PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is entered into
effective as of June 30, 1998, by and BROOKDALE LIVING COMMUNITIES OF NORTH
CAROLINA, INC., a Delaware corporation ("Seller"), and AH NORTH CAROLINA OWNER
LIMITED PARTNERSHIP, an Ohio limited partnership ("Purchaser"). Any and all
capitalized terms used herein and not otherwise defined shall have the meanings
assigned to such terms in the Development Agreement (as such term is defined
below).
W I T N E S S E T H:
WHEREAS, Seller owns that certain land located in Raleigh, North
Carolina consisting of approximately 8.25 acres and legally described on Exhibit
A attached hereto, together with all improvements thereon (such land and
improvements shall hereinafter together be referred to as the "Land");
WHEREAS, Seller desires to sell all of its interests in and to the
Property (as hereinafter defined) to Purchaser;
WHEREAS, Purchaser desires to purchase the Property from Seller in
accordance with the terms and provisions described in this Agreement;
WHEREAS, there is currently being constructed on the Land a senior
independent and assisted living facility (the "Facility") to consist of
approximately 219 units, which Facility is being constructed pursuant to that
certain letter of intent to enter into a Construction Contract dated April 27,
1998 (together with the Construction Contract entered into pursuant to such
letter of intent, the "Construction Contract"), between Seller, as owner, and
XxXxxxxx Street Bovis, Inc.(the "Contractor") and pursuant to the plans and
specifications for the Facility prepared by Xxxxxx XxXxxxxx and Associates, Ltd.
and incorporated by reference in the Construction Contract;
WHEREAS, concurrent with the execution and delivery hereof, Seller and
Purchaser are executing and delivering that certain Development Agreement (the
"Development Agreement") pursuant to which Seller agrees to continue the
construction and development of the Facility (which have heretofore been
conducted by Brookdale Living Communities, Inc. ("BLCI")) upon the terms set
forth in the Development Agreement; and
WHEREAS, the parties now desire to enter into this Agreement to provide
for the sale by Seller of its interests in the Property to Purchaser, all on the
terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual agreements contained
herein and for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Purchaser and Seller do hereby agree as follows:
1. The Property. For purposes of this Agreement, the term "Property"
shall mean any and all interests of Seller in the following items subject to the
Permitted Exceptions (as hereinafter defined): (i) the Land, (ii) all personal
property and other tangible property now or hereafter located on the Land or
used in connection with the construction, development, operation or maintenance
of the Land, including, but not limited to, fixtures and equipment, other than
personal property and other tangible property necessary or appropriate for
Seller to retain in order to perform its obligations under the Development
Agreement, and (iii) all intangible property now or hereafter used in connection
with the operation or maintenance of the Land, including, but not limited to,
contracts, agreements, guaranties, plans and specifications, licenses, books and
records and all other items and instruments pertaining to the Land except as
described in the Development Agreement and other than intangible property
necessary or appropriate for Seller to retain in order to perform its
obligations under the Development Agreement. "Permitted Exceptions" shall mean
(i) those exceptions listed on Exhibit B attached hereto, (ii) Seller's rights
to reacquire the Property pursuant to Section 8 of this Agreement and (iii) any
rights or interests of any contractors or subcontractors for work done on the
Land that has not been fully paid for as of the Closing. Purchaser acknowledges
that Seller has commenced construction of certain improvements on the Land which
have not been fully paid for as of the date of this Agreement.
