SALE CONTRACT
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THIS SALE CONTRACT (this "CONTRACT") is made and entered into as of the
17th day of April, 2002, by and between SENIOR LIFESTYLE SHREVEPORT, L.L.C.
("SELLER"), and EMERITUS CORPORATION ("BUYER").
RECITALS:
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A. Seller is the owner of a parcel of land located in Shreveport,
Louisiana, more particularly described on Exhibit A attached hereto and made a
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part hereof, together with an assisted living facility and appurtenant
improvements and fixtures (the "REAL PROPERTY"), and Seller owns the Personal
Property (as defined in the Exhibit Recitals attached hereto and made a part
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hereof) at the Real Property (the Real Property, together with the Personal
Property, the "FACILITY").
B. Seller desires to sell and Buyer desires to purchase the Facility
pursuant and subject to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises hereinafter set
forth, and of other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
1. PURCHASE AND SALE. Subject to the provisions of this Contract, Seller
agrees to sell and convey and Buyer agrees to purchase and acquire the Facility.
The term "BUYER" as used herein shall include any designee of Buyer.
2. PURCHASE PRICE AND XXXXXXX MONEY. The purchase price ("PURCHASE PRICE")
shall be Ten Dollars ($10.00). The Purchase Price takes into account that Buyer
will (i) assume the loan, in the original principal amount of $6,480,000, which
is secured by a mortgage lien encumbering the Facility (the "SHREVEPORT LOAN"),
and (ii) arrange for a credit entity satisfactory to Lender (hereinafter
defined) to replace WHSLC Realty, L.L.C. ("WHSLC") as the guarantor under the
Shreveport Loan. Simultaneously with, or prior to, its execution of this
Contract, Buyer shall pay to the Escrow Agent (as defined in Section 6(a)) the
sum of Twelve Thousand Five Hundred Dollars ($12,500) as the xxxxxxx money
deposit (the "XXXXXXX MONEY"). The Xxxxxxx Money shall be held in escrow
pending closing. Buyer may, at its option, direct Escrow Agent to invest the
Xxxxxxx Money in a federally-insured interest-bearing account designated by
Buyer and approved by Seller. All interest which has accrued on the Xxxxxxx
Money shall be paid to Buyer, except that if closing is not consummated,
interest on the Xxxxxxx Money shall be paid to the party entitled to the Xxxxxxx
Money pursuant to the terms hereof. The Xxxxxxx Money shall be applied to the
Purchase Price (with the balance of the Xxxxxxx Money returned to Buyer) or
otherwise paid to Seller and/or Buyer as provided for herein.
3. SHREVEPORT ASSUMED DEBT. The Shreveport Loan is part of a $55,000,000
credit facility to Seller and affiliates of Seller (the "CREDIT FACILITY") that
is cross-defaulted and cross-collateralized. Accordingly, the Facility is
subject to a mortgage lien which secures not only the Shreveport Loan (the
"EXISTING DEBT"), as described in the loan documents listed in Exhibit B hereto
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(the "SHREVEPORT LOAN DOCUMENTS"), but also certain additional loans (the "OTHER
DEBT") which are secured by both the Facility and other facilities and
collateral (the "OTHER FACILITIES"), and which are described in other loan
documents evidencing or securing the Other Debt (the "OTHER LOAN DOCUMENTS").
The holder of the Existing Debt shall hereinafter be referred to as "LENDER".
Buyer acknowledges that it is the parties' expectation that the Existing Debt
will be assumed by Buyer and that Buyer will acquire the Facility subject to the
Existing Debt and any liens encumbering the Facility and securing the Existing
Debt, but that the Existing Debt, the Facility and the Shreveport Loan Documents
shall not be cross-defaulted or cross-collateralized with (and shall otherwise
be completely severed from) the Other Debt, the Other Facilities or the Other
Loan Documents. It is also the parties' expectation that prior to closing, the
parties will obtain (1) an estoppel certificate of Lender, certifying to Buyer
and Seller (i) the amount of the Existing Debt; (ii) the balance in any impound
and reserve accounts held by Lender, (iii) that the Lender has not given a
written notice of default in respect of the Existing Debt or the Credit
Facility, except for written notice of any default which was subsequently cured,
or waived by Lender, or which will be cured, or waived by Lender, upon closing
hereunder and (iv) that Seller has performed all of the Obligations (as defined
in that certain Completion Guaranty Agreement, dated as of May 15, 1999, by
WHSLC for the benefit of Lender); provided, however, that in the event that the
estoppel certificate does not provide the certification set forth in this clause
(iv), Seller shall be deemed to have made the certification set forth in this
clause (iv), such certification shall be deemed for all purposes a
representation and warranty of Seller made under Section 7(a) of this Contract
and the condition that the estoppel certificate from Lender contain the
certification set forth in this clause (iv) shall be deemed satisfied), and (2)
the approval of Lender for: (i) the conveyance of the Facility to Buyer subject
to the Existing Debt; (ii) the assumption of such Existing Debt by Buyer on
terms and conditions substantially the same as those set forth in the documents
which evidence and secure the Existing Debt, including, without limitation, if
Emeritus Corporation is not the grantee, the substitution of Emeritus
Corporation or another credit entity acceptable to Lender as the guarantor;
(iii) the release of Seller and WHSLC from any liability or obligation in
respect of the Existing Debt from and after the Closing Date (except for a
guaranty of a portion of the Existing Debt, which guaranty may be delivered by
Seller to Lender at closing to induce Lender to give the Required Consent, on
such terms, if any, as may be acceptable to Seller and Lender), (iv) the
modification of the Shreveport Loan Documents and the Other Loan Documents so
that the Existing Debt, the Facility and the Shreveport Loan Documents shall not
be cross-defaulted or cross-collateralized with (and shall otherwise be
completely severed from) the Other Debt, the Other Facilities or the Other Loan
Documents and (v) the modification of representations and warranties in the
Shreveport Loan Documents and the Other Loan Documents, to the extent necessary
to reflect the change in the identity of the borrower and guarantor thereunder
resulting from the assumption, substitution, release and modification (the
estoppel certificate and the approval described in (1) and (2) above being
collectively referred to as the "REQUIRED CONSENT"). During the Feasibility
Period, and thereafter (if necessary), the parties will cooperate in good faith
and Buyer will promptly (and in any event within three (3) Business Days from
the receipt of a request from Seller or Lender) provide Seller and Lender with
all information reasonably requested by Lender to make a decision as to whether
to approve the assumption, substitution, release and modification. Buyer shall
use commercially reasonable efforts to assist Seller and WHSLC in obtaining
their release from liability under the Existing Debt. Except as provided in the
last sentence of this paragraph, Buyer shall comply with all commercially
reasonable conditions precedent to the effectiveness of the Required Consent,
including, without limitation, assuming WHSLC's guaranty obligations under the
Existing Debt. Provided that the Required Consent is obtained, Buyer shall
assume the Existing Debt which shall hereafter be referred to as the "ASSUMED
DEBT" and Seller shall pay at closing all of Lender's out-of-pocket costs and
expenses in connection with the assumption, substitution, release and
modification. In no event shall either Buyer or Seller be required to pay an
assumption fee.
4. SELLER'S FUNDING OF OPERATING LOSSES
(a) Buyer acknowledges that the Facility is currently operating at a loss
and may continue to do so. To induce Buyer to purchase the Facility, Seller has
agreed to fund operating losses (calculated in accordance with generally
accepted accounting principals ("GAAP") and including as facility expenses debt
service and a management fee in the amount of five percent (5%) of Gross
Revenues (hereinafter defined))(the "OPERATING LOSSES"), up to the amounts and
under the terms, conditions and limitations specified on Exhibit C (the
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"OPERATING LOSS CAPS"). The term "GROSS REVENUES" means all revenues generated
by the operation of the Facility, but shall not include proceeds from the sale
of the Facility or the Facility's equipment. There is, as stated on Exhibit C,
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(i) an Operating Loss Cap applicable to the first 365-day period following the
Closing Date ("FIRST 365-DAY PERIOD"), (ii) an Operating Loss Cap applicable to
the 366-day period (2004 being a leap year) following the first anniversary of
the Closing Date ("SECOND 365-DAY PERIOD," and together with the First 365-Day
Period, the "365-DAY PERIODS"), and (iii) an aggregate Operating Loss Cap
comprising the maximum aggregate Operating Losses which Seller is liable for
hereunder. All Operating Losses shall be calculated monthly as described below.
No Operating Losses shall be funded in respect of any period after the end of
the Second 365-Day Period.
