associated with the Facility.
B. Purchaser currently operates the Facility pursuant to that certain Lease
Agreement, dated as of July,1996, between Seller as Landlord and Purchaser as
Tenant (the "Lease").
C. Purchaser is interested in purchasing the real property and personal property
owned by Seller on the terms and conditions specified herein.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants of the parties set forth herein, IT IS HEREBY AGREED AS FOLLOWS:
AGREEMENT
1. PURCHASE AND SALE.
On the terms and conditions set forth herein, Seller shall sell to Purchaser and
Purchaser shall purchase from Seller, the following:
(a) Real Property and Facility. The real property situated in the State of
Massachusetts and consisting of approximately eight and one half (8.5 +/-)
acres, which is more particularly described in Exhibit A attached hereto and all
of the improvements; buildings, structures, fixtures, additions, enlargements,
extensions, and modifications thereon, including, without limitation, the
Facility (the "Real Property"), together, with all tenements, hereditaments,
rights, privileges, interests, easements and appurtenances now or hereafter
belonging or in any way pertaining to the Real Property or the Facility.
(b) Personal Property. All equipment, furniture, fxtures, inventory, appliances,
tools, instruments, and other tangible personal property owned by Seller as of
the date of this Agreement or acquired by Seller prior to the Closing Date and
located on the Real Property and/or used in connection with the operation of the
Facility (the "Personal Property").
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(c) Inventory. All inventories of every kind and nature whatsoever owned by
Seller as of the date of this Agreement or hereafter acquired, and relating to
the Facility, except inventory sold or consumed in the ordinary course of
business from and after the Execution Date (collectively, the "Inventory").
(d) Intangible Personal Property. All rights to the telephone numbers of the
Facility, medical records, administrative records, manuals and other books and
records relating to the operation of the Facility and located thereon (other
than Seller's corporate or financial books and records), lien waivers, surety
agreements, bonds, warranties, guaranties, utility use agreements, covenants,
commitments, permits, approvals, and other intangible personal property of every
kind and nature whatsoever owned by Seller as of the date of this Agreement or
hereafter acquired, which can be legally transferred and which relate directly
to the Facility, other than cash (on hand or in banks) and accounts, notes,
interest, and other receivables arising from the operation of the Facility prior
to the Closing Date (the "Intangible Personal Property").
Collectively, the Real Property, the Personal Property, the Inventory, and the
Intangible Personal Property are sometimes referred to herein as the "Property."
2. PURCHASE PRICE.
The purchase price ("Purchase Price") for the Property shall be an amount equal
to the sum of (i) Seven Million Four Hundred Eighty-Six Thousand Nine Hundred
Sixty and No/100 Dollars($7,486,960.00), plus (ii) an amount equal to the
interest charged to Seller on Six Million Eight Hundred Sixty-One Thousand Nine
Hundred Sixty and No/100 Dollars ($6,861,960.00) pursuant to that certain
Promissory Note, dated as of November 19,1996, made by Seller in favor of MSCPF
Assisted Living, Inc., for the period commencing on November 19,1998 and ending
on the Closing Date (as that term is defined below), plus (iii) the amount due
pursuant to that certain Promissory Note, dated as of January 15,1997, made by
Seller in favor of Purchaser in the original principal amount of Three Hundred
Thousand and No/100 Dollars ($300,000.00) (the "LM/Emeritus Note"). The Purchase
Price shall be payable as follows:
(a) Xxxxxxx Money Deposit.
(i) Within three (3) business days after the Execution Date, Purchaser shall
deposit Seventy-Five Thousand and No/100 Dollars ($75,000) (the "Initial Xxxxxxx
Money"), in the form of a corporate check, with Chicago Title Insurance Company,
75- 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attn: Xx. Xxxxx Xxxxx
("Escrow Agent"). The Initial Xxxxxxx Money shall be held in an interest bearing
account for the benefit of Purchaser, and shall be applied, together with any
interest accruing thereon, against the Purchase Price at Closing (as that term
is defined below) or remitted to Purchaser or Seller in accordance with the
provisions of Paragraphs 12 or 16, below.
(ii) Within one (1) business day after Purchaser approves or is deemed to
approve the results of its Due Diligence Review (as that term is defined below),
Purchaser shall deposit an additional Seventy-five Thousand and No/100 Dollars
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($75,000) with the Escrow Agent (the "Additional Xxxxxxx Money"). Upon such
deposit with Escrow Agent, the Additional Xxxxxxx Money shall be held in the
same interest bearing account for the benefit of Purchaser, and shall be
applied, together with any interest accruing thereon, against the Purchase Price
at Closing or remitted to Purchaser or Seller in accordance with the provisions
of Paragraphs 12 or 16, below.
(b) Balance of Purchase Price. If Closing occurs, the balance of the Purchase
Price to be paid in cash shall be paid at the time of Closing in immediately
available funds (including, without limitation, electronic wire transfer)
delivered to Escrow Agent.
