REAL ESTATE PURCHASE AGREEMENT
THIS AGREEMENT made this 14th day of July, 1997, between Colorado
Springs Assisted Living, L.L.C., a Kansas Limited Liability Company
("Seller"), and Sterling House Corporation ("Purchaser").
1. Sale and Purchase. For and in consideration of the mutual
covenants contained herein, Seller agrees to sell and convey to Purchaser or
its assigns the following described Land, Improvements, Personal Property, and
Intangibles (collectively, the "Project") consisting of the following:
1.1 Land. Three parcels described as follows:
A. Broadmoor Assisted Living Facility ("Broadmoor I")
000 Xxxxxxxxxxx Xxxxx
(Xxxxxx)
Xxxxxxxx Xxxxxxx, XX 00000
(City, State, Zip)
legally described on Exhibit A attached hereto;
B. Vacant land ("Broadmoor II")
000 Xxxxxxxxxxx Xxxxx
(Xxxxxx)
Xxxxxxxx Xxxxxxx, XX 00000
(City, State, Zip)
legally described on Exhibit B attached hereto;
and
C. Briargate Assisted Living Facility ("Briargate")
0000 Xxxxxxxxx Xxxxx
(Xxxxxx)
Xxxxxxxx Xxxxxxx, XX 00000
(City, State, Zip)
legally described on Exhibit C attached hereto.
1.2 Improvements. All buildings, improvements, and fixtures
located on the land.
1.3 Tangible Personal Property. All tangible personal property
used in the ownership, operation or maintenance of the aforesaid land or
improvements, including without implied limitation, all furniture,
furnishings, maintenance equipment, signs, draperies, and carpeting.
1.4 Intangible Property. All intangible property used in the
ownership, operation or maintenance of the Project, including all contract
rights, instruments, documents of title, transferable
licenses, and goodwill pertaining to the ownership, operation or management of
the Project, EXCLUDING cash in bank accounts determined as of Closing Date.
2. Purchase Price. The total consideration to be paid to Seller by
Purchaser for the Project (the "Purchase Price") is Six Million Six Hundred
Thousand Dollars ($6,600,000.00).
3. Payment of Purchase Price.
3.1 Effective Date. The Effective Date shall be the date on
which the Purchaser has received an original counterpart of the Agreement,
fully executed by Purchaser and Seller.
3.2 Xxxxxxx Money Deposit. Promptly after the Effective Date,
Purchaser shall deposit with Security Abstract and Title Company, Inc., as
Agent (the "Title Company"), the sum of One Hundred Thousand Dollars
($100,000.00). Said deposit, and any interest earned thereon, shall together
be referred to as the "Xxxxxxx Money Deposit." Upon the consummation of this
transaction (the "Closing"), the Xxxxxxx Money Deposit shall be applied to the
Purchase Price.
3.3 Balance of Purchase Price. The balance of the Purchase
Price, adjusted by any prorations or expenses required herein, shall be paid
to Seller at Closing by certified or other immediately available funds.
4. Title Commitment. Seller shall furnish to Purchaser the Title
Company's commitment (the "Commitment") to insure title to the Land. The
Commitment shall commit to issue an ALTA Owners Policy covering the Land in an
amount equal to the Purchase Price (the "Title Policy"). Legible copies of
all instruments referred to in the Commitment shall be furnished to Purchaser.
5. Permitted Exceptions. At the Closing, the Title Policy shall
contain only such exceptions as approved by Purchaser.
6. Review of Commitment and Survey. Purchaser may obtain a survey of
the Project, at Purchaser's expense. The survey shall be acceptable to
Purchaser. Purchaser shall have thirty (30) days after receipt of the Survey
and the final Commitment (and copies of documents referred to in the
Commitment), to review the same and to deliver Purchaser's written objections
to the Survey or to any exception or exclusion shown in the Commitment and not
permitted under Paragraph 5 hereof.