(b) To calculate the amount of Operating Losses required to be funded by
Seller under this Contract, Buyer shall provide Seller with a monthly report
("MONTHLY REPORT") in the form set forth on Schedule 4(b) setting forth the
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income and expenses for the Facility, together with (i) the current month's
profit or loss for the Facility, (ii) the year to date profit or loss for the
Facility, (iii) the aggregate funding that has been made under this Section 4,
and (iv) the amount remaining in the Operating Loss Account (as hereinafter
defined). The information contained in the report shall be determined in
accordance with GAAP. Seller shall have the right to audit Buyer's Monthly
Reports at Seller's sole cost and expense upon reasonable notice and during
normal business hours. In the event that a Monthly Reimbursement is not paid to
Buyer when due under this Section 4, Seller shall pay interest at the rate of
twelve percent (12%) per annum on any amounts not paid when due. Within thirty
(30) days after Seller receives the Monthly Report for a month ending during a
365-Day Period, Seller shall fund to Buyer in the form of a reimbursement check
paid to the order of Buyer an amount determined by subsection (c) below (each, a
"MONTHLY REIMBURSEMENT").
(c) To determine the amount of each Monthly Reimbursement, Buyer and Seller
shall establish two ledger accounts (each, an "OPERATING LOSS ACCOUNT"), one for
the First 365-Day Period (the "FIRST OPERATING LOSS ACCOUNT") and one for the
Second 365-Day Period (the "SECOND OPERATING LOSS ACCOUNT"). The First
Operating Loss Account shall be credited at the closing with the First Year
Operating Loss Cap set forth in Exhibit C. The First Operating Loss Account
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shall be debited with each amount funded under this subsection by Seller in
respect of each period during the First 365-Day Period. The Second Operating
Loss Account shall be credited at the closing with the Second Year Operating
Loss Cap set forth in Exhibit C. The Second Operating Loss Account shall be
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debited with each amount funded under this subsection by Seller in respect of
each period during the Second 365-Day Period. The amount of each Operating Loss
Account shall never be less than zero. The amount of each Monthly Reimbursement
in respect of each month during the First 365-Day Period shall equal the least
of the following amounts: (i) the Operating Losses for the Facility for the
month to which the Monthly Report relates, (ii) the Operating Losses for the
Facility from the commencement of the First 365-Day Period to the end of the
month to which the Monthly Report relates, less any amount previously debited
from the First Operating Loss Account or (iii) the balance in the First
Operating Loss Account. The amount of each Monthly Reimbursement in respect of
each month during the Second 365-Day Period shall equal the least of the
following amounts: (i) the Operating Losses for the Facility for the month to
which the Monthly Report relates, (ii) the aggregate Operating Losses for the
Facility from the commencement of the Second 365-Day Period to the end of the
month to which the Monthly Report relates, less any amount previously debited
from the Second Operating Loss Account or (iii) the balance in the Second
Operating Loss Account.
(d) Horizon Bay Management, L.L.C. ("HBM") shall execute at closing a
guaranty substantially in the form of Exhibit J (the "GUARANTY OF OPERATING
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LOSSES"), guaranteeing payment of Seller's obligation to fund Operating Losses,
provided that in no event shall HBM and Seller, collectively, be obligated to
fund Operating Losses of more than the Operating Loss Cap.
(e) Notwithstanding anything to the contrary in this Section 4, the maximum
aggregate liability of Seller under this Section 4 and HBM under the guaranty
described in subsection (d) shall not exceed $302,000.
(f) Reference is made to that certain Sale Contract dated April 4, 2002, by
and between (i) Integrated Living Communities of Alexandria, L.L.C., Integrated
Living Communities of Lake Xxxxxxx, L.L.C., Integrated Living Communities of
Lafayette, L.L.C., Integrated Living Communities of Xxxxxxxxx, X.X., Integrated
Living Communities of Oakwell, L.P., Integrated Living Communities of San
Antonio, L.P., and Integrated Living Communities of XxXxxxxx, X.X. and (ii)
Buyer (the "OTHER CONTRACT"). In the event that (i) the Operating Losses (as
defined in the Other Contract) for the Facilities (as defined in the Other
Contract) for the First 365-Day Period (as defined in the Other Contract) exceed
the aggregate of First Year Operating Loss Caps set forth in Exhibit B to the
Other Contract (such excess being referred to as the "OTHER CONTRACT FIRST YEAR
SHORTFALL") and the balance in the First Operating Loss Account (as defined in
the Other Contract) is zero and (ii) the First Year Operating Loss Cap set forth
in Exhibit C to this Contract exceeds the Operating Losses under this Section
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for the Facility for the First 365-Day Period (such excess being referred to as
the "SHREVEPORT FIRST YEAR EXCESS"), Seller shall pay to Buyer an amount equal
to the lesser of (i) the Other Contract First Year Shortfall or (ii) the
Shreveport First Year Excess. In the event that (i) the Operating Losses (as
defined in the Other Contract) for the Facilities (as defined in the Other
Contract) for the Second 365-Day Period (as defined in the Other Contract)
exceed the aggregate of Second Year Operating Loss Caps set forth in Exhibit B
to the Other Contract (such excess being referred to as the "OTHER CONTRACT
SECOND YEAR SHORTFALL") and the balance in the Second Operating Loss Account (as
defined in the Other Contract) is zero and (ii) the Second Year Operating Loss
Cap set forth in Exhibit C to this Contract exceeds the Operating Losses under
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this Section for the Facility for the Second 365-Day Period (such excess being
referred to as the "SHREVEPORT SECOND YEAR EXCESS"), Seller shall pay to Buyer
an amount equal to the lesser of (i) the Other Contract Second Year Shortfall or
(ii) the Shreveport Second Year Excess. Seller shall make payments under this
Section within thirty (30) days after Seller's receipt of a substantiated notice
from Buyer that a payment is due. For purposes of this Contract and the
Guaranty of Operating Losses, any payment under this subsection shall be deemed
to be a funding of Operating Losses under this Contract and, therefore, shall be
guaranteed by HBM pursuant to the Guaranty of Operating Losses (subject,
however, to all of the terms, conditions and limitations thereof).
5. EFFECTIVE DATE. The effective date of this Contract ("EFFECTIVE DATE")
shall be the later of the date that this Contract is executed by Seller or
Buyer, which is the date set forth in the preamble to this Contract.
6. CLOSING:
(a) Closing Date and Escrow. On May 1, 2002 (the "CLOSING DATE"), Seller
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and Buyer are required and agree to make full settlement in accordance with the
provisions of this Contract. The Deed (as defined in Section 6(b)(i)) and all
other closing documents shall be executed and delivered in escrow to the Escrow
Agent by each party required to execute such documents. On the morning of the
Closing Date, Seller shall effect a wire transfer of federal funds to the Escrow
Agent's escrow account in an amount equal to the sum of (i) the assumption
costs and expenses (if any) to be paid by Seller pursuant to Section 3; and (ii)
the amount (if any) of the other costs, expenses and adjustments payable by
Seller under this Contract. After the Escrow Agent's receipt of the wire
transfer of funds and immediately following the satisfaction (or waiver under
Section 12 hereof) of the conditions precedent to closing set forth in Section
12 hereof, the Escrow Agent shall (i) disburse to Seller the Purchase Price,
(ii) disburse to Buyer an amount equal to the Xxxxxxx Money and interest accrued
thereon reduced by the Purchase Price and any costs, expenses and adjustments
payable by Buyer under this Contract, (iii) deliver to Buyer all other documents
and instruments received by it which, in accordance with the terms of this
Contract or any separate escrow instructions prepared by Buyer, are to be
delivered by Seller to Buyer on the Closing Date, and (iv) deliver to Seller all
other documents and instruments received by it which, in accordance with the
terms of this Contract or any separate escrow instructions prepared by Seller,
are to be delivered by Buyer to Seller on the Closing Date. For purposes of
this Contract, the term "ESCROW AGENT" shall mean Title Network, Ltd., 0000
Xxxxxxx Xxxx Xxxxx, Xxxxx 000, Xxxxx, Xxxxx 00000 (Attention: Xx. Xxx Xxxxx
(telephone number: (000)000-0000, fax number (000) 000-0000)).