3. CLOSING.
For the purposes of this Agreement, "Closing" shall mean the consummation of the
purchase and sale transaction contemplated by this Agreement. Provided that the
conditions to Closing set forth in Paragraphs 12 and 13 have been satisfied or
waived in writing by the party for whom the condition exists, Closing shall
occur on the date that is sixty (60) days following the date Purchaser approves
or is deemed to approve the results of its Due Diligence Review (as that term is
defined below) (the "Closing Date") at 10:00 a.m. (ET) at the offices of Escrow
Agent or at such other time and place as may be mutually agreed upon by Seller
and Purchaser; provided, however, Purchaser may extend the Closing Date by up to
two (2) consecutive periods of thirty (30) days each (each an "Extension
Period") by delivering notice of its election to extend the Closing Date by one
or more Extension Periods to Seller, on or before the then-scheduled Closing
Date, together with immediately available funds in the amount of Twenty-Five
Thousand and No/100 Dollars ($25,000) for each exercised Extension Period (each
an "Extension Fee"). Each Extension Fee shall be nonrefundable (except if
Closing does not occur due to Seller's failure, refusal, or inability to perform
its obligations on the Closing Date in accordance with the terms of this
Agreement, in which case any such Extension Fees paid by Purchaser shall be
promptly refunded to Purchaser) and shall not be credited against the Purchase
Price.
4. CONVEYANCES.
At Closing, Seller shall convey fee simple title to the Real Property to
Purchaser by quitclaim deed, and Seller shall convey all of Seller's right,
title, and interest in and to the Personal Property, the Inventory, and the
Intangible Personal Property by xxxx of sale and/or assignment of rights, all in
form and substance acceptable to Purchaser. Title to the Property so conveyed
shall be good, marketable, and free and clear of all liens or encumbrances other
than those approved or deemed approved by Purchaser pursuant to Paragraph 12,
below.
5. CLOSING COSTS AND PRORATIONS.
(a) At Closing, Seller and Purchaser shall be responsible for the following
costs and prorations:
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(i) Recording and Transfer Taxes. Seller and Purchaser shall eachpay an amount
equal to fifty percent (50%) of any state or county recording and transfer taxes
due and payable as a result of the sale of the Property, provided that Seller
alone shall pay any applicable transfer tax associated with that portion of the
Purchase Price equal to the amount due under the LM/Emeritus Note.
(ii) Attorney's Fees. Seller and Purchaser shall each pay their own attorneys
fees and costs, if any, associated with the preparation, negotiation, execution,
and closing of this Agreement.
(iii) Escrow Fees. Seller and Purchaser shall each pay an amount
equal to fifty percent (50%) of any escrow fees and other closing costs
associated with the Closing.
(iv) Real Property Taxes. Real property taxes and assessments with respect to
the Real Property shall be prorated as of the Closing Date, with Seller
responsible for any such taxes and assessments which relate to the period prior
to the Closing Date, regardless of when payment therefor is due and with
Purchaser responsible for any such taxes and assessments which relate to the
period from and after the Closing Date.
(v) Title Insurance and Survey. Purchaser shall pay the cost of the premium
for the Title Policy (as that term is defined below), and the cost of obtaining
the Updated Survey (as that term is defined below).
(b) In the event any prorations between the parties at the time of Closing are
made on the basis of incomplete, incorrect, estimated or preliminary information
then, as a matter which shall survive the Closing for a period of one hundred
eighty (180) days after the Closing Date, the parties agree to re-adjust and
re-apportion such costs following the Closing promptly upon receipt of complete,
correct or final information, which is verified by both parties.
6. POSSESSION.
At Closing, Purchaser shall be entitled to possession of the Real Property free
and clear of all tenancies, liens and encumbrances other than: (i) residential
lease or other occupancy agreements between Purchaser and the residents of the
Facility, (ii) the Lease (provided, that as of Closing, Seller and Purchaser
hereby acknowledge and agree that the Lease shall automatically be terminated);
and (iii) those approved by Purchaser pursuant to Paragraph 12, below.
7. REPRESENTATIONS AND WARRANTIES OF SELLER.
Seller does hereby represent and warrant to Purchaser as follows:
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(a) Status. Seller is a limited liability company duly organized and validly
existing under the laws of the State of Massachusetts and is in good standing
thereunder.
(b) Authority. Seller has full power and authority to enter into this Agreement
and to carry out the terms hereof and the consummation of the transaction
provided for herein does not violate Seller's limited liability agreement or
operating agreement nor any law, regulation, court order, mortgage, deed of
trust, note, bond, indenture, agreement, license or other instrument or
obligation to which Seller is a party or by which its assets may be bound or
affected. This Agreement is valid, binding and enforceable against Seller in
accordance with its terms, except as such enforceability may be affected by
bankruptcy, receivership or creditors rights laws generally.
(c) Title. Seller has good fee simple and marketable title to the Real Property,
which title as of the Closing Date, will be free and clear of all liens and
encumbrances other than: (i) residential lease or other occupancy agreements
between Purchaser and the residents of the Facility, (ii) the Lease (provided,
that as of Closing, Seller and Purchaser hereby acknowledge and agree that the
Lease shall automatically be terminated); and (iii) those approved by Purchaser
pursuant to Xxxxxxxxx 00, xxxxx.
