PROPERTY OPTION AGREEMENT
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This Property Option Agreement (this "Agreement"), dated as of August
24, 1999, is made and entered into by and between AH Battery Park Owner, LLC, an
Ohio limited liability company (the "Grantor"), and Brookdale Living Communities
of New York-BPC, Inc., a Delaware corporation ("Brookdale").
RECITALS
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WHEREAS, the Grantor owns the leasehold interest in certain land
legally described on Schedule I attached hereto, together with all fixtures and
improvements thereon (such land, fixtures and improvements, together with any
additional fixtures and improvements constructed after the date hereof, shall
collectively be referred to as the "Land") subject in all cases to the terms and
provisions contained in that certain Ground Lease dated as of August 24, 1999
(the "Ground Lease") by and between Grantor, as lessee, and Battery Park City
Authority, as lessor ("Lessor");
WHEREAS, the Grantor has engaged Brookdale for the purpose of
developing a senior congregate and non-licensed assisted living facility in
Battery Park City, New York (the "Project") on the Land pursuant to that certain
Amended and Restated Development Agreement of even date herewith (as it may be
amended from time to time, the "Development Agreement") between the Grantor and
Brookdale;
WHEREAS, the Grantor has engaged Brookdale for the purpose of acting as
the manager of the Project pursuant to that certain Management Agreement of even
date herewith (as it may be amended from time to time, the "Management
Agreement") between the Grantor and Brookdale; and
WHEREAS, Key Corporate Capital, Inc., Fleet National Bank and European
American Bank (collectively, the "Senior Lender"), have agreed to make a loan
(the "Senior Loan") to the Grantor up to the sum of $49,125,000 to fund a
portion of the costs of the Project pursuant to (i) that certain Building Loan
Agreement of even date herewith (as it may be amended from time to time with the
consent of Brookdale, the "Senior Loan Agreement") between the Grantor and the
Senior Lender and (ii) the other "Loan Documents" (as such term is defined in
the Senior Loan Agreement; as the same may be amended from time to time with the
consent of Brookdale, collectively with Senior Loan Agreement, the "Senior Loan
Documents").
NOW, THEREFORE, in consideration of the mutual agreements contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Grantor and Brookdale hereby agree
as follows:
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1. The Option.
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a. The Owner hereby grants an irrevocable option (the " Option") to
Brookdale (or its nominee) to purchase the Property (as
hereinafter defined) subject to the Permitted Exceptions (as
hereinafter defined) for the Purchase Price (as hereinafter
defined).
b. The Option shall terminate and expire on the date (the "Option
Termination Date") that is thirty (30) days after the stated
maturity date of the Senior Loan, as it may be extended.
2. The Property. For purposes of this Agreement, the term "Property" shall
mean any and all interests of the Owner in the following items: (a) the
Land and the Ground Lease, (b) all personal property and other tangible
property now or hereinafter 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, and (c)
all other property now or hereafter used in connection with the
operation or maintenance of the Land, including, but not limited to,
contracts, leases, agreements, guaranties, plans and specifications,
licenses, books and records and all other items and instruments
pertaining to the Land and the Ground Lease.
3. Purchase Price. The purchase price (the "Purchase Price") for the
Property shall be the fair market value of the Property as agreed to by
the parties (or if the parties do not agree to such fair market value,
then as reflected in an appraisal of the Property, dated not more than
six (6) months before the Closing Date [as defined in Section 4
hereof], by a qualified MAI appraiser selected by Brookdale, less the
then outstanding principal amount of the Senior Loan if the Senior Loan
is being assumed by Brookdale (or its nominee).
4. Exercise of the Option. Brookdale may exercise the Option by giving the
Owner at least five (5) days' prior written notice (the "Option
Notice"). The Option Notice shall specify (a) the date (the "Closing
Date") of the exercise of the Option, which shall be not be later than
the Option Termination Date. If Brookdale exercises the Option prior to
the Option Termination Date but fails to close prior to the Option
Termination Date due to no fault of Grantor, then the Option shall
terminate and Brookdale's right shall cease and be null and void.