7. Seller's Obligation of Cure. Seller shall have thirty (30) days
from receipt of Purchaser's objections to remove all said defects in the
Commitment and the Survey, or to provide assurances acceptable to Purchaser
that the same will be removed on, at or before Closing. Should Seller be
unable to cure (or provide assurances acceptable to Purchaser with respect to
cure) any and all such defects or objections within the thirty (30) day
period, the Purchaser may, at Purchaser's option, (i) extend the period for
cure for an additional thirty (30) days, thereby providing Seller additional
time within which to cure all such defects or objections, at Seller's expense,
(ii) elect to terminate this Agreement and obtain the return of the Xxxxxxx
Money Deposit, (iii) waive its objections and proceed to Closing; or (iv) seek
specific performance of Seller's obligation to cure.
8. Closing. Consummation of this sale shall occur not later than
August 31, 1997. The Closing will take place at the offices of the Title
Company, at such date and time as shall be mutually agreed between the
parties.
9. Seller's Deliveries at the Closing. On date of Closing, Seller
shall deliver or cause to be delivered to Purchaser or its assigns, the
following:
9.1 General Warranty Deeds. General Warranty Deeds, executed by
Seller conveying marketable title to the Land described in Section 1.1 and the
Improvements described in Section 1.2 to Purchaser or assigns.
9.2 Xxxx of Sale. A Xxxx of Sale conveying marketable title to
the personal property described in Section 1.3 to Purchaser or assigns.
9.3 Title Insurance. The Title Policy or a binding commitment
to insure, updated to date of closing.
9.4 Documents for Title Purposes. Documents evidencing the
legal status, standing, and authority of Seller, together with such other
documents, including standard Seller's affidavits, that may be required by
Title Company for completion of the Closing or issuance of the Title Policy.
9.5 Contracts and Keys. The originals of all contracts and
Leases affecting the Project, all combinations and keys to locks and other
security devices located on the Project and all other items reasonably
requested by the Purchaser relating to the Project to the extent that the
foregoing items are in the possession of Seller.
9.6 Additional Documents. Such additional documents reasonably
requested by Purchaser to consummate the sale of the Project.
9.7 Accounting of Deposits. A complete and accurate accounting
of all deposits transferred to Purchaser including the amount of each deposit
and the name and address of each depositor.
10. Purchaser's Deliveries. At the Closing, Purchaser shall deliver or
cause to be delivered to Seller, the following:
10.1 Purchase Price. The Purchase Price in certified or
immediately available funds.
10.2 Documents for Title Purposes. Such documents evidencing the
legal status, standing, and authority of Purchaser and standard Purchaser's
affidavits as may be required by the Title Company for issuance of the Title
Policy.
10.3 Additional Documents. Such additional documents reasonably
requested by Seller to consummate the sale of the Project to the Purchaser.
11. Possession. Possession of the Project will be delivered by Seller
on or before the close of business on the Closing Date, subject to all parties
claiming rights to possession pursuant to written or oral lease agreements in
place on date of Closing, provided, however, that no such written or oral
lease shall be for a term in excess of one (1) year. Effective on the
delivery of the deeds conveying title to the Project by Seller to Purchaser,
beneficial ownership and the risk of loss of the Project will pass from Seller
to Purchaser.
12. Project Management: Employees. On the Closing Date the Seller
will deliver evidence reasonably satisfactory to the Purchaser that the
Manager and all Leasing Agents employed by the Seller with respect to the
Project have been paid all compensation due for services rendered and that all
agreements with respect to management and leasing of the Project have been
terminated and Seller will indemnify Purchaser and hold Purchaser harmless
from same.
13. Costs. The Seller will pay the following Closing costs: the
Seller's attorney fees; one-half of the premium for the Owner's title
insurance policy; and one-half of any closing fee. The Purchaser will pay the
following Closing costs: Purchaser's attorney fees, one-half of the costs
relating to the issuance of the Owner's title insurance policy; the costs of
recording all documents; one-half of any closing fee; and all sales and
transfer taxes imposed by the jurisdiction in which the Project is located, if
any.