(x) Taxes and Tax Returns. All tax returns and related filings of any kind
required to be filed by Seller prior to the Closing Date with respect to its
ownership of the Real Property have been properly completed and timely filed in
material compliance with all applicable requirements and all taxes or other
obligations which are due and payable by Seller have been, or as of the Closing
Date, will be timely paid.
(e) Litigation. To the best of Seller's knowledge, and except as threatened by
MSCPF Assisted Living, Inc., there is no litigation, investigation or other
proceeding pending or threatened against or relating to Seller, its properties
or business which is material to this Agreement, or which would prevent Seller
from performing its obligations hereunder.
(f) Environmental Matters. Seller has not released into the environment, or
discharged, placed or disposed of any such hazardous materials, substances or
wastes or caused the same to be so released into the environment or discharged,
placed or disposed of at, on or under the Real Property.
(g) Special Assessments. Seller has received no notice and has no
knowledge of any pending special assessments to be made against the Real
Property by any governmental authority.
(h) Tenancies. As of the date of this Agreement, none of the Real Property is
under lease to any person, firm, or entity other than Purchaser and residents of
the Facility pursuant to agreements with Purchaser, and no oral or written
agreements have been entered into by Seller which commit to lease all or any
portion of the Real Property subsequent to the date of this Agreement. To the
best of Seller's knowledge, there is no adverse possession of all or any part of
the Real Property.
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(i) Mechanic's Liens. There are no unpaid bills or claims in connection with any
construction or other work performed on the Real Property by or on behalf of
Seller nor shall there be any on the Closing Date. Seller shall satisfy any and
all mechanic's or materialmen's liens filed against the Real Property, or any
part thereof, on or prior to Closing with respect to any work performed or
contracted for by or on behalf of Seller, and shall indemnify and hold harmless
and protect Purchaser from any and all loss from any such liens.
(j) Zoning. The Real Property is located in an industrial district within the
town limits of the Town of Chelmsford, Massachusetts ("Chelmsford"). While
"assisted living facility" is neither a use permitted as of right nor a
prohibited uses under the applicable Chelmsford zoning bylaw, the applicable
Chelmsford zoning bylaw provides that a "use not listed" may be permitted by
special permit from the Chelmsford Zoning Board of Appeals (the "ZBA"). The ZBA
issued such a special permit on September 30, 1995. The Chelmsford Planning
Board also issued a Certificate of Decision, dated January 12,1996, granting a
Special Permit under each of Section 1420, Site Plan Review, Section 3113,
Parking Xxx Xxxxxxxxxxxx, Xxxxxxx 0000, Xxxxx Xxxxxxxx Xxxxxxx, and Section
4800, Aquifer Protection District. The Certificate of Decision was modified on
February 14,1996, to correct clerical errors. The Site Plan Approval was further
modified by the Chelmsford Planning Board in a decision dated March 13,1997,
which decision was amended to correct clerical errors on April 11,1997. Seller
has not received any notice of, nor become aware of, any proposed change or
modification regarding such zoning designation.
(k) Disclosure. No representation or warranty by Seller contained in this
Agreement and no statement contained in any certificate, list, exhibit, or other
instrument furnished or to be furnished by Seller to Purchaser pursuant hereto
contains or will contain any untrue statement of a material fact, or
intentionally omits or will omit to state any material fact which is necessary
in order to make the statements contained herein or therein not misleading.
(l) Condition of Property. The parties acknowledge and agree that based upon
Purchaser's current occupancy of and familiarity with the Property, Purchaser's
due diligence relating to the Property, and Purchaser's experience and knowledge
as to the market in which the Facility is located and as to investment in and
operation of real estate in the nature of the Facility and commercial real
estate in general, Purchaser shall purchase the Property on the Closing Date, if
at all, in its AS IS, WHERE IS, AND WITH ALL FAULTS" condition, without any
representation or warranty whatsoever, except as expressly set forth in this
Agreement or in any other documents provided by Seller to Purchaser pursuant to
this Agreement (e.g., the notice of delivery described in Exhibit B, hereto).
The parties further agree that references to Seller's "knowledge" in this
Agreement shall be deemed to mean the actual knowledge of Xxxx X. Xxxxxxxx and
Xxxxxx Real after review by either of them of Seller's existing files relating
to the Property.
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8. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
Purchaser does hereby represent and warrant to Seller as follows:
(a) Status. Purchaser is a corporation duly organized and validly existing under
the laws of the State of Washington and is in good standing thereunder.
(b) Authority. Purchaser has full power and authority to execute and to deliver
this Agreement and all related documents, and to carry out the transactions
contemplated herein and the same do not result in a breach of the terms and
conditions of nor constitute a default under or violation of Purchaser's
Articles of incorporation or By-laws or any law, regulations, court order,
mortgage, note, bond, indenture, agreement, license or other instrument or
obligation to which Purchaser is a party or by which Purchaser or any of its
assets may be bound or affected. This Agreement is valid, binding and
enforceable as against Purchaser in accordance with its terms, except as such
enforceability may be affected by bankruptcy, receivership or creditors' rights
laws generally.