5. Closing. Upon receipt of the Option Notice, the parties will schedule a
closing (the "Closing") to occur on the Closing Date at the Chicago,
Illinois offices of counsel to Brookdale. If Brookdale (or its nominee)
exercises the Option, the Closing shall occur in accordance with the
provisions of Section 7 hereof.
6. Intentionally Omitted.
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7. Closing of Purchase of Property.
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a. At the Closing of the purchase of the Property, the Purchase
Price shall be paid to the Owner by wire transfer of immediately
available funds to an account designated by the Owner.
b. At the Closing of the purchase of the Property, the Owner shall
deliver to Brookdale (or its nominee) the following items
(collectively, the "Property Conveyance Documents"):
i. Xxxx of Sale. A xxxx of sale (the "Xxxx of Sale")
conveying, transferring and otherwise assigning to
Brookdale (or its nominee) any and all of the Property,
other than the Land.
ii. Assignment of Leases and Agreements. An assignment of
leases and agreements (the "Assignment of Leases")
conveying, transferring and otherwise assigning to
Brookdale (or its nominee) any and all rights in any
leases, residency agreements or other agreements
affecting the Project or the Land, which Brookdale
previously approved.
iii. Special Warranty Deed. A Special Warranty Deed and/or
Assignment of Lease (the "Deed") conveying to Brookdale
(or its nominee) Owner's interest in and to the Ground
Lease, subject only to the encumbrances or other
exceptions (collectively, the "Permitted Exceptions")
(A) that existed on the Land on the date of the
conveyance of the Land to the Owner, (B) created by the
lien of the Hard Cost Mortgage, Assignment of Leases
and Rents and Security Agreement and the Soft Cost
Mortgage, Security Agreement and Assignment of Leases
and Rents of even date herewith (together, the
"Mortgages") made by the Owner in favor of the Senior
Lender and all other Senior Loan Documents unless the
Senior Loan is being repaid, (C) created by Brookdale
in connection with actions taken by it under the
Development Agreement or the Management Agreement, (D)
Permitted Encumbrances (as defined in the Senior Loan
Documents) that are consented to in writing by
Brookdale and (E) the Ground Lease.
iv. Other Documents. Such other documents or instruments
which are necessary to complete and perfect the
conveyance of Property to Brookdale or its nominee as
contemplated by this Agreement, including, without
limitation, any transfer declarations, 1099-S
Solicitations, owner's affidavits and
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undertakings required by the title company and similar
items required by local law or the title company.
c. The Owner and Brookdale shall each be solely responsible for its
own costs incurred in connection with the Closing; provided,
however, that Brookdale shall (i) pay all costs in connection
with the transfer of the Property, including transfer and
conveyance taxes, if any, and (ii) pay, or reimburse the Owner
for, all reasonable legal fees and expenses of the Owner
incurred in connection with such Closing in an amount not to
exceed $2,500 when aggregated with all other legal fees and
expenses paid or reimbursed by Brookdale pursuant to Section
4(a) of the Equity Option Agreement.
8. Intentionally Deleted.
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9. Owner Representations. The Owner represents and warrants to Brookdale
as follows as of the date hereof and as of the Closing Date:
a. The Owner is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of
Ohio and has all requisite power and authority to execute,
deliver and perform its obligations under this Agreement and the
Property Conveyance Documents and to own and operate its
property and to carry on its business as now conducted. The
Owner is duly qualified to do business in each jurisdiction
where the nature of its operations and applicable laws require
such qualification, except where the failure to be so qualified
would not have a material adverse effect on the Owner.
b. The execution, delivery and performance of this Agreement by the
Owner have been, and, if applicable, as of the Closing Date, the
execution, delivery and performance of the Property Conveyance
Documents by the Owner will have been, duly authorized by all
necessary partnership action, and this Agreement is, and when
executed and delivered, each of the Property Conveyance
Documents will be, the legal, valid and binding obligation of
the Owner, enforceable in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency or the laws
or equitable principles affecting the enforcement of creditors'
rights generally.