(b) Seller's Deliveries: On the Closing Date, Seller shall deliver to Buyer
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(through the Escrow Agent) the following:
(i) a deed (the "DEED") in the form attached hereto as Exhibit D, duly
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executed and acknowledged by Seller and in proper form for recording, conveying
the Real Property to Buyer;
(ii) an Assignment and Assumption of Occupancy Agreements, in the form of
Exhibit E, duly executed by Seller, conveying the Occupancy Agreements to Buyer;
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(iii) an Assignment of Licenses, Intangibles (including Trade Name) and
Warranties, in the form of Exhibit F, duly executed by Seller, conveying the
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Assignable Licenses, the Trade Name and other intangibles and warranties to
Buyer;
(iv) an Assignment and Assumption of Operating Contracts, in the form of
Exhibit G, duly executed by Seller, conveying the Assumed Operating Contracts to
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Buyer;
(v) a Xxxx of Sale, in the form of Exhibit H, duly executed by Seller,
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conveying the Tangible Personal Property to Buyer;
(vi) letters duly executed by Seller, advising each of the residents and
tenants under the Occupancy Agreements of the change in operation of the
Facility;
(vii) a schedule of all security deposits which have been deposited by the
residents and tenants under the Occupancy Agreements, in accordance with Section
6(d)(iv);
(viii) a copy of each Assumed Operating Contract (hereinafter defined), all
warranties and Assignable Licenses, each to the extent to be assumed by Buyer
hereunder and in Seller's possession;
(ix) a certification as to Seller's non-foreign status which complies with
the provisions of Section 1445(b)(2) of the Internal Revenue Code of 1986, as
amended, duly executed by Seller;
(x) to the extent permitted by law, all resident, tenant and employee (only
for employees who will be hired by Buyer) files which are in Seller's
possession;
(xi) a closing statement between Seller and Buyer, duly executed by Seller,
setting forth the prorations and adjustments to the Purchase Price respecting
the Facility to be made pursuant to Section 6(d); and
(xii) evidence of the termination, effective as of the Closing Date, of the
Facility's Management Agreement with HBM;
(xiii) a Guaranty of Operating Losses, in the form of Exhibit J, duly
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executed by HBM; and
(xiv) a Guaranty of Representations and Warranties, in the form of Exhibit
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K, duly executed by HBM.
(c) Buyer's Deliveries. On the Closing Date, Buyer shall pay the Purchase
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Price and shall deliver to Seller the following:
(i) a closing statement between Seller and Buyer, duly executed by Buyer,
setting forth the prorations and adjustments to the Purchase Price respecting
the Facility to be made pursuant to Section 6(d);
(ii) an Assignment and Assumption of Occupancy Agreements, in the form of
Exhibit E, duly executed by Buyer, assuming the Occupancy Agreements;
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(iii) to the extent required by Lender, a guaranty duly executed by Buyer or
other credit entity acceptable to Lender, in substantially the form of guaranty
originally executed by WHSLC; and
(iv) an Assignment and Assumption of Operating Contracts, in the form of
Exhibit G, duly executed by Buyer, assuming the Assumed Operating Contracts.
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(d) Adjustments. The following items of expense shall be adjusted as of
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11:59 p.m. on the day immediately preceding the Closing Date:
(i) Real estate and other municipal and local assessments with respect to
the Real Property. If the Closing Date shall occur before the tax rate or
assessment is fixed for the tax year in which the Closing Date occurs, the
apportionment of taxes shall be upon the basis of the tax rate or assessment for
the preceding year applied to the latest assessed valuation and Seller and
Buyer shall readjust real estate taxes promptly upon the fixing of the tax rate
or assessment for the tax year in which the Closing Date occurs;
(ii) Fuel, water and sewer service charges, and charges for gas, electricity
and all other public utilities servicing the Facility;
(iii) The rent payable by residents and tenants under the Occupancy
Agreements shall be adjusted, and any such rent prepaid to Seller (including a
pro rata portion of the rent paid for the month in which the closing occurs)
shall be paid to Buyer at closing. Rent which is due but uncollected as of the
Closing Date shall not be adjusted and Seller shall retain their right, title
and interest in and to all unpaid accounts receivable with respect to the
Facility which relate prior to the Closing Date. Any rents collected from a
resident or tenant after the Closing Date who owes delinquent rent as of the
Closing Date shall be applied (x) first, to then current rents accruing after
the Closing Date, (y) second, to delinquent rents payable after the Closing
Date, and (z) finally, to delinquent rents payable prior to the Closing Date.
Notwithstanding the immediately preceding sentence, Buyer shall honor any
request from a resident or tenant to apply rent to a particular delinquency.
Buyer shall promptly remit delinquent rent to which Seller is entitled hereunder
to Seller, but in any event, within five (5) Business Days after receipt
(provided that if a resident or tenant includes in a single payment rent to
which both Seller and Buyer are entitled, Buyer shall have up to forty-five (45)
days to remit the required rent). After the closing, Buyer shall cooperate with
Seller's efforts to collect Seller's accounts receivable by providing Seller
access, upon reasonable prior notice and during normal business hours, to
documents and other information reasonably requested by Seller. Nothing herein
shall be deemed to limit in any way Seller's rights and remedies to recover
accounts receivable due and owing to Seller under the terms of this Contract,
including, without limitation, instigating litigation, provided that such
litigation shall not result in the eviction of any Facility residents or
tenants;
(iv) Seller shall deliver to Buyer on the Closing Date a schedule of all
security deposits which have been deposited by residents and tenants under, and
not previously applied in accordance with, the Occupancy Agreements. All
security deposits required to be held by Seller under the Occupancy Agreements,
and not applied by Seller prior to closing in accordance with the Occupancy
Agreements, shall be transferred and delivered to Buyer on the Closing Date;
(v) All charges payable with respect to the Assumed Operating Contracts to
be assumed by Buyer hereunder. In addition, if Buyer shall have requested,
Seller shall exercise any right it may have to purchase any equipment located at
the Facility that is subject to an equipment Operating Contract, in which case
Buyer shall credit Seller with such purchase price and such equipment shall be
included as part of the Tangible Personal Property;
(vi) Seller shall be entitled to keep any xxxxx cash maintained at the
Facility and Buyer shall replace such xxxxx cash with such xxxxx cash it deems
reasonably necessary or useful for the continued operation of the Facility;
(vii) The interest payable under the Assumed Debt shall be adjusted. All
impound and reserve accounts held by Lender shall be credited in Seller's favor;
and
(viii) If any of the items described in this Section 6(d) cannot be
apportioned at the closing because of the unavailability of information with
respect to the amounts which are to be apportioned or otherwise, or are
incorrectly apportioned at closing or subsequent thereto, such items shall be
apportioned or reapportioned, as the case may be, as soon as practicable after
the Closing Date or the date such error is discovered, as applicable. This
Section 6(d) shall survive the Closing Date for twelve (12) months.
(e) Employees.
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(i) Not later than ten (10) Business Days after the Effective Date, Seller
shall deliver to Buyer a schedule including the following information as of a
date which is not more than fifteen (15) days prior to the delivery date of such
schedule: (i) the name of all Facility-based employees, and (ii) their
positions, rates of pay and original hire dates. Seller shall update the
schedule described in the immediately preceding sentence on or about three (3)
Business Days prior to the Closing Date and shall promptly notify Buyer of any
material changes in such schedule. Seller will terminate the employment of each
of the Facility Employees (as defined below) as of the Closing Date.
(ii) Buyer agrees its acquisition of the Facility shall be structured in
such a manner that Seller shall not be required to give any Facility-based
employees notification under the Worker Adjustment and Retraining Notification
Act, 29 U.S.C. 2101, et seq. To this end, on or before the Closing Date,
Buyer shall offer to hire, on a probationary basis, at least seventy-five (75%)
percent of Seller's employees who are employed at the Facility as of the Closing
Date (the "FACILITY EMPLOYEES"). Any such offer of employment to a
Facility Employee by Buyer shall be to perform comparable services, in such
position as is comparable to the position such Facility Employee held with
Seller as of the closing, provided that Buyer may offer compensation to such
Facility Employees at levels commensurate with compensation levels paid to other
employees of Buyer holding comparable positions, and provided further that any
change in compensation levels does not result in any constructive discharge of
any such Facility Employee. Seller shall have the right (but not the
obligation) to employ or offer to employ any Facility Employee who declines
Buyer's offer of employment.
(iii) Buyer shall hire at the closing, on a probationary basis, each
Facility Employee who elects to accept employment with Buyer in accordance with
the terms of Section 6(e)(ii), above (all of such employees who accept
employment with Buyer being herein called the "HIRED EMPLOYEES").
(iv) Seller shall pay to each Facility Employee, on that date which, but for
the closing, would have been the next regularly scheduled payroll date for such
employee following the closing or sooner if required by law, an amount equal to
any and all salary or benefits earned and accrued by such employee, as of the
Closing Date in accordance with Seller's policies.
(v) Nothing in this Section 6(e) shall create any rights in favor of any
person not a party hereto, including the Facility Employees, or constitute an
employment agreement or condition of employment for any employee of Seller or
any affiliate of Seller.
(f) Insurance. As of the Closing Date, Buyer is solely responsible for
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obtaining and the cost and expense of all insurance related to the Facility,
including, without limitation, such insurance as may be required by Lender.