(c) Litigation. There is no litigation, investigation or other proceeding
pending or threatened against or relating to Purchaser, its properties or
business which is material to this Agreement, or which would prevent Purchaser
from performing its obligations hereunder.
(d) Disclosure. No representation or warranty by Purchaser contained in this
Agreement and no statement contained in any certificate, list, exhibit, or other
instrument furnished or to be furnished by Purchaser to Seller pursuant hereto
contains or will contain any untrue statement of a material fact, or
intentionally omits or will omit to state any material fact which is necessary
in order to make the statements contained herein or therein not misleading.
(e) Environmental Matters. Purchaser has not released into the environment, or
discharged, placed or disposed of any such hazardous materials, substances or
wastes or caused the same to be so released into the environment or discharged,
placed or disposed of at, on or under the Real Property.
(f) Mechanic's Liens. There are no unpaid bills or claims in connection with any
construction or other work performed on the Real Property by or on behalf of
Purchaser nor shall there be any on the Closing Date. Purchaser shall satisfy
any and all mechanic's or materialmen's liens filed against the Real Property,
or any part thereof, on or prior to Closing with respect to any work performed
or contracted for by or on - behalf of Purchaser, and shall indemnify and hold
harmless and protect Seller from any and all loss from any such liens.
9. COVENANTS OF SELLER.
Seller does hereby covenant and agree as follows:
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(a) Pre-Closing. Seller shall, at Seller's sole cost and expense:
(i) as soon as practicable, but in no event later than five (5) days
following the Execution Date, provide to Purchaser: (a) legible copies, to the
extent the same are in Seller's possession or reasonable control of (1) all
permits, licenses, and other governmental approvals and entitlements relating to
the use and/or development of the Real Property (other than those obtained by
Purchaser as "tenant" under the Lease) and (2) all reports, studies and
investigations performed at, or relating to, the Real Property, including,
without limitation, all architectural drawings, plans and specifications,
environmental reports, structural reports and geological reports, existing
surveys of the Real Property, title reports and title policies, wetland reports,
soils reports, engineering tests and reports prepared for the Real Property
(collectively, the "Property Documents"); and (b) notice, in substantially the
form and substance of Exhibit B attached hereto, that the Property Documents so
provided, if any, constitute all of the Property Documents in Seller's
possession or reasonable control.
(ii) as soon as practicable, but in no event later than five (5) days
following the Execution Date, provide to Purchaser, with a copy to Purchaser's
counsel, a full and complete accounting of all cash, bank accounts, and other
cash equivalents associated with Seller's ownership and operation of the
Property (the "Accounting").
(iii) as soon as practicable, but in no event later than the Closing Date,
satisfy and discharge all liens against the Property, other than those approved
by Purchaser pursuant to Paragraph 12, below.
(iv) as soon as practicable, but in no event later than the Closing Date,
complete, or otherwise resolve to Purchaser's satisfaction, and pay for, each
and every outstanding construction issue or matter described on the attached
Exhibit C, and deliver to Purchaser and Title Company appropriate lien waivers
and releases with respect thereto.
(v) file all tax returns, reports and flings required to be filed by Seller
and timely pay all taxes or other obligations which are due and payable with
respect to the Property.
(vi) not take any action inconsistent with its obligations hereunder.
(b) Closing. On the Closing Date, Seller agrees to:
(i) Execute and deliver to Purchaser the quitclaim deed and xxxx of sale
and/or assignment of rights described in Paragraph 4 and such other instruments
as shall be necessary to transfer the Property to Purchaser, including but not
limited to an affdavit of Non-Foreign Status pursuant to Section 1445 of the
Internal Revenue Code of 1986, as amended;
(ii) Pay any Closing costs for which it is responsible under Paragraph 5;
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(iii) Designate an individual, who is employed by an affliate of Seller, to
be available to Purchaser to attempt to respond to Purchaser's questions about
the Property arising after the Closing, or to review existing files regarding
the Property to provide Purchaser with additional information about the
Property.
(c) Post-Closing. After the Closing Date, Seller agrees that:
(i) Seller will take such actions and properly execute and deliver to
Purchaser such further instruments as may be reasonably necessary to evidence
the transfer of the Property; and
(ii) Seller will, at no expense to Seller, cooperate with Purchaser in any
efforts which Purchaser may undertake to audit Seller's financial statements
with respect to the Facility for the periods prior to the Closing if and to the
extent such an audit is required for Purchaser's compliance with applicable
security laws.
10. COVENANTS OF PURCHASER.
Purchaser does hereby covenant and agree as follows:
(a) Pre-Closing. Between the date hereof and the Closing Date, Purchaser will
not take any action inconsistent with its obligations hereunder.
(b) Closing. On the Closing Date, Purchaser agrees to:
(i) deliver the balance of the Purchase Price due in cash at Closing together
with its share of the Closing costs as herein provided; and
(ii) deliver to Escrow Agent the LM/Emeritus Note, with instructions to Escrow
Agent to xxxx the LM/Emeritus Note "cancelled and paid-in-full" and deliver such
cancelled and LM/Emeritus Note to Seller if Closing otherwise occurs as required
by this Agreement. The amount of the indebtedness paid by Purchaser on behalf of
Seller pursuant to this Paragraph 10(b)(ii) shall be part of, and shall be
credited against, the Purchase Price. Any income or other taxes associated with
such payment and cancellation shall be the sole obligation of Seller.