c. The execution, delivery and performance by the Owner of this
Agreement do not, and, if applicable, the execution, delivery
and performance by the Owner of the Property Conveyance
Documents will not, contravene the terms of the Partnership
Agreement, conflict with or result in any breach or
contravention of, or the creation of any lien under, any
agreements or instruments to which it is a party or by which it
or any of its property is bound or violate any state or federal
law and all required
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approvals therefor, if any, have been of, if applicable, will
have been as of the Closing Date, duly obtained.
d. The Owner is the owner of the Property, subject to the Permitted
Exceptions and has full power and authority to sell, convey,
assign and transfer to Brookdale the Property, free and clear of
all liens and encumbrances except the Permitted Exceptions.
e. There is no litigation or other proceeding pending against the
Owner which could have a material adverse effect on the Owner's
ability to consummate the transactions contemplated by this
Agreement and the Property Conveyance Documents.
10. Covenants. Until the earlier of the Closing or the Option Termination
Date, unless Brookdale otherwise consents in writing, the Owner shall
continue to own the Property, free of any liens, claims or
encumbrances, other than Permitted Exceptions.
11. Miscellaneous.
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a. Equitable Relief. Grantor and Brookdale agree that money damages
or other remedy at law would not alone be sufficient or adequate
remedy for any breach or violation of, or a default under, this
Agreement by such Grantor and that, in addition to all other
remedies available to Brookdale, Brookdale shall be entitled to
an injunction restraining such breach, violation or default or
threatened breach, violation or default and to any other
equitable relief, including, without limitation, specific
performance, without bond or other security being required.
b. Notices. Any notices required or permitted to be sent hereunder
shall be delivered personally or by facsimile(with answer back
acknowledged) or mailed, certified mail, return receipt
requested, or delivered by overnight courier service to the
following addresses, or such other addresses as shall be given
by notice delivered hereunder, and shall be deemed to have been
given upon delivery, if delivered personally, upon receipt with
answer back acknowledged, if delivered by facsimile, three (3)
business days after mailing, if mailed, or one business day
after delivery to the courier, if delivery by overnight courier
service:
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If to Grantor: AH Battery Park Owner, LLC
c/o Alliance Holdings, Inc.
000 Xxxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
with a copy to: Squire, Xxxxxxx & Xxxxxxx, L.L.P.
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attention: Xxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
If to Brookdale: Brookdale Living Communities of
New York-BPC, Inc.
c/o Brookdale Living Communities, Inc.
00 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Xx.
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
c. Entire Agreement. This Agreement (including the schedule hereto)
constitutes the entire agreement among the parties hereto with
respect to the subject matter hereof and supersedes all prior
agreements and understandings, oral and written, among the
parties hereto with respect to the subject matter hereof.
d. Binding Effect; Benefit. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their
respective successors and assigns. Brookdale may assign its
rights under this Agreement without the consent of Grantor. In
the event that Brookdale assigns its rights under this
Agreement, it shall so notify the other parties hereto, and
references herein to Brookdale shall be deemed to be references
to the assignee to whom such rights have been assigned upon the
execution and delivery by Brookdale and such assignee of an
assignment and assumption agreement with respect to this
Agreement and delivery of a copy thereof to each of the other
parties hereto.
e. Amendment; Waiver. No provision of this Agreement may be
amended, waived or otherwise modified without the prior written
consent of the parties hereto.
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f. 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.
g. 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.
h. Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois
(without giving effect to principles of conflicts of law).
i. Waiver of Jury Trial. Each party hereto (or joining in the
execution hereof), after consulting or having had the
opportunity to consult with counsel, knowingly, voluntarily and
intentionally waives any right any of them may have to a trial
by jury in any litigation based upon or arising out of this
Agreement, or any of the transactions contemplated by this
Agreement, or any course of conduct, dealing, statements
(whether oral or written) or actions of any of them. No such
party shall seek to consolidate, by counterclaim or otherwise,
any action in which a jury trial has been waived with any other
action in which a jury trial cannot be or has not been waived
unless failure to so consolidate would result in a loss of such
claim.
j. Mortgage. The parties hereto acknowledge and agree that (i) the
Option is subject and subordinate to the lien of the Mortgages
and the Ground Lease, and (ii) upon the entry of a final decree
of foreclosure with respect to the Property, or the conveyance
thereof pursuant to a power of sale, if applicable, or
conveyance deed in lieu of foreclosure, the Option shall be
extinguished notwithstanding that the Option Termination Date
may not yet have occurred.