7. REPRESENTATIONS AND WARRANTIES.
(a) Representations of Seller. Seller represents and warrants to Buyer
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that:
(i) Organization and Authorization. Seller is an entity duly organized and
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in good standing in the state of its organization and is duly qualified to do
business and in good standing in the state in which the Facility is situated.
The individual executing this Contract on behalf of Seller is duly authorized to
execute this Contract on behalf of Seller. The execution and delivery of
this Contract and the performance of all obligations of Seller hereunder have
been duly authorized by all entity action of Seller.
(ii) No Conflicting Agreements. The transfer and delivery by Seller of the
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Facility to Buyer as provided hereunder and the performance by Seller of its
obligations under this Contract will not conflict with or result in the breach
of any of the terms of any agreement or instrument to which Seller is a party.
(iii) FIRPTA. Seller is not a "foreign person" within the meaning of the
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United States tax laws and to which reference is made in Internal Revenue Code
Section 1445(b)(2).
(iv) No Consents. With the exception of the Required Consent, Seller is not
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aware of any consents required for the performance of Seller's obligations
hereunder.
(v) Condemnation. As of the Effective Date, Seller has not received any
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written notice of any pending or threatened condemnation of all or any portion
of the Facility.
(vi) Litigation. Seller has not received written notice of any litigation
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that is pending or threatened with respect to the Facility, except (A)
litigation fully covered by insurance policies (subject to customary
deductibles); or (B) litigation set forth in Schedule 7(a)(vi).
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(vii) Bankruptcy. Seller has neither filed nor been the subject of any
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filing of a petition under the federal bankruptcy law or any federal or state
insolvency laws or laws for consumption of indebtedness or for the
reorganization of debtors.
(viii) Operating Statements. The Operating Statements, as defined below,
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are the operating statements used in Seller's ordinary course of business and,
to Seller's knowledge, are in accordance with the books and records of Seller.
The Operating Statements do not materially misstate the Facility's income and
expenses for the applicable periods set forth therein.
(ix) Structural. To Seller's knowledge, Seller does not have any structural
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reports respecting the Facility in its possession or control.
(x) Compliance with Laws; Environmental. To Seller's knowledge, as of the
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Effective Date, Seller has not received any notice (whether written or oral)
from any governmental authority that all or any portion of the Facility is in
material violation of any applicable building codes or any applicable
environmental law (relating to clean-up or abatement), zoning law or land use
law relating to the Facility, which material violation has not been cured or
remedied in accordance with applicable law prior to the Effective Date.
(xi) Operating Contracts. Attached hereto as Schedule 7(a)(xi) is a
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schedule of all of the current service, maintenance and equipment contracts and
leases related to the operation of the Facility, excluding Seller's management
agreements with HBM (which shall be terminated as of the Closing Date), of which
Seller has knowledge. Except for any Operating Contracts on Schedule 7(a)(xi)
-----------------
described specifically as an equipment lease, there is, to Seller's knowledge,
no leased equipment at the Facility.
(xii) Occupancy Agreements. All of the tenants or residents at the Facility
--------------------
occupy their respective premises under Occupancy Agreements which are
substantially in the form provided to Buyer under the provisions of Section
8(d)(ii) hereof. The security deposit schedule to be provided to Buyer by
Seller under Section 6(b)(vii) hereof is materially accurate. There are no
"life care" provisions in any Occupancy Agreement. The Facility does not
participate in any "third party payor" program.
(xiii) Unions. Seller is not a party to any contract or agreement with any
------
labor union nor does Seller have any knowledge of union organizing activities at
the Facility.
(xiv) No Default under Existing Debt. As of the Effective Date, Seller is
--------------------------------
not in monetary default of its obligations under the Credit Facility, including
any obligations in respect of the Existing Debt, and Seller has not received a
written notice of default from Lender (which default is uncured as of the date
hereof).
Except as expressly set forth in this Contract, it is understood and agreed
that Seller is not making and has not at any time made any warranties or
representations of any kind or character, express or implied, with respect to
the Facility, including any warranties or representations as to habitability,
merchantability, or fitness for a particular purpose or any other matter or
thing regarding the Facility. Except as expressly set forth in this Contract,
Buyer acknowledges and agrees that upon closing, Seller shall sell and convey to
Buyer, and Buyer shall purchase and accept the Facility "as is, where is, with
all faults." Except as expressly set forth in this Contract, Buyer shall rely
solely on its own investigation with respect to the Facility, including the
Facility's physical, environmental or economic condition, compliance or lack
thereof with any law. Except as expressly set forth in this Contract, in
addition to, and not by way of limitation of, the sale of the Facility on an AS
IS CONDITION WITH ALL FAULTS basis under this Contract, Buyer acknowledges that
Seller makes no representations or warranties whatsoever to Buyer regarding the:
(i) physical condition of the Facility; or (ii) presence or absence of hazardous
or toxic materials or chemicals in, at, or under the Facility.
References in this Contract to the "KNOWLEDGE" of Seller shall refer only to the
actual knowledge (as opposed to constructive, deemed or imputed knowledge) of
the Designated Employees (as hereinafter defined) after reasonable inquiry has
been made of the appropriate regional and/or Facility personnel, and shall not
be construed, by imputation or otherwise, to refer to the knowledge of Seller,
or any affiliate of Seller, to any property manager, or to any other trustee,
officer, agent, manager, representative or employee of Seller or any affiliate
thereof or to impose upon such Designated Employees any duty to investigate the
matter to which such actual knowledge, or the absence thereof, pertains other
than the duty of inquiry described herein. As used herein, the term "DESIGNATED
EMPLOYEES" shall refer to Thilo D. Best (President and C.E.O.), Xxx X. XxXxxx
(Senior V.P. and C.F.O.), Xxxx Xxxxxxxx (Senior V.P. of Assisted Living), and
Xxx Xxxxxxxx (Regional V.P. of Operations -- South).
(b) Buyer's Independent Investigations. Buyer acknowledges that it is being
----------------------------------
given the full opportunity to inspect and investigate each and every aspect
of the Facility during the Feasibility Period, either independently or through
agents, representatives or experts of Buyer's choosing, as Buyer considers
necessary or appropriate, and, if applicable, its failure to give the
Termination Notice (as defined in Section 8(c)) will conclusively evidence
Buyer's complete satisfaction with such independent investigation subject to the
specific sections of this Contract described below. Buyer has sufficient
knowledge and experience in financial and business matters to enable it to
evaluate the merits and risks of acquiring the Facility. Such independent
investigation by Buyer includes, without limitation:
(i) the physical condition of the Real Property, including, without
limitation, the interior, the exterior, the square footage of each tenant space
therein, the structure, the roof, the paving, the utilities, and all other
physical and functional aspects of the Real Property, including the presence or
absence of Hazardous Materials. "HAZARDOUS MATERIALS" shall mean materials,
wastes or substances that are (A) included within the definition of any one or
more of the terms "hazardous substances," "hazardous materials," "toxic
substances," "toxic pollutants," and "hazardous waste" in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended (42
U.S.C. 9601, et seq.), the Resource Conservation and Recovery Act of 1976 (42
U.S.C. 6901, et seq.), the Clean Water Act (33 U.S.C. 1251, et seq.), the
Safe Drinking Water Act (14 U.S.C. 1401, et seq.), the Hazardous Materials
Transportation Act (49 U.S.C. 1801, et seq.), and the regulations promulgated
pursuant to such laws; (B) regulated or classified as hazardous or toxic, under
federal, state or local environmental laws or regulations; (C) petroleum; (D)
asbestos or asbestos-containing materials; (E) polychlorinated biphenyls; (F)
flammable explosives; or (G) radioactive materials;
(ii) contracts, operating leases, and any other documents or agreements of
significance affecting the Facility;
(iii) Occupancy Agreements with respect to the Facility and all matters in
connection therewith, including, without limitation, the ability of the
residents and tenants thereto to pay the rent;
(iv) all matters relating to the income and operating or capital expenses of
the Facility and all other financial matters;
(v) the Existing Debt documents; and
(vi) all other matters of significance affecting, or otherwise deemed
relevant by Buyer with respect to, the Facility.