14. Review Period. Purchaser and its assigns shall have thirty (30)
days (the "Review Period") from the Effective Date in which to conduct a due
diligence review of the Project. The scope of the review may include:
business, accounting, financial, legal, and tax aspects of the business of the
Project; the physical condition of the Improvements and Tangible Personal
Property; the nature and extent of the Intangible Property; environmental
aspects of the Land and groundwater; and any other matter reasonably related
to the assets to be conveyed pursuant to this Agreement or to the business
purpose for those assets. The review may include but is not limited to:
financial and accounting review; review of leases, contracts, and other legal
documents; review of survey to be provided to Purchaser by Seller;
environmental assessments; and structural and other physical inspections of
the Improvements.
Seller will cooperate fully with Purchaser. Seller will grant Purchaser
and its assigns and those chosen by Purchaser and its assigns prompt access to
all parts of the Project and to all records pertaining to the Project and the
business of the Project. Purchaser and those chosen by Purchaser may
photocopy any such records and retain the photocopies.
Subject to the provisions of paragraph twenty-one (21) of this
Agreement, Purchaser shall pay the cost of the review to be conducted pursuant
to this paragraph. Purchaser shall indemnify and hold Seller harmless from
any claim allegedly arising from Purchaser or those chosen by Purchaser being
at the Project to conduct inspections. Purchaser shall repair any physical
damage caused by such inspections.
In the event that any material results of Purchaser's review are
unsatisfactory to Purchaser, Purchaser may terminate this Agreement by written
notice to Seller, indicating which aspects Purchaser considers unsatisfactory.
Upon delivery of such written notice to Seller, this Agreement shall terminate
automatically, the Xxxxxxx Money Deposit shall be returned to Purchaser, and
thereafter the parties will have no further rights or duties to each other
under this Agreement.
15. Adjustments: Prorations. All receipts and disbursements of the
Project will be prorated on the Closing Date as of 12:00 midnight on the day
preceding the Closing Date and the purchase price will be adjusted on the
following basis:
15.1 Disbursements. All sums due for accounts payable and other
obligations which were owing or incurred by the Seller in connection with the
Project prior to the Closing Date will be paid by the Seller and the Seller
agrees to defend, indemnify, and hold the Purchaser harmless with respect
thereto. The Purchaser will furnish to the Seller for payment any bills for
such period received after the Closing Date and the Purchaser will have no
further obligation with respect thereto.
15.2 Property Taxes. All real and personal property ad valorem
taxes and installments of special assessments, if any, for the calendar years
preceding the year in which the Closing Date occurs will be paid by the
Seller. All real and personal ad valorem taxes and special assessments, if
any, whether payable in installments or not, for the calendar year in which
the Closing Date occurs will be prorated to the Closing Date, based on the
latest available tax rate and assessed valuation.
15.3 Rents and Other Income. All rents and other revenue and
income shall be prorated to the Closing Date. All deposits shall be
transferred to Purchaser at Closing.
15.4 Utility Charges. All utility charges will be prorated to
the Closing Date and the Seller will obtain a final billing therefor. All
utility security deposits, if any, will be retained by Seller.
15.5 Project Employees. To the extent the Purchaser elects to
employ any personnel of the Seller engaged in the operation of the Project
subsequent to the Closing Date, all compensation payable, if any, to such
employees (including the cost of fringe benefits and accrued vacation pay)
which accrued prior to the Closing Date will be paid by the Seller. All
compensation payable to such employees which accrues subsequent to the Closing
Date will be paid by the Purchaser.
16. Covenant to Operate. Prior to the Closing Date the Seller agrees
to maintain, repair, manage, and operate the Project in a businesslike manner
in accordance with the Seller's prior practices and agrees that the Seller
will not remove any property therefrom or act or omit to act in such a way as
to cause an adverse financial effect on the Project.
17. Other Actions. The Purchaser and Seller agree to perform or cause
to be performed the following:
17.1 Cooperation. After the Closing Date, the Seller will assist
the Purchaser in an orderly transfer of the Project so that the change of
ownership can be accomplished with minimum interference to the efficient
operation of the Project. The Seller will, on the request of the Purchaser,
provide such information with respect to the Project as reasonably requested
by Purchaser.