11. MUTUAL COVENANTS.
Seller and Purchaser mutually covenant and agree as follows:
(a) Fulfillment of Conditions. If any event should occur, either within or
without the knowledge or control of either party, which would prevent
fulfillment of the conditions to Closing provided for herein, to use his, its or
their reasonable efforts to cure the same as expeditiously as possible;
(b) Third-Party Consents. To cooperate fully with each other in taking any
actions which are or may be necessary to obtain the consent of any government
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instrumentality or any third party, including without limitation, the issuance
of all necessary "Governmental Approvals" (as that term is defined below), and
to otherwise accomplish the transaction contemplated by this Agreement; and
(c) Escrow Instructions. To execute and deliver written instructions to Escrow
Agent if necessary or desirable to complete the purchase and sale of the
Property.
12. PURCHASER'S CONDITIONS TO CLOSING.
The obligation of Purchaser to acquire the Property shall be subject to the
satisfaction by Seller or to the waiver by Purchaser of the following
conditions:
(a) Seller's Representations and Warranties. Seller's representations and
warranties set forth herein shall be true in all material respects at and as of
the Closing Date as are those made as of the date thereof.
(b) Seller's Performance. Seller shall have performed all of its obligations
hereunder which are required to be performed as of the Closing Date.
(c) Updated Title Commitment. As soon as possible after Purchaser's receipt of
all of the Property Documents from Seller, as provided in Paragraph 9(a)(i),
above, Purchaser, at Purchaser's sole cost and expense, shall cause Chicago
Title Insurance Company, or such other title insurance company acceptable to
Purchaser (the "Title Company") to issue a commitment for title insurance
(including copies of all exception documents referenced in said commitment) in
an amount equal to the Purchase Price, which commitment shall provide for the
issuance of a final title policy as of the Closing Date, subject to no liens or
encumbrances, other than those which may be approved by Purchaser (the "Title
Commitment") as part of its Due Diligence Review (as that term is defined
below); provided, however, that Purchaser shall not be entitled to object to any
title encumbrance noted on Purchaser's current leasehold title policy with
respect to the Real Property.
(d) Updated Survey. As soon as possible after Purchaser's receipt of all of the
Property Documents from Seller, as provided in Paragraph 9(a)(i), above,
Purchaser, at Purchaser's sole cost and-expense, shall cause a surveyor
acceptable to Purchaser to provide an as-built survey of the Real Property
(provided, however, Purchaser may, in Purchaser's sole discretion, cause any
surveyor who had prepared any survey delivered to Purchaser to update any such
survey) and Purchaser shall review such survey as part of its Due Diligence
Review.
(e) Title Policy. The Title Company shall be irrevocably committed to issue to
Purchaser, at Purchaser's sole cost and expense, an ALTA Extended Owner's Policy
of Title Insurance for the Real Property (the "Title Policy"), effective as of
the Closing Date, which Title Policy shall have a policy amount of not less than
the amount of the Purchase Price and be in a form acceptable to, and include
such endorsements, affirmative coverages, and other modifications required by,
Purchaser and Purchaser's lender (including any REIT, as defined in Paragraph
20, below). Without limiting the
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generality of the foregoing, such Title Policy shall be subject to no exceptions
other than those of the usual printed exceptions which are acceptable to
Purchaser (the survey exception, parties in possession and mechanics lien
exceptions being specifically unacceptable to Purchaser) and those exceptions to
which Purchaser has approved as part of its Due Diligence Review.
(f) Due Diligence Review. Purchaser shall conduct, at its sole cost and expense
an intensive due diligence review of the Property (the "Due Diligence Review"),
which review shall include, but not be limited to: (i) reviewing and approving
all Property Documents required to be provided to Purchaser by Seller; (ii)
reviewing and approving the Accounting; (iii) reviewing and approving the Title
Commitment; (iv) reviewing and approving the Updated Survey; and (v) conducting
such engineering and soils studies, environmental assessments, utilities
investigations, wetlands investigations, if applicable, and regulatory reviews,
as Purchaser deems appropriate with respect to the Facility. With respect to any
physical testing on the Real Property, Purchaser, to the extent practicable,
shall restore the Real Property to its condition immediately prior to such
physical testing, and shall indemnify Seller for any damage to persons or
property caused by any such physical testing.
(i) Within thirty (30) days following the date Purchaser receives the
Property Documents, the notice described in Paragraph 9(a)(i), and the
Accounting described in Paragraph 9(a)(ii) (the "Due Diligence Period"),
Purchaser shall approve or disapprove the results of said Due Diligence Review.
If Purchaser notifies Seller that it disapproves the results of its Due
Diligence Review, this Agreement shall terminate and Escrow Agent shall
immediately remit the Initial Xxxxxxx Money to Purchaser upon Purchaser's
unilateral demand therefor, and upon such remission by Escrow Agent, the parties
shall have no further rights or obligations under this Agreement (other than the
indemnity obligations set forth in this Section 12(f)).