(c) Release. Without limiting the provisions of this Section 7, Buyer
-------
waives its right to recover from, and forever releases and discharges and
covenants not to xxx, Seller, Seller's affiliates, Seller's asset manager, the
partners, trustees, shareholders, controlling persons, directors, officers,
attorneys, employees and agents of each of them, and their respective heirs,
successors, personal representatives and assigns (each a "SELLER PARTY", and
collectively, the "SELLER PARTIES") with respect to any and all claims, whether
direct or indirect, known or unknown, foreseen or unforeseen, that may arise on
account of or in any way be connected with the Facility including, without
limitation, the physical, environmental and structural condition of the Real
Property or any law or regulation applicable thereto, including, without
limitation, any claim or matter relating to the use, presence, discharge or
release of Hazardous Materials on, under, in, above or about the Real Property;
provided, however, that the foregoing shall not restrict Buyer from
interpleading Seller in any action filed by a third party against Buyer relating
to Seller's ownership and operation of the Facility prior to closing and
Buyer does not waive its rights, if any, to recover from, and does not release
or discharge or covenant not to xxx Seller for (i) any act that is found by a
court of competent jurisdiction to constitute fraud, (ii) any breach of Seller's
representations or warranties set forth in Section 7(a), subject to the
limitations and conditions provided in this Contract, (iii) any breach of
Seller's obligations set forth in this Contract that expressly survive closing,
(iv) any matter which is the subject of an indemnity from Seller in a Closing
Document (hereinafter defined), subject to the limitations and conditions
provided in this Contract and such Closing Document, or (v) any breach by Seller
of Section 4 hereof.
(d) Waiver by Buyer. If Buyer, with knowledge of (i) a default in any of
-----------------
the covenants, agreements or obligations to be performed by Seller under this
Contract and/or (ii) any breach of or inaccuracy in any representation or
warranty of Seller made in this Contract nonetheless elects to proceed to
closing, then, upon the consummation of the closing, Buyer shall be deemed to
have waived any such default and/or breach or inaccuracy and shall have no claim
against Seller with respect thereto.
(e) Buyer's Representations. Buyer represents to Seller that:
------------------------
(i) Organization and Authorization. Buyer is an entity duly organized and
--------------------------------
in good standing in the state of its organization and is or prior to closing
will be duly qualified to do business and in good standing in the state in which
the Facility is situated. The individual executing this Contract on behalf
of Buyer is duly authorized to execute this Contract on behalf of Buyer. The
execution and delivery of this Contract and the performance of all obligations
of Buyer hereunder have been duly authorized by all entity action of Buyer.
(ii) No Conflicting Agreements. The acquisition of the Facility by Buyer as
-------------------------
provided hereunder and the performance by Buyer of its obligations under this
Contract will not conflict with or result in the breach of any of the terms of
any agreement or instrument to which Buyer is a party.
(f) Waiver by Seller. If Seller, with knowledge of (i) a default in any of
-----------------
the covenants, agreements or obligations to be performed by Buyer under this
Contract and/or (ii) any breach of or inaccuracy in any representation or
warranty of Buyer made in this Contract nonetheless elects to proceed to
closing, then, upon the consummation of the closing, Seller shall be deemed to
have waived any such default and/or breach or inaccuracy and shall have no claim
against Buyer with respect thereto.
(g) No Unintended Assumption of Liabilities. Except as expressly provided
-----------------------------------------
in this Contract or in any Closing Document, Buyer is not assuming any of the
liabilities or obligations of, or claims against, Seller of any kind or
character. The only transaction contemplated by this Contract is the sale and
purchase of the Facility. Seller is not selling a business. The parties intend
that Buyer shall not be deemed to be a successor of Seller with respect to any
of Seller's liabilities or obligations to third parties arising before the
Closing Date.
8. BUYER'S INSPECTIONS AND FEASIBILITY PERIOD.
(a) Buyer's Access. During the Feasibility Period, and prior to the TSZ
---------------
Objection Date (hereinafter defined), Seller shall give to Buyer and its
officers, directors, employees, agents, advisors, or representatives
("REPRESENTATIVES") complete access to the Facility during normal business hours
and after reasonable prior notice, for the purpose of performing any
reasonable tests and investigations, including, without limitation,
non-intrusive environmental and property condition tests and studies (intrusive
environmental testing shall require Seller's consent). Seller shall have the
right to accompany Buyer and/or its Representatives during any Buyer
investigation or testing. Buyer shall repair any damage to the Facility caused
by any entry upon the Facility by Buyer or its Representatives. Notwithstanding
any other provision of this Contract, the preceding sentence shall survive the
termination of this Contract for any reason and Buyer shall not be relieved of
its obligations under the preceding sentence by reason of any termination of
this Contract.
(b) Buyer's Indemnity. Buyer agrees to: (i) indemnify, defend, and hold
------------------
Seller, and any partner, officer, director, employee, agent or attorney of
Seller and any other party related in any way to any of the foregoing, free and
harmless from and against any and all costs, loss, damages and expenses, of any
kind or nature whatsoever (including attorneys' fees and costs) arising out of
or resulting from the entry and/or the conduct of activities upon the Facility
by Buyer or its Representatives and their employees, agents, representatives,
contractors, subcontractors or attorneys at the Facility or any breach of this
Section 8, whether arising prior to or after the Effective Date; and (ii)
deliver promptly to Seller copies of all third party reports commissioned by or
on behalf of Buyer which set forth the results of tests, studies and inspections
of the Facility. Notwithstanding any provisions of this Contract, the preceding
sentence shall survive the expiration or termination of this Contract.
(c) Feasibility Period. If, during the period between February 4, 2002, and
------------------
11:59 p.m Eastern Standard Time on the Effective Date (such period is
hereinafter referred to as the "FEASIBILITY PERIOD"), Buyer gives Seller written
notification (the "TERMINATION NOTICE") that Buyer elects not to consummate the
purchase of the Facility, this Contract shall terminate, the Xxxxxxx Money and
the interest thereon shall be returned to Buyer, and, except as otherwise
provided in the last sentence of Section 8(a) or 8(b), neither party shall have
any further liability to the other under this Contract. Buyer shall have the
absolute right, in its sole discretion, to determine whether to give the
Termination Notice. If Buyer elects not to give the Termination Notice prior to
the expiration of the Feasibility Period, this Contract shall remain in full
force and effect in accordance with, and subject to, its terms. In the event
that Buyer does not give the Termination Notice, Six Thousand Two Hundred Fifty
Dollars ($6,250) of the Xxxxxxx Money shall become non-refundable, except under
the circumstances described in Section 13 (Risk of Loss) and 17 (Condemnation),
and shall be credited against the Purchase Price (as it may be adjusted and
prorated herein (with any balance returned to Buyer)) on the Closing Date or
shall be paid to Seller upon any subsequent termination of this Contract in
accordance with its terms (subject to any express provisions of this Contract to
the contrary).
(d) Due Diligence Deliveries. Buyer acknowledges receipt prior to the
--------------------------
Effective Date of the following Delivered Materials, each of which Buyer will
have, prior to the end of the Feasibility Period, reviewed and approved (if and
to the extent it does not give the Termination Notice):
(i) a true and correct copy of the Existing Debt documents;
(ii) Facility's form of Occupancy Agreement;
(iii) Facility's most recent real property tax statements;
(iv) Facility's governmental licenses and permits;
(v) Facility's historical occupancy data for calendar years 1999-2001;
(vi) Facility's marketing materials, including brochures;
(vii) Facility's operations organizational structure; and
(viii) Facility's statements of income and expenses of the Facility for
calendar years 1999 through 2001 (the "OPERATING STATEMENTS").
(e) Pursuit of Licenses. It shall be a condition precedent to Seller's and
--------------------
Buyer's obligation to close that Buyer shall have received all licenses and
governmental approvals necessary to operate the Facility. Buyer shall use its
commercially reasonable efforts to obtain all such licenses and permits as of
the earliest possible date but in any event, not later than immediately prior to
closing. To this end, Buyer shall submit complete license applications by
not later than one (1) Business Day after receiving a letter from Seller
authorizing such license application. Buyer shall provide Seller with a copy of
the license application and all correspondence with governmental authorities
regarding the license application. Seller shall cooperate, at no cost to
Seller, with Buyer's efforts to obtain the required licenses and permits.
(f) Operating Contracts. Seller agrees to deliver to Buyer on or prior to
--------------------
the Effective Date copies of the Operating Contracts. Prior to closing, Buyer
shall designate those Operating Contracts which Buyer elects to assume (each of
which shall constitute an "ASSUMED OPERATING CONTRACT") and all other Operating
Contracts shall be terminated by Seller as of the earliest termination date
possible, provided that Buyer shall be responsible for payment of all fees due
for the period after closing through the termination date of the Operating
Contract if Buyer receives the benefit of services under such terminated
Operating Contract (otherwise Seller shall be responsible for payment of all
such fees). Payment of all termination fees associated therewith shall be the
obligation of Seller.