2. Purchase and Sale of Property. On the terms and subject to the
conditions set forth in this Agreement, Seller hereby agrees to convey, transfer
and assign to Purchaser, on the Closing Date (as defined in Section 3 below),
Seller's entire right, title and interests in and to the Property for an
aggregate amount equal to Two Million Nine Hundred Two Thousand Seven Hundred
Seventy-six and .97/100 Dollars ($2,902,776.97) (the "Purchase Price"). The
Purchase Price shall be paid to Seller as follows: (a) on the Closing Date
Purchaser shall pay Seller the sum (the "Cash Portion") of One Million and
no/100 Dollars ($1,000,000), which Cash Portion shall be paid by wire transfer
of immediately available funds to an account designated by Seller, and (b) on
the Closing Date, Purchaser shall deliver to Seller a promissory note (the
"Note") substantially in the form of Exhibit C attached hereto, payable to the
order of Seller in the original principal amount of One Million Nine Hundred Two
Thousand Seven Hundred Seventy-six and .97/100 Dollars ($1,902,776.97). The
repayment of the Note and the obligations of Purchaser under this Agreement and
the Development Agreement shall be guarantied (a) by AH North Carolina
Subordinated, LLC ("AH Subordinated"), an Ohio limited liability company and the
owner of a ninety-nine percent (99%) limited partnership interest in Purchaser
and the owner of all of the issued and outstanding stock of AH North Carolina
CGP, Inc. ("AH CGP"), an Ohio corporation and the owner of a one percent (1%)
general partnership interest in Purchaser, and (b) by AH CGP, in each case
pursuant to a non-recourse Guaranty (the "Guaranty"), with all of the
obligations of AH Subordinated and AH CGP under the Guaranty being secured by a
pledge of all of the interests in Purchaser held by AH Subordinated and AH CGP.
Except as expressly contained herein, Seller shall be solely responsible for all
closing costs in connection with the transaction contemplated by this Agreement
(the "Closing Costs"). In addition to the Purchase Price, Purchaser shall assume
and agrees to pay, in accordance with the terms of the Development Agreement,
all costs, expenses and obligations incurred by Seller through and including the
Closing in connection with the development and construction of the Facility
which have not been paid as of the Closing Date, which costs, expenses and
obligations include, but are not necessarily limited to, retainage held back
from the Contractor pursuant to the Construction Contract ($0 as ofthe date
hereof) and accrued developer's fees payable by Seller to BLCI ($231,195.30 as
of the date hereof), and agrees to reimburse Seller for the Closing Costs in
accordance with the terms of the Development Agreement.
3. Closing. The closing ("Closing") of the purchase and sale of the
Property shall occur on a date designated by Seller, but in no event later than
June 30, 1998, unless otherwise agreed by the parties hereto. The Closing shall
take place at the offices of Hunton & Xxxxxxxx. The time and date of such
Closing are herein called the "Closing Date".
4. Representations and Warranties of Seller. Seller represents,
warrants and covenants to Purchaser, its partners, officers, managers,
employees, agents, (including without limitation Xxxxx X. Xxxxxxx) that, as of
the date hereof and the Closing Date: (a) Seller is the owner of the Property
subject to the Permitted Exceptions and has full power and authority to sell,
convey, assign and transfer to Purchaser the Property, free and clear of all
liens and encumbrances except the Permitted Exceptions; (b) Seller has full
capacity, right, power and authority to execute, deliver and perform this
Agreement and all documents pursuant hereto, and all required actions and
approvals therefor have been duly taken and obtained; (c) this Agreement and all
documents to be executed pursuant hereto by Seller are and shall be binding upon
and enforceable against Seller in accordance with their respective terms; (d)
there are no litigation or other proceedings pending against Seller which could
have a material adverse effect on Seller's ability to consummate the transaction
contemplated hereby and (e) the Property is in full compliance with all
applicable laws, including, without limitation, any laws governing hazardous
substances. The representations and warranties of Seller set forth above shall
be deemed remade on the Closing Date, and shall survive the Closing and the
recording of the deed.
5. Representations and Warranties of Purchaser. Purchaser represents,
warrants and covenants to Seller that, as of the date hereof and the Closing
Date: (a) Purchaser has full partnership power and authority to execute, deliver
and perform this Agreement and all documents pursuant hereto, and all required
partnership actions and approvals therefor have been duly taken and obtained;
(b) this Agreement and all documents to be executed pursuant hereto by Purchaser
are and shall be binding upon and enforceable against Purchaser in accordance
with their respective terms; and (c) there are no litigation or other
proceedings pending against Purchaser which could have a material adverse effect
on Purchaser's ability to consummate the transaction contemplated hereby. The
representations and warranties of Purchaser set forth above shall be deemed
remade on the Closing Date, and shall survive the Closing and the recording of
the deed.