(ii) If Purchaser notifies Seller that it approves the results of its Due
Diligence Review or if Purchaser fails to notify Seller of Purchaser's approval
or disapproval regarding the Due Diligence Review prior to the expiration of the
Due Diligence Period (in which case Purchaser shall be conclusively deemed to
have approved the results of such Due Diligence Review), Purchaser shall, within
one (1) business day after the date of its approval notice to Seller or the date
of its deemed approval, deliver the Additional Xxxxxxx Money to Escrow Agent,
and after so deposited with Escrow Agent, such Initial Xxxxxxx Money and
Supplemental Xxxxxxx Money (collectively, the "Xxxxxxx Money") shall become
nonrefundable to Purchaser such that if Closing does not occur for any reason
other than Seller's failure, refusal, or inability to perform its obligations on
the Closing Date in accordance with the terms of this Agreement (in which event
the Xxxxxxx Money shall be promptly remitted to Purchaser), the Xxxxxxx Money
shall be remitted to Seller.
(iii) If Purchaser notifies Seller that it disapproves the results of its Due
Diligence Review, but such notice indicates such disapproval is based upon
specific matters that Purchaser believes are correctable by Seller and the form
of correction that
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would be acceptable to Purchaser, Seller may, at Seller's sole option and within
ten (10) days after receipt of Purchaser's disapproval notice, elect to correct
such specific matters in the manner requested by Purchaser at Seller's sole cost
and expense, or to refuse to correct such matters. If Seller elects, in writing,
to correct all such matters in the form acceptable to Purchaser, Purchaser shall
be deemed to have approved the results of its Due Diligence Review as of the
date of Purchaser's receipt of Seller's written election, and then Purchaser
shall proceed in accordance with Paragraph 12(f)(ii), above.
(iv) Seller agrees to cooperate, at no cost to Seller, with Purchaser and/or
its agents, consultants, and contractors in performing such tests, studies,
assessments, and investigations as Purchaser determines necessary in connection
with its Due Diligence Review of the Property and grants, to the extent
necessary, rights to Purchaser and/or its agents, consultants, and contractors
to enter onto the Real Property in connection therewith, provided that such
agents, consultants and contractors shall each maintain commercial general
liability insurance in an amount equal to or greater than $1,000,000 per
occurrence and in the aggregate.
13. SELLER'S CONDITIONS TO CLOSING.
The obligation of Seller to convey the Property to Purchaser shall be subject to
the satisfaction by Purchaser or the waiver by Seller of the following
conditions:
(a) Purchaser's Representations and Warranties. Purchaser's representations
and warranties set forth herein shall be true at and as of the- Closing Date.
(b) Purchaser's Performance. Purchaser shall have performed all of its
obligations hereunder which are required to be performed as of the Closing Date
(including, without limitation, delivery of the LM/Emeritus Note to Escrow Agent
with the instructions described in this Agreement).
14. INDEMNIFICATION BY SELLER.
Subject to the limitations set forth in Paragraph 16, Seller shall indemnify,
defend and hold Purchaser harmless from and against:
(a) Obligations Existing as of Closing Date. Any and all obligations relating to
Seller's ownership of the Property which exist as of the Closing Date, except to
the extent that such obligations relate to a breach by Seller of a
representation, warranty or covenant set forth in this Agreement, in which case
Seller's obligation to indemnity, defend and hold harmless Purchaser shall be as
set forth in Paragraph 14(b). For purposes of this Paragraph 14(a), an
obligation shall be deemed to "exist" as of the Closing Date if it relates to
events which occurred prior to the Closing Date even if it is not asserted until
after the Closing Date.
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(b) Breach of Representations and Warranties. Any and all damage, loss, or
liability resulting from any material breach of any representation, warranty or
covenant made by Seller in this Agreement or nonfulfillment of any agreement on
the part of Seller under this Agreement or from any misrepresentation in or
omission from any certificate furnished or to be furnished to Purchaser
hereunder;
(c) Fees and Expenses. Any and all actions, suits, proceedings, demands,
assessments, judgments, costs and legal and other expenses, including, but not
limited to, reasonable attorneys' fees, incident to any of the foregoing.
15. INDEMNIFICATION BY PURCHASER.
Subject to the limitations set forth in Xxxxxxxxx 00, Xxxxxxxxx shall indemnify,
defend and hold Seller harmless from and against:
(a) Obligations Accruing After the Closing Date. Any and all obligations
relating to the ownership of the Property accruing on or after the Closing
Date;
(b) Breach of Representations and Warranties. Any and all damage, loss or
liability resulting from a material breach of any representation, warranty or
covenant of Purchaser in this Agreement or nonfulfillment of any agreement on
the part of Purchaser under this Agreement (including any failure to repair or
restore the Real Property after any physical testing undertaken pursuant to
Paragraph 12(in accordance therewith) damage or any or from any
misrepresentation in or omission from any certificate furnished or to be
furnished to Seller hereunder; and
(c) Fees and Expenses. Any and all actions, suits, proceedings, demands,
assessments, judgments, costs and legal and other expenses, including, but not
limited to, reasonable attorneys' fees, incident to any of the foregoing.