9. INTERIM OPERATION OF THE PROPERTIES.
(a) General Operation. Except as otherwise contemplated or permitted by
------------------
this Contract or approved by Buyer in writing, from the Effective Date to the
Closing Date, Seller agrees that it will operate, maintain, repair, license, and
lease the Facility in the ordinary course, on an arm's length basis and
consistent with Seller's past practices and will not dispose of or encumber any
Facility, except for dispositions of personal property in the ordinary course of
business which personal property is promptly replaced with like-kind property,
or as otherwise permitted by this Contract. Without limiting the foregoing,
Seller shall, in the ordinary course, file all renewal applications for the
Facility licenses on a timely basis, enforce the Occupancy Agreements in all
material respects, perform in all material respects all of licensors' or
landlords' obligations under the Occupancy Agreements (other than Occupancy
Agreements that are in the process of being terminated due to a resident's or
tenant's default thereunder), pay all costs and expenses of the Facility which
are Seller's responsibility to pay, and perform all material obligations under
the Existing Debt. Seller shall promptly provide Buyer during the pendency of
this Contract with a copy of any renewal application for Facility licenses and
any final Facility surveys.
(b) Contracts. Seller agrees that, without Buyer's prior written consent
---------
(such consent not to be unreasonably withheld, conditioned or delayed), Seller
will not enter into any Operating Contract affecting the Facility if such
Operating Contract cannot be terminated on thirty (30) days' notice or less
without penalty.
(c) Maintenance. Between the Effective Date and the Closing Date, Seller
-----------
shall (i) maintain the Facility in substantially the same manner as prior hereto
pursuant to Seller's normal course of business, subject to reasonable wear and
tear and further subject to the occurrence of any damage or destruction to the
Real Property by casualty or other causes or events beyond the control of
Seller; provided, however, that Seller's maintenance obligations under this
subsection shall not include any obligation to make capital expenditures not
incurred in Seller's normal course of business or any other expenditures not
incurred in Seller's normal course of business; (ii) continue to maintain its
existing insurance coverage; and (iii) not grant any voluntary liens or
encumbrances affecting the Facility.
10. TITLE. Seller does not make any representations, warranties or
covenants concerning title to the Real Property except that after the Effective
Date, Seller shall not execute any deed, easement, restriction, covenant or
other matter affecting title to the Real Property (other than Occupancy
Agreements) unless Buyer has received a copy thereof and has expressly approved
the same in writing (such approval will not be unreasonably withheld,
conditioned or delayed). Prior to April 29, 2002 (the "TSZ OBJECTION DATE"),
Buyer shall obtain, at its sole cost and expense, from any nationally recognized
title insurance company (the "TITLE COMPANY") a title insurance commitment
for the Facility (the "TITLE COMMITMENT") and shall have the right to obtain, at
its sole cost and expense, (i) a land survey for the Facility ("SURVEY") and
(ii) a zoning letter from the municipality in which the Facility is located
stating the zoning designation of the area in which the Facility is located
("ZONING LETTER"). On or prior to the TSZ Objection Date, Buyer may provide
Seller with a written notice stating any specific matters (each, a "DISAPPROVED
MATTER") in the Title Commitment's exceptions, Survey, or Zoning Letter which
are unacceptable to Buyer. Seller shall have no obligation hereunder to cure
any Disapproved Matter and any failure of Seller to respond to Buyer's notice
shall be deemed an election not to cure a Disapproved Matter. Within one (1)
Business Day of its receipt of Buyer's notice, Seller shall notify Buyer in
writing of any Disapproved Matters which Seller is unwilling or unable to cause
to be removed or insured against prior to or at closing, and with respect to
such Disapproved Matters, Buyer shall then elect within one (1) Business Day of
its receipt of Seller's notice (or deemed receipt) (a) to terminate this
Contract and to receive a refund of one-half of the Xxxxxxx Money (the remaining
one-half of the Xxxxxxx Money to be delivered to Seller) or (b) to waive its
disapproval of such Disapproved Matters and, subject to the terms of this
Contract, to proceed to closing hereunder. Buyer's failure to respond to
Seller's notice shall be deemed an election to terminate this Contract under
clause (a) of the immediately preceding sentence. If Seller shall fail to cure
any Disapproved Matter prior to the Closing Date which it notified Buyer it
would cure and Buyer is unwilling to acquire the Facility subject thereto, Buyer
shall have the right to terminate this Contract and to receive the return of
one-half of the Xxxxxxx Money (the remaining one-half of the Xxxxxxx Money to be
delivered to Seller). Any easements, covenants, restrictions or exceptions of
record that are shown on the Title Commitment as of the TSZ Objection Date
together with (a) all laws, ordinances, statutes, orders, requirements and
regulations to which the Facility are subject, (b) all terms, conditions and
provisions of all oral or written leases of space (or other license or occupancy
agreements) for all or any portion of the Facility, (c) the preprinted
exceptions in the Title Commitment or Title Policy, and (d) any Title Commitment
requirements which are Buyer's responsibility to fulfill (such as providing the
Title Company with organizational and authorization documentation), but
specifically excluding any of the foregoing which become Disapproved Matters
which Seller has agreed to cure, are hereinafter referred to as "PERMITTED
EXCEPTIONS." It shall be a condition of Buyer's obligation to consummate
closing that at closing, at Buyer's expense, the Title Company will be prepared
to issue to Buyer an owner's title insurance policy for the Facility (ALTA 1992
form), subject only to the Permitted Exceptions (the "TITLE POLICY"). It shall
not be a condition precedent to closing that Buyer obtain any endorsements to
such Title Policy (or extended coverage).
11. COSTS. Buyer shall pay the cost of all premiums and charges in
connection with any title insurance issued to Buyer, the cost of preparing a
Facility land survey, all recording and filing charges in connection with the
Deed, one-half of all escrow charges due to the Escrow Agent and all costs of
Buyer's due diligence, including fees due its consultants. Seller shall pay
one-half of all escrow charges due to the Escrow Agent and any assumption costs
and expenses described in Section 3. Each party shall pay the fees and costs of
its own counsel.
12. CONDITIONS PRECEDENT TO CLOSING.
(a) Conditions to Buyer's Obligations. The obligations of Buyer to purchase
----------------------------------
the Facility from Seller and to perform the other covenants and obligations
to be performed by Buyer on the Closing Date shall be subject to the following
conditions (all or any of which may be waived in writing, in whole or in part,
by Buyer):
(i) Representations and Warranties True. The representations and warranties
-----------------------------------
made by Seller under this Contract shall be true and correct in all
material respects on the Effective Date and shall be true and correct in all
material respects on and as of the Closing Date with the same force and effect
as if such representations and warranties had been made on and as of the Closing
Date.
(ii) Seller's Performance. Seller shall have performed all covenants,
---------------------
agreements and delivered all documents required by this Contract to be performed
or delivered by it on or before the Closing Date.
(iii) Required Consent. Subject to the provisions of Section 3, on or prior
----------------
to the Closing Date, the Required Consent shall have been obtained upon
commercially reasonable terms and conditions; provided that Lender requiring
Emeritus Corporation to assume the same guaranty obligations in respect of the
Existing Debt as WHSLC has in respect of the Existing Debt shall be deemed to be
commercially reasonable, but Lender requiring Emeritus Corporation to pay any
fee or to undertake greater obligations than those reflected in the Existing
Debt shall not be deemed to be commercially reasonable.
(iv) Licenses. Buyer shall have received all licenses and governmental
--------
approvals necessary to operate the Facility and all such licenses shall be on
terms and conditions reasonably acceptable to Buyer (it being agreed that
Buyer's receipt of the same licenses currently held by Seller on terms and
conditions substantially similar to the terms and conditions under which Seller
hold such licenses (except that Buyer's license may include any customary
conditions subsequent imposed in connection with any transfer of ownership, such
as a post-closing survey) is deemed reasonably acceptable to Buyer).
(v) Title to Real Property. On the Closing Date, the Title Company shall be
----------------------
unconditionally obligated and prepared, subject to the payment by Buyer of the
applicable title insurance premiums and other related charges, to issue to Buyer
the Title Policy in accordance with the requirements of Section 10, provided
that Buyer shall have ordered the Title Commitment in accordance with the
requirements of Section 10.
(b) Conditions to Seller's Obligations. The obligations of Seller to sell
-------------------------------------
the Facility to Buyer and to perform the other covenants and obligations to be
performed by Seller on the Closing Date shall be subject to the following
conditions (all or any of which may be waived in writing, in whole or in part,
by Seller):
(i) Representations and Warranties True. The representations and warranties
-----------------------------------
made by Buyer under this Contract shall be true and correct in all material
respects on the Effective Date and shall be true and correct in all respects on
and as of the Closing Date with the same force and effect as if such
representations and warranties had been made on and as of the Closing Date.