6. Seller's Deliveries at Closing. In addition to this Agreement and
the Development Agreement, Seller shall deliver to Purchaser at the Closing the
following items:
(a) Xxxx of Sale. A xxxx of sale conveying, transferring and
otherwise assigning to the Purchaser any and all of the Property, other
than the real estate.
(b) Special Warranty Deed. Special Warranty Deed for the Land
subject to the Permitted Exceptions.
(c) Other Documents. Such other documents which are necessary
to complete and perfect the conveyance of Property to the Purchaser as
contemplated by this Agreement, including, without limitation, any
transfer declarations, owner's affidavits and undertakings required by
the title company and similar items required by local law or the title
company.
7. Purchaser's Deliveries at Closing. In addition to this Agreement,
the Development Agreement and the Note, Purchaser shall cause AH Subordinate and
AH CGP to deliver to Seller the Guaranty and the pledge agreement or pledge
agreements contemplated by Section 2 hereof, and shall deliver, or cause to be
delivered to Seller at the Closing such other documents which are necessary to
complete and perfect the conveyance of Property to Purchaser as contemplated by
this Agreement, including, without limitation, any transfer declarations,
owner's affidavits and undertakings required by the title company and similar
items required by local law or the title company.
8. Repurchase Right. If (a) by September 30, 1998 Purchaser fails to
obtain and cause to be funded financing from Nomura Asset Capital Corporation
and Banc One Capital Corporation, or one of their respective affiliates,
generally consistent with the provisions of the term sheets or commitments
previously issued with respect to the Property and otherwise acceptable to
Seller (the "Financing"), or (b) prior to the closing of the Financing,
Purchaser elects to transfer (directly or indirectly) its ownership interest in
the Property, or Purchaser, AH CGP or AH Subordinate violates any provision of
its organizational documents, then, in either (or both) of such events, Seller
shall have the right to repurchase the Property from Purchaser for an amount (as
increased pursuant to the immediately following sentence, the "Repurchase
Price") equal to the Purchase Price less the Cash Portion. The Repurchase Price
shall increase by nine percent (9%) per annum from the Closing Date until the
closing of the reconveyance of the Property pursuant to this Section 8. The
Repurchase Price may be payable, in part, by the cancellation of the Note. If
Seller elects to repurchase the Property, Purchaser shall deliver title and
conveyance documents to Seller which are equivalent to those delivered to
Purchaser at the Closing (except for any title matters, including mechanics'
liens, created by or relating to Seller, and except that Purchaser shall clear
any title matters created by or relating to Purchaser). In addition, at the
closing of the reconveyance of the Property pursuant to this Section 8, seller
shall assume all of Purchaser's obligations under the Development agreement.
Purchaser's obligations and Seller's rights under this Paragraph Section 8 shall
be set forth in the documents recorded at the Closing. If Seller elects to
exercise the repurchase right provided for herein, Seller must give notice of
such election not later than October 31, 1998. The closing of the reconveyance
of the Property to Seller, and the payment to Purchaser of the Repurchase Price
therefor, shall occur not later than the later of (i) thirty (30) days after
Seller gives Purchaser notice of Seller's election to repurchase the Property,
or (ii) five (5) days after Purchaser has completed clearance of any title
matters required to be cleared by Purchaser (except for clearance of matters to
be paid and released at the repurchase closing, using any cash paid in payment
of the Repurchase Price). The provisions of this Section 8 shall survive the
Closing.
9. Miscellaneous.
(a) No Brokerage. Each party hereto represents and warrants to the
other parties hereto that it has not incurred any obligation or liability,
contingent or otherwise, for brokerage or finder's fees or agent's commissions
or other like payment solely in connection with this Agreement or the sale of
the Property contemplated hereby and each party agrees to indemnify and hold the
other parties hereto harmless against and in respect of any such obligation or
liability based in any way on agreements, arrangements or understandings claimed
to have been made by such party with any third party.
(b) Survival of Representations, Warranties and Agreements.
The representations, warranties and agreements of the parties contained in this
Agreement shall survive the Closing Date.