17.2 Purchaser's Indemnification. After the Closing Date, the Purchaser
agrees to defend, indemnify, and hold the Seller
harmless from all damages, liabilities, costs, and expenses (including
attorneys' fees and other litigation expenses) arising from: (i) accounts
payable and other claims relating to the Project which are incurred and which
accrued after the Closing Date or which are specifically assumed by the
Purchaser, (ii) claims by former employees of the Seller whose employment is
continued by the Purchaser to the extent that such claims arise from
occurrences taking place after the Closing Date.
18. Damage or Destruction. In the event any portion of the Project is
damaged or destroyed at any time prior to Closing, Seller shall give Purchaser
prompt notice thereof and, unless Seller shall fully repair and restore same
prior to Closing or unless the parties shall otherwise agree, Purchaser shall
have the option to terminate this Agreement and receive a full refund of the
Xxxxxxx Money Deposit.
19. Condemnation. In the event any part of the Project is condemned
or threatened with condemnation at any time prior to Closing, Seller shall
give Purchaser prompt notice thereof and Purchaser shall have the option to
terminate this Agreement and receive a full refund of the Xxxxxxx Money
Deposit.
20. Representations, Warranties, and Covenants of Seller. Seller
hereby represents, warrants, and covenants to Purchaser as follows, which
representations and warranties shall survive the Closing:
(a) There is no litigation pending or, after due and diligent
inquiry, to the best of Seller's knowledge, threatened, against Seller, or any
basis therefor, that arises out of the ownership of the Project or that might
detrimentally affect the use or operation of the Project for its intended
purpose or the value of the Project or adversely affect the ability of Seller
to perform its obligations under this Agreement.
(b) To provide Purchaser with true and accurate copies of all
Leases currently in effect, together with all correspondence, etc., relating
thereto, within ten (10) days following the execution hereof by both parties.
Such Leases are not in default except as noted in writing to Purchaser at the
time of the delivery of the Leases to Purchaser.
(C) To the best of Seller's knowledge, there is no hazardous
substance or material in, on or under the Project.
(d) As of the date hereof and at the time of Closing, there shall
be no outstanding contracts made by Seller for any improvements made to the
Project for which full payment has not been made, and Seller shall cause to be
discharged all mechanics' or materialmans' liens arising from any labor or
materials furnished to the Project prior to the time of Closing.
(e) All records and information furnished to Purchaser by Seller
or Seller's agents are true, correct, and complete.
21. Conditions Precedent. The Parties' respective obligations to
purchase and sell the Project and to perform the other covenants and
obligations to be performed by them hereunder shall be subject to the
following conditions (which may be waived, in whole or in part, by the Party
in whose favor):
(a) The representations and warranties made by the Seller shall be
true and correct in all material respects on and as of the Closing, with the
same force and effect as if made on and as of such date, and Seller shall have
performed all covenants and obligations and complied with all conditions
required by this Agreement to be performed and complied with by Seller on or
before the Closing.
(b) Seller shall have furnished to Purchaser, on or before
Closing, an undertaking pursuant to which Seller indemnifies and holds
Purchaser harmless from any claims of any nature by any tenant, to the extent
such claims relate or pertain to any period prior to closing.
(c) Should any analysis or test borings or studies obtained by
Purchaser concerning the environmental conditions of the Project disclose the
existence or possibility of the existence of hazardous wastes, toxic
substances, contamination, pollution, or noncompliance with any federal, state
or local law, rule, regulation, order or decree pertaining to the environment,
Purchaser shall have the right to terminate this Agreement upon written notice
given to the Seller. Purchaser shall provide Seller a copy of any such
analyses, borings, studies, and test results if Seller so requests.
In the event Purchaser terminates this Agreement due to any
of the above reasons, then Seller shall pay the full cost of such analyses,
borings, and studies. In the event Purchaser closes the purchase of the
Project hereunder, Purchaser shall pay the full cost of such analyses,
borings, and studies.
(d) The results of the review pursuant to paragraph fourteen (14)
must be satisfactory to Purchaser.
(e) This Agreement must be approved by Purchaser's Board of
Directors and all Members of Seller.
(f) In the event any of the foregoing conditions shall not be
fulfilled or waived, this Agreement shall terminate and the Xxxxxxx Money
Deposit shall be returned to Purchaser.