(ii) Buyer's Performance. Buyer shall have performed all covenants,
--------------------
agreements and delivered all documents required by this Contract to be performed
or delivered by it on or before the Closing Date.
(iii) Licenses. Buyer shall have received all licenses and governmental
--------
approvals necessary to operate the Facility and all such licenses shall be on
terms and conditions reasonably acceptable to Buyer (it being agreed that
Buyer's receipt of the same licenses currently held by Seller on terms and
conditions substantially similar to the terms and conditions under which Seller
hold such licenses (except that Buyer's license may include any customary
conditions subsequent imposed in connection with any transfer of ownership, such
as a post-closing survey) is deemed reasonably acceptable to Buyer).
(iv) Required Consent. Subject to the provisions of Section 3, on or prior
-----------------
to the Closing Date, the Required Consent shall have been obtained, including,
without limitation, the release of Seller and WHSLC from liability under the
Existing Debt as of the Closing Date.
(c) Failure of Conditions Precedent. Subject to the terms of the next
----------------------------------
sentence, in the event that all conditions precedent for closing as specified in
Section 12(a) and (b) above are not fulfilled on the Closing Date (as the
same may be extended by written agreement of Seller and Buyer), the Escrow Agent
shall return all of Buyer's funds to Buyer and all documents to the party that
has delivered such documents to the Escrow Agent, except that the Xxxxxxx Money
shall be distributed to the party entitled to receive the Xxxxxxx Money in
accordance with the provisions of this Contract. In the event that the
conditions precedent in Sections 12(a)(iv) and 12(b)(iii) (the "LICENSE
CONDITION") are not satisfied on the Closing Date, Seller or Buyer may elect to
extend the Closing Date for a reasonable period of time, provided that in no
event shall the Closing Date be extended in the aggregate more than thirty (30)
days.
13. RISK OF LOSS. If, prior to the Closing Date, any Facility is damaged by
fire or by any other cause whatsoever, Seller shall promptly give Buyer
written notice of such damage.
(a) If the cost of repairing such damage is not in excess of Two Hundred
Fifty Thousand Dollars ($250,000) at the time of such casualty (as determined by
Seller's independent insurer), then (a) Buyer shall receive at the closing,
to the extent such sums have not been expended on repair work with the
reasonable approval of Buyer (except for emergency repairs, for which no
approval shall be required), the amount of the deductible plus the amount
necessary to repair any uninsured loss plus an assignment of all insurance
proceeds payable (but not yet paid) as a result of such loss, plus all insurance
proceeds received by Seller as a result of such casualty loss, (b) this Contract
shall continue in full force and effect with no reduction in the Purchase Price,
and (c) Seller shall have no obligation to repair such damage.
(b) If the cost of repairing damage from such casualty is equal to or
greater than Two Hundred Fifty Thousand Dollars ($250,000) at the time of such
casualty (as determined by Seller's independent insurer), then Buyer shall have
the right, for a period of ten (10) days from the date of notice of the amount
of damage caused by the casualty, to terminate this Contract by giving written
notice of termination to Seller within such period and the Closing Date shall be
extended if necessary to allow Buyer to have this full ten (10) day review
period. Upon such termination, the entire Xxxxxxx Money shall be returned to
Buyer and the parties hereto shall be released of any further liability
hereunder except as otherwise provided herein. If Buyer fails to notify Seller
within such period of Buyer's exercise of its right to terminate this Contract,
then Buyer shall proceed to closing subject to the terms and conditions hereof
and, to the extent such sums have not been expended on repair work with the
reasonable approval of Buyer (except for emergency repairs, for which no
approval shall be required), all insurance proceeds received by Seller as a
result of such casualty loss plus the amount of the deductible plus the amount
of any uninsured loss shall be paid to Buyer at the closing. To the extent such
proceeds have not yet been received by Seller, then Seller's rights to such
proceeds shall be assigned to Buyer at the closing upon payment of the full
Purchase Price to Seller by Buyer and Seller shall have no obligation to repair
such damage.
14. SELLER'S FAILURE TO PERFORM. If all of the conditions to Seller's
obligation to close have been satisfied or waived but Seller fails to perform
under this Contract when obligated to do so, Buyer may either (a) enforce
specific performance hereof, or (b) terminate this Contract and receive the
Xxxxxxx Money and, in the event of such termination, Buyer and Seller shall be
relieved of all obligations and liabilities under this Contract (except as
otherwise provided in this Contract). If Buyer elects subsection (a) from the
previous sentence, the parties shall continue this Contract pending Buyer's
action for specific performance, in which latter event Buyer, as a condition to
such action, shall not accept return of the Xxxxxxx Money.
15. BUYER'S FAILURE TO PERFORM. If all of the conditions to Buyer's
obligation to close have been satisfied or waived but Buyer fails to perform
this Contract when obligated to do so, the entire amount of the Xxxxxxx Money
shall be paid to and retained by Seller as fixed, agreed and liquidated damages,
and as Seller's exclusive remedy for such failure to perform, and Seller and
Buyer shall be relieved from all liabilities and obligations under this Contract
(except as otherwise provided in this Contract).
16. ATTORNEYS' FEES; COSTS. In connection with any litigation arising out
of this Contract, the prevailing party shall be entitled to recover reasonable
attorneys' fees and costs at both the trial and appellate levels.
17. CONDEMNATION. In the event of the institution, prior to closing of any
proceedings, judicial, administrative or otherwise, which relate to a taking or
proposed taking of any portion of the Real Property by eminent domain, Seller
shall immediately notify Buyer thereof. In the event of any such taking or
proposed taking which relates to more than five percent (5%) of the land area of
the Real Property, Buyer shall have the right to appear and defend such
condemnation proceedings, and in the event the closing occurs, any award in
condemnation shall, at Buyer's election, become the property of Buyer.
18. BROKERS AND AGENTS. Each of the parties represents to the other that it
has not retained or used the services of a broker or agent in connection with
this transaction. Each party agrees to indemnify and hold the other harmless
from any claims of brokers or agents for fees or commissions arising out of this
transaction attributable to a breach by such party of its representations under
this Section.
19. NOTICES. Any notice required or permitted to be given hereunder shall
be in writing and delivered by a nationally recognized overnight courier service
providing a receipt (such as Federal Express), by hand or by facsimile addressed
as follows: (i) if to Buyer: Emeritus Corporation, Attention: Xxxxxx X. Xxxx,
Chairman and CEO, 0000 Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, XX 00000, Tel. No.
000-000-0000, Fax No. 000-000-0000, with a copy to Xxxxx X. Xxxxxxxxx, Esquire,
The Xxxxxxxxx Group PLLC, 0000 Xxxxxx Xxxxxx, Xxxxx Xxxxx, Xxxxxxx XX 00000,
Tel. No. 000-000-0000, Fax No. 000-000-0000; if to Seller, c/o Horizon Bay
Management, L.L.C., Attention: Thilo D. Best, President and CEO, 000 X. Xxxxxx
Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, Tel. No. 000-000-0000, Fax No.
000-000-0000, with a copy to Whitehall Street Real Estate Limited Partnership
VII, Attention: Chief Financial Officer, 00 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, and with a copy to Xxxxxxx X. Xxxxx, Esquire, Arent Fox Xxxxxxx
Xxxxxxx & Xxxx, PLLC, 0000 Xxxxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X.
00000-0000, Tel. No. 000-000-0000; Fax No. 000-000-0000, or at any other address
designated by either party by notice to the other party pursuant to this Section
19. Notices shall be deemed given when received or when receipt is refused by
the party to whom it is addressed, if delivered by overnight courier service or
by hand or on the date the automatic acknowledgment indicates delivery was made
to the party to whom it is addressed, if sent by facsimile.
20. ENTIRE AGREEMENT. This Contract shall constitute the entire agreement
between the parties, and no prior verbal or written agreement of understanding
shall survive the execution of this Contract. In the event of any amendment or
modification of this Contract, the amendment or modification shall be in writing
signed by all the parties, or their agents, in order to be binding upon the
parties. This Contract, or a memorandum thereof, shall not be recorded among
the land records.
21. FURTHER ASSURANCES. Seller agrees that it will, at any time and from
time to time after the Closing Date, upon request of and at the sole cost and
expense of Buyer, do, execute, acknowledge and deliver, or will cause to be
done, executed, acknowledged and delivered, all such further acts, deeds,
assignments, transfers, conveyances and assurances as may reasonably be required
for the assigning, transferring, granting, assuring and confirming to Buyer, or
for aiding and assisting in collecting and reducing to possession, any or all of
the assets or property being sold to Buyer pursuant to this Contract, provided
that the same do not impose any liability on Seller beyond that provided in this
Contract or any document required to be executed by Seller pursuant to this
Contract (other than under this Section).