16. TERMINATION.
(a) Termination by Parties. This Agreement may be terminated and the transaction
contemplated herein abandoned at any time prior to Closing:
(i) By mutual agreement of the parties;
(ii) By Seller, if any of the conditions set forth in Paragraph 13 shall have
become incapable of fulfillment prior to the Closing Date or such earlier date
as may be specifically provided for the performance thereof (as the same may be
extended) through no fault of Seller and the same shall not have been waived by
Seller;
(iii) By Purchaser, if any of the conditions set forth in Paragraph 12 shall
have become incapable of fulfillment prior to the Closing Date or such earlier
date as may be specifically provided for the performance thereof (as the same
may be extended) through no fault of Purchaser and the same shall not have been
waived by Purchaser;
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(iv) By either Seller or Purchaser in the event of a material breach by the
other party of its obligations hereunder; or
(v) If the Closing has not occurred on or before August 15,1999.
(b) Material Damage or Destruction. In the event that prior to the Closing Date,
a material portion of the Real Property shall have been damaged or destroyed or
shall have been taken or condemned by any public or quasi-public authority under
the power of eminent domain, Purchaser shall have the right to terminate this
Agreement on written notice to Seller which notice must be delivered within ten
(10) days after Purchaser receives notice of such damage, destruction or
condemnation. In the event Purchaser fails to exercise its termination rights
hereunder, then it shall be conclusively deemed to have waived said right and
Seller shall assign to Purchaser all of its rights to any insurance proceeds or
condemnation award and all claims in the connection therewith. In the event
Purchaser exercises its termination rights hereunder, the parties shall have no
further rights or obligations hereunder other than Purchaser's right to the
return of its Xxxxxxx Money.
(c) Notice. Neither party to this Agreement may claim termination or pursue any
other remedy referred to in Paragraph 16(a) above, on account of a breach of a
condition, covenant or warranty by the other, without first giving such other
party notice of such breach and not less than ten (10) days within which to cure
such breach. The Closing Date shall be postponed, if necessary, to afford such
opportunity to cure.
(d) Seller's Liquidated Damages. In the event of the termination of this
Agreement by Seller as a result of a material breach by Purchaser of its
obligations hereunder, Seller's sole remedy shall be to terminate this Agreement
and to retain the Initial Xxxxxxx Money, and if deposited with Escrow Agent, the
Additional Xxxxxxx Money as full and complete liquidated damages, the parties
acknowledging and agreeing that the amount of damages which Seller may incur as
a result of such termination may be difficult to ascertain and that the amount
of such Xxxxxxx Money is a reasonable and fair estimate thereof, after which the
parties shall have no further rights or obligations hereunder.
(e) Purchaser's Remedies. In the event of the termination of this Agreement by
Purchaser as a result of a material breach by Seller of its obligations
hereunder, Purchaser shall have the right either to (i) terminate this Agreement
and receive a full refund of its Xxxxxxx Money, after which neither party shall
have any further rights or obligations hereunder (other than the indemnification
obligations pursuant to Paragraph 12(f), above) or (ii) seek specific
performance of Seller's obligations hereunder or and/or direct (but not
incidental or consequential) damages for Seller's breach of its obligations
hereunder. In the event of the termination of this Agreement by Purchaser as a
result of a failure of any of the Purchaser's conditions as set forth in
Paragraph 12, above, Purchaser shall be entitled to a full refund of its any
Xxxxxxx Money deposited with Escrow Agent.
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17. BROKER.
Neither party has been represented by a broker or finder in connection with the
purchase and sale contemplated by this Agreement and each party agrees to
indemnify the other party against any claim for any commission made by any
broker or finder allegedly employed by it.
18. NOTICES.
Any notice, approval, consent, waiver, request, or other communication to be
given by any party hereunder shall be in writing and shall be sent by: (a)
United States Postal Service, registered or certified mail, return receipt
requested, with postage prepaid; (b) nationally recognized overnight courier
service guaranteeing overnight delivery; or (c) facsimile transmission (if
confirmed orally or in writing by mail as aforesaid), to the following address:
To Seller: LM Chelmsford Assisted Living, LLC
c/o LMP Retirement Properties, Inc.
00 Xxxx Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxx Xxxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
With copies to: Xxxxxxx Xxxxxxx & Xxxx XXX
Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxxxx XxXxxxxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
and Xxxxxx & Xxxxxx LLP
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxx Xxxxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
To Purchaser: Emeritus Corporation
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
Attention: President
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
With a copy to: Xxxxxx & Xxxxx LLP/Xxxxxxx WilliamsP.S.
0000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 0000
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Seattle, Washington 98154-1065
Attention: Xxxxxxx X. Xxxxxx. Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Notice shall be deemed given: (a) three (3) business days after deposit with the
United States Postal Service; (b) on the next business day if sent by nationally
recognized overnight courier; and (c) on receipt if sent by facsimile and
received at or before 4:30 p.m. local time (and confirmed orally or by mail as
aforesaid).