(c) Notices. All notices, requests, demands and other
communications which are required or may be given under this Agreement shall be
in writing and shall be deemed to have been duly given if delivered personally
or sent by telex, or sent by United States mail, certified or registered,
postage prepaid, with return receipt requested, or otherwise actually delivered,
addressed to the parties hereto at the addresses set forth in the Development
Agreement.
(d) Entire Agreement. This Agreement (including the exhibits
and schedules hereto) constitutes the entire agreement among the parties hereto
and supersedes all prior agreements and understandings, oral and written, among
the parties hereto with respect to the subject matter hereof.
(e) Binding Effect; Benefit. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and each other person who is
indemnified under any provision of this Agreement and their respective
successors and assigns. Nothing in this Agreement, expressed or implied, is
intended to confer on any person other than the parties hereto and/or each other
person who is indemnified under any provision of this Agreement or their
respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
(f) Amendment; Waiver. No provision of this Agreement may be amended,
waived or otherwise modified without the prior written consent of the parties
hereto.
(g) Section Headings. The section headings contained in this Agreement
are for reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
(h) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.
(i) Applicable Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the state where the Land is located.
(j) Indemnity. Seller agrees to indemnify and hold harmless Purchaser, its
partners, officers, managers, employees, agents (including without limitation
Xxxxx X. Xxxxxxx) for any and all costs and/or expenses (including without
limitation reasonable attorneys' fees) in connection with any tax audit or
related proceedings directly arising out of the transactions contemplated by
this Agreement. This indemnity shall survive the closing.
(k) Telecopy. This Agreement may be transmitted via telecopy and shall be
deemed an original for all purposes.
10. Limitation of Personal Liability. Notwithstanding any other
provision of this Agreement to the contrary, in no event shall any officer,
director, member, partner, manager, shareholder, incorporator or agent of
Purchaser or of Purchaser's affiliates be personally liable to Seller for any of
Purchaser's obligations under this Agreement, except as expressly provided in
the Guaranty and the Collateral Assignment (as defined in the Guaranty).
[Signature page follows]
IN WITNESS WHEREOF, the undersigned have executed and delivered this
Agreement as of the date first above written.
SELLER:
Brookdale Living Communities of North
Carolina, Inc.
By: __________________________
Name: Xxxxxx X. Xxxxxxxx, Xx.
Its: Vice President
PURCHASER:
AH North Carolina OWNER LIMITED
PARTNERSHIP
By: AH North Carolina CGP, Inc., its
Managing General Partner
By:
Name: Xxxxx X. Xxxxxxx
Its: President
EXHIBIT A
LEGAL DESCRIPTION
[SEE ATTACHED]
EXHIBIT B
PERMITTED EXCEPTIONS
The Repurchase Right set forth in Section 8 of the foregoing Purchase and Sale
Agreement and all restrictions, easements and other matters of record applicable
to the Property, other than liens.
EXHIBIT C
FORM OF PROMISSORY NOTE
blc\nomura\P&S North Carolina
JOINDER BY BROOKDALE LIVING COMMUNITIES, INC.
This Joinder (this "Joinder") by Brookdale Living Communities, Inc., a
Delaware corporation ("Guarantor"), effective as of June 30, 1998, is attached
to and a part of that certain Purchase and Sale Agreement (the "Agreement")
dated as of June 30, 1998, by and between AH North Carolina Owner Limited
Partnership ("Purchaser") and Brookdale Living Communities of North Carolina,
Inc. ("Seller"). Guarantor is the sole stockholder of all of the outstanding
stock of Seller and, as such, will benefit from the Agreement. All terms not
otherwise defined in this Joinder shall have the same meaning ascribed to them
in the Agreement. Guarantor hereby irrevocably, absolutely and unconditionally
guarantees to Purchaser, its partners, officers, managers, employees, agents
(including without limitation Xxxxx X. Xxxxxxx) the prompt and complete
observance, fulfillment and performance of all of the obligations of Seller
under or pursuant to the Agreement.
GUARANTOR:
BROOKDALE LIVING COMMUNITIES, INC.,
a Delaware corporation
By:
Name: Xxxxxx X. Xxxxxxxx, Xx.
Title: Executive Vice President