22. Default: Remedy. In the event that either party fails to perform
such party's obligations hereunder (except as excused by the other party's
default), the party claiming default will make a written demand for
performance.
If Seller fails to comply with such written demand within ten (10) days
after receipt thereof, the Purchaser will have the option to: (i) waive such
default; (ii) terminate this Agreement and receive a full refund of the
Xxxxxxx Money Deposit; (iii) seek specific performance; and/or (iv) seek
damages.
If the Purchaser fails to comply with such written demand within ten
(10) days after receipt thereof, the Seller will have the option to waive such
default or to terminate this Agreement; and on such termination, the Seller
will be entitled to retain the Xxxxxxx Money Deposit as liquidated damages
arising from such default. The parties agree that the amount of actual
damages which the Seller would suffer as a result of the Purchaser's default
would be difficult to determine and have agreed, after specific negotiation
relating hereto, that the amount of the Xxxxxxx Money Deposit is a reasonable
estimate of the Seller's damages and is a fixed amount of liquidated damages
in lieu of other remedies available to the Seller and does not constitute a
penalty.
23. Attorney's Fees. In the event any dispute hereunder results in
litigation filed by either party against the other, the party in whose favor
the final judgment is rendered shall be entitled to recover its reasonable
litigation expenses and attorneys' fees. The rights and obligations contained
in this Section shall survive the Closing and/or termination of this
Agreement.
24. Entire Agreement. This document contains the entire agreement of
the Purchaser and Seller relating to the sale of the Project, superseding all
prior agreements whether oral or written. There are no agreements,
understandings, warranties or representations between Purchaser and Seller
except as set forth herein.
25. Amendment. No provision of this Agreement can be changed, waived,
discharged or terminated, except by an instrument in writing signed by the
party against whom enforcement of the change, waiver, discharge or termination
is sought.
26. Notices. Any notices or communication required or permitted under
this Agreement shall be deemed to have been received when delivered
personally, or on the third (3rd) business day after the same is sent by
certified mail, postage prepaid, addressed to the parties as follows:
Seller: Xxxxxx X. Xxxxxx
000 Xxxxx Xxxx Xxxx, #000
Xxxxxxx, Xxxxxx 00000
Purchaser:Sterling House Corporation
Attn: Xxxxxx X. Xxxx
000 Xxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxx 00000
27. Survival of Representations and Warranties. All representations
and warranties of Seller and Purchaser in this Agreement will survive date of
Closing and continue in full force and effect thereafter for a period of two
years.
28. Parties Bound. This Agreement shall be binding upon and inure to
the benefit of Seller and Purchaser, and their respective successors and
assigns.
29. Assignment. Purchaser may assign its rights hereunder upon notice
to Seller.
30. Governing Law. The substantive laws of the State of Kansas and
the United States of America will govern the validity, construction, and
enforcement of this Agreement.
31. Severability. If any clause or provision of this Agreement is
invalid or unenforceable under any present or future law, the remainder of
this Agreement will not be affected thereby. It is the intention of the
parties that if any such provision is held to be invalid, or unenforceable,
there will be added in lieu thereof a provision as similar in terms to such
provision as is possible to be valid and enforceable.
32. Time is of the Essence. Purchaser and Seller hereby expressly
agree that time is of the essence with respect to the performance of each and
every obligation required hereunder.
33. Seller Shall Furnish Documents. Seller agrees to furnish
Purchaser with any documents pertaining to environmental conditions on the
subject property, including but not limited to soil or water contamination or
the presence of asbestos.
"SELLER
COLORADO SPRINGS ASSISTED LIVING, L.L.C.,
a Kansas Limited Liability Company
BY ALL ITS MEMBERS:
/s/ Xxxxxx X. Xxxxxx 7/14/97
(Name) Date
(Name) Date
(Name) Date
(Name) Date
(Name) Date
"PURCHASER"
STERLING HOUSE CORPORATION
BY:
/s/ Xxxxxx Xxxx 7/14/97
(Name) Xxxxxx Xxxx Date
(Title) President