19. ENTIRE AGREEMENT/AMENDMENT AND MODIFICATION.
This Agreement may not be amended or modified in any respect whatsoever except
by instrument in writing signed by the parties hereto. This Agreement
constitutes the entire agreement between the parties hereto and supersedes all
prior negotiations, discussions, writings and agreements between them including
without limitation, all prior letters of intent, but specifically excluding the
LM/Emeritus Note and the Lease.
20. ASSIGNMENT.
Purchaser shall have the right to assign its rights and delegate its obligations
hereunder, without the prior written consent of Seller, to an affiliate of
Purchaser. In the event of any such assignment, all of the references to
Purchaser herein shall be deemed to be references to Purchaser's assignee, the
representations set forth in Paragraph 8 shall be revised accordingly and the
terms of this Agreement shall be binding upon and inure to the benefit of and be
enforceable by and against said assignee. Purchaser shall also have the right,
on notice to Seller, to assign its rights hereunder to a financing institution
or REIT in connection with its financing of the transaction provided for herein,
it being understood and agreed that in the event of such an assignment to a
financing institution or REIT, the only right which the financing institution or
REIT will assume is Purchaser's right to take title to the Property and the only
obligation which the REIT will assume is Purchaser's obligation to pay the
Purchase Price in accordance with the terms hereof and that, in any event,
Purchaser shall not be relieved of any of its obligations hereunder in the event
of such an assignment to a REIT. Purchaser shall not otherwise assign its rights
under this Agreement without the prior written consent of Seller, which consent
shall not be unreasonably withheld, conditioned, or delayed.
21. WAIVER.
The waiver by any party of any breach of any of the provisions of this Agreement
shall not constitute a continuing waiver or a waiver of any subsequent breach of
any provision of this Agreement.
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22. INCORPORATION BY REFERENCE.
Each recital set forth and exhibit referenced in this Agreement is incorporated
and becomes an integral part of this Agreement.
23. CAPTIONS.
The captions of this Agreement are for convenience of reference only and shall
not define or limit any of the terms or provisions hereof.
24. SURVIVAL.
The provisions of this Agreement shall survive the Closing for a period of
twelve (12) months from the Execution Date. Purchaser agrees that other than
providing notice to Seller (which notice shall toll such twelve month period,
but such tolling shall only apply to the claim which is the subject of such
notice), Purchaser shall not proceed against Seller with respect to any claim
unless Purchaser shall have first made such claim against any applicable and
outstanding warranty or guaranty or against any title insurance (to the extent
appropriate) and Purchaser has proceeded in good faith to maximize such claim
but coverage for such claim has been denied or is inadequate to fully cover such
claim. In no event shall the aggregate liability of Seller to Purchaser with
respect to any representation or warranty indemnification obligation under this
Agreement exceed Two Hundred Thousand and No/100 Dollars ($200,000.00).
25. ATTORNEYS' FEES.
If any litigation or other proceedings are commenced between parties to this
Agreement regarding the rights and duties of any party pursuant to, related to
or arising from this Agreement, then the prevailing party with respect to the
litigation or other proceedings, shall be entitled, in addition to the relief
granted, a reasonable sum for attorneys' fees and costs of the litigation or
other proceedings.
26. GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with the laws of
the State of Massachusetts.
27. SEVERABILITY.
Should any one or more of the provisions of this Agreement be determined to be
invalid, unlawful or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions hereof shall not in any way be
affected or impaired thereby.
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28. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of which
shall be an original; but such counterparts shall together constitute but one
and the same instrument.
29. TIME OF THE ESSENCE, DATES.
Time is of the essence. If this Agreement calls for, or establishes, a day or
date on which an event occurs, or by which an action must be taken, and such day
or date falls on a Saturday, Sunday or legal holiday (defined to be any day on
which the United States Postal Service does not deliver regular mail), such day
or date shall be, for the purposes of this Agreement, the next day thereafter
that is not a Saturday, Sunday or legal holiday.
30. AUTOMATIC TERMINATION OF LEASE
If Closing occurs, the Lease shall be, and shall be deemed to be, automatically
terminated as of the Closing Date, with no further action required by any party
thereto.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set
forth opposite each party's signature below and the last date of execution shall
be deemed the Execution Date as such term is used in this Agreement.
Purchaser: EMERITUS CORPORATION,
a Washington Corporation
Dated : 4/23/99 By: /s/ Xxxxx X. Xxxxx
Its: Chief Financial Officer
Seller: LM CHELMSFORD ASSISTED
LIVING, LLC
a Massachusetts limited
liability company
Dated: 2/18/99 By: /s/ Xxxx Xxxxxxxx
Chicago Title Insurance Company, Escrow Agent under the foregoing Purchase and
Sale Agreement, hereby consents to its designation as Escrow Agent, and hereby
covenants and agrees to fulfill the obligations of Escrow Agent contained
therein.
Escrow Agent: Chicago Title Insurance
Company
Dated: 2/28/99 By: /s/ Xxxxx Xxxxxx
Its: Escrow Officer
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EXHIBIT A
DESCRIPTION OF REAL PROPERTY
291 /70131.04
021299/1219/49449.00002