k. Limitation of Personal Liability. Notwithstanding any other
provision of this Agreement to the contrary, (i) in no event
shall any officer, director, member, partner, manager,
shareholder, incorporator or agent of Grantor be personally
liable to Brookdale for any of such Grantor's obligations under
this Agreement, and (ii) if the Owner defaults in connection
with any representation or covenant of the Owner set forth in
this Agreement, it will not create any personal liability
against the Owner. Notwithstanding any other provision of this
Agreement to the contrary, (i) in no event shall any officer,
director, member, partner, manager, shareholder, incorporator or
agent of Brookdale be personally liable to Grantor for any of
Brookdale's obligations under this Agreement, and (ii) if
Brookdale defaults in
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connection with any representation or covenant of Brookdale set
forth in this Agreement, it will not create any personal
liability against the Brookdale.
l. Confidentiality. Grantor acknowledges that Brookdale may suffer
irreparable harm if the information provided to Grantor pursuant
to this Agreement or this Agreement was disclosed to any third
parties. Accordingly, Grantor shall keep this Agreement and all
such information confidential and shall not disclose any of such
information not already known to the public to any party except
Grantor's lenders, attorneys, accountants and other professional
advisors in connection with the transactions contemplated by
this Agreement or as otherwise required by law or court order.
Grantor shall endeavor to minimize the number of persons who
have copies of this Agreement and shall inform each of such
persons of the confidential nature thereof. The provisions of
this Section shall not prohibit an affiliate of Grantor from
participating in other similar transactions with parties other
than Brookdale or its affiliates.
[Signature Page to Follow]
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IN WITNESS WHEREOF, the undersigned have executed and delivered this
Agreement as of the date first above written.
GRANTOR:
AH Battery Park Owner, LLC
By: AH Battery Park Member, LLC,
its sole member and manager
By: Alliance Holdings, Inc.,
its sole member and manager
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
Its: President
BROOKDALE:
BROOKDALE LIVING COMMUNITIES
OF NEW YORK-BPC, INC.
By: /s/ Xxxx X. Xxxxxxx
--------------------------
Name: Xxxx X. Xxxxxxx
Its: President
STATE OF PENNSYLVANIA )
) SS.
COUNTY OF XXXXXXXXXX )
The foregoing instrument was acknowledged before me this 18th day of
August, 1999, by Xxxxx X. Xxxxxxx, the President of Alliance Holdings, Inc., as
member and manager of AH Battery Park Member, LLC, which is the sole member of
AH Battery Park Owner, LLC.
NOTARY SEAL
/s/ Xxxxxx Xxxxxxxx
--------------------------
NOTARY PUBLIC
Xxxxxxxxxx County, Pennsylvania
STATE OF ILLINOIS )
)SS.
COUNTY OF XXXX )
The foregoing instrument was acknowledged before me this 16th day of
August, 1999, by Xxxx X. Xxxxxxx, the President of Brookdale Living Communities
of New York-BPC, Inc., on behalf of said corporation.
NOTARY SEAL
/s/ Xxxxx Xxxx Xxxxx
--------------------------
NOTARY PUBLIC
Xxxx County, Illinois
SCHEDULE I
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LEGAL DESCRIPTION
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All that certain plot, piece or parcel of land, situate, lying and being in the
Borough of Manhattan, County of New York, City of New York and State of New
York, bounded and described as follows:
BEGINNING at the intersection of the southerly line of Xxxxxxxx Street and the
westerly line of North End Avenue;
THENCE southerly along the westerly line of North End Avenue, a distance of
196.00 feet to a point on the northerly line of Xxxxxx Street;
THENCE westerly along said northerly line of Xxxxxx Street, a distance of 100.00
feet to the division line between Parcel 20C on the west and Parcel 20B on the
east;
THENCE northerly along said division line at right angles to the preceding
course, a distance of 196.00 feet to the southerly line of Xxxxxxxx Street;
THENCE easterly along said southerly line of Xxxxxxxx Street, a distance of
100.00 feet to the point of the BEGINNING.