22. WAIVER OF JURY TRIAL. The parties hereto waive trial by jury in any
action, proceeding or counterclaim brought by any party against any other party
on any matter arising out of or in any way connected with this Contract.
23. BENEFIT AND BURDEN; LIABILITY. This Contract shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns. Buyer shall not assign its rights under this Contract
without Seller's prior written consent but Buyer shall have the right, without
Seller's consent but with notice to Seller, to designate any subsidiary to take
title to the Facility.
24. APPLICABLE LAW. This Contract shall be governed by and interpreted in
accordance with the laws of the State of Louisiana.
25. LIMITATIONS ON CLAIMS; SURVIVAL.
(a) Limitations on Buyer's Claims. Notwithstanding any provision to the
--------------------------------
contrary herein or in any document or instrument executed by Seller and
delivered to Buyer or its designee at or in connection with the closing
(collectively, "CLOSING DOCUMENTS"), Seller shall have no liability whatsoever
with respect to any suits, actions, proceedings, investigations demands, claims,
liabilities, fines, penalties, liens, judgments, losses, injuries, damages,
expenses or costs, including without limitation, attorneys' and experts' fees
and costs and investigation and remediation costs (collectively, "CLAIMS") under
any of the representations and warranties and indemnities contained in this
Contract or in any Closing Document, except to the extent that the aggregate
amount of all Claims for breach of Seller's representations and warranties and
indemnities exceeds $25,000 (the "THRESHOLD AMOUNT") (but if such Claim is valid
and is finally determined (or settled) to be in excess of the Threshold Amount,
then Seller's liability shall extend to the "first dollar" of Buyer's Claim(s));
provided, however, notwithstanding any provision to the contrary herein or in
any Closing Document, the total liability of Seller for any or all Claims with
respect to the Facility shall not exceed Two Hundred Thousand Dollars ($200,000)
(the "CAP AMOUNT"). Further, notwithstanding any provision to the contrary
herein or in any Closing Document, Seller shall have no liability with respect
to any Claim under any of the representations and warranties and indemnities
contained in this Contract or in any Closing Document, which Claim relates to or
arises in connection with (1) any Hazardous Materials (except solely to the
extent that Seller have breached their representation in Section 7(a)), (2) the
physical condition of the Facility (except solely to the extent that Seller has
breached its representation in Section 7(a)) or (3) any other matter not
expressly set forth in Seller's representations and warranties set forth in
Section 7(a) or their indemnities in any Closing Document. Buyer shall not make
any Claim or deliver any Claim Notice unless in good faith, it believes the
Claim would exceed the Threshold Amount as set forth above.
(b) Survival of Buyer's Claims. Except as otherwise specifically set forth
---------------------------
in this Contract, the representations and warranties and indemnities of Seller
contained herein or in any Closing Document shall survive only until the date
which is twelve (12) months after the Closing Date (the "SURVIVAL DATE"). Any
Claim that Buyer may have any time against Seller for breach of any such
representation, warranty or indemnity, whether known or unknown, with respect to
which a Claim Notice has not been delivered to Seller on or prior to the
--------
Survival Date, shall not be valid or effective. For the avoidance of doubt, on
the Survival Date, Seller shall be fully discharged and released (without the
need for separate releases or other documentation) from any liability or
obligation to the Buyer, Buyer's designee and/or their successors and assigns
with respect to any Claims or any other matter relating to this Contract, any
Closing Document or the Facility, except solely for those matters that are then
the subject of the pending Claim Notice delivered by Buyer to Seller.
(c) Limitations on Seller's Claims. Notwithstanding any provision to the
---------------------------------
contrary herein or in any document or instrument executed by Buyer and delivered
to Seller at or in connection with the closing (collectively, "BUYER CLOSING
DOCUMENTS"), Buyer shall have no liability whatsoever with respect to any Claims
under any of the representations and warranties and indemnities contained in
this Contract or in any Buyer Closing Document, except to the extent that the
aggregate amount of all Claims for breach of Buyer's representations and
warranties and indemnities exceeds the Threshold Amount (but if such Claim is
valid and is finally determined (or settled) to be in excess of the Threshold
Amount, then Buyer's liability shall extend to the "first dollar" of Seller's
Claim(s)); provided, however, notwithstanding any provision to the contrary
herein or in any Buyer Closing Document, the total liability of Buyer for any or
all Claims with respect to the Facility shall not exceed the Cap Amount.
Further, notwithstanding any provision to the contrary herein or in any Buyer
Closing Document, Buyer shall have no liability with respect to any Claim under
any of the representations and warranties and indemnities contained in this
Contract or in any Buyer Closing Document, which Claim relates to or arises in
connection with (1) any Hazardous Materials, (2) the physical condition of the
Facility or (3) any other matter not expressly set forth in Buyer's
representations and warranties set forth in Section 7(b) or its indemnities in
any Buyer Closing Document. Seller shall not make any Claim or deliver any
Claim Notice unless in good faith, Seller believes the Claim would exceed the
Threshold Amount as set forth above.
(d) Survival of Seller's Claims. Except as otherwise specifically set forth
---------------------------
in this Contract, the representations and warranties and indemnities of Buyer
contained herein or in any Buyer Closing Document shall survive only until the
Survival Date. Any Claim that Seller may have any time against Buyer for breach
of any such representation, warranty or indemnity, whether known or unknown,
with respect to which a Claim Notice has not been delivered to Buyer on or prior
-------
to the Survival Date, shall not be valid or effective. For the avoidance of
doubt, on the Survival Date, Buyer shall be fully discharged and released
(without the need for separate releases or other documentation) from any
liability or obligation to the Seller, Seller's designee(s) and/or their
successors and assigns with respect to any Claims or any other matter relating
to this Contract, any Buyer Closing Document or the Facility, except solely for
those matters that are then the subject of the pending Claim Notice delivered by
Seller to Buyer.
(e) HBM Guaranty. HBM shall execute at closing a Guaranty substantially in
-------------
the form of Exhibit K, guaranteeing Seller's obligation to pay to Buyer damages
---------
due under this Contract arising from a breach of Seller's representations and
warranties set forth in Section 7(a) of the Contract, provided that HBM shall
only be liable under such Guaranty to the extent that Seller would be liable
under the provisions of this Section 25 and in no event shall HBM's maximum
amount of liability under the Guaranty exceed the Cap Amount. Furthermore, to
the extent Buyer collects from Seller under a Claim the Cap Amount, HBM shall
have no further liability under such Guaranty.
(f) Closing Survival and Section Applicability. This Section 25 shall
----------------------------------------------
survive closing. The limitations on Claims (including, without limitation, the
Threshold Amount and the Cap Amount) and all other aspects of this Section 25
shall be inapplicable to the provisions of Section 4 (Seller's Funding of
Operating Losses) and Section 6(d) (Adjustments). Nothing in this Section 25
shall restrict Buyer from interpleading Seller in any action filed by a third
party against Buyer relating to Seller's ownership and operation of the Facility
prior to closing.
26. TIME OF THE ESSENCE. All times, wherever specified herein for the
performance by Seller or Buyer of their respective obligations hereunder, are of
the essence of this Contract. Notwithstanding the foregoing, any time
period provided for herein which shall end on a Saturday, Sunday, or legal
holiday shall extend to the next Business Day. For purposes of this Contract,
the term "BUSINESS DAY" shall mean those days of the week which are not a
Saturday, Sunday or any other federal or state holiday in which the banks in
Chicago are not open for business.
27. COUNTERPARTS. This Contract may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute a single agreement binding on the parties hereto.
28. DRAFTS NOT AN OFFER TO ENTER INTO A LEGALLY BINDING CONTRACT. The
parties hereto agree that the submission of a draft of this Contract by one
party to another is not intended by either party to be an offer to enter into a
legally binding contract with respect to the purchase and sale of the Facility
pursuant to the terms of this Contract. The parties shall be legally bound with
respect to the purchase and sale of the Facility pursuant to the terms of this
Contract only if and when the parties have been able to negotiate all of the
terms and provisions of this Contract in a manner acceptable to each of the
parties in their respective sole discretion, including, without limitation, all
of the Exhibits and Schedules hereto, and each of Seller and Buyer have fully
executed and delivered to each other a counterpart of this Contract, including,
without limitation, all Exhibits and Schedules hereto.
29. CONFIDENTIALITY, DISCLOSURE AND PRESS RELEASES.
(a) Confidentiality Agreement. As a condition to Seller's agreement to
--------------------------
furnish and/or disclose Confidential Information (as defined in the
confidentiality agreement attached hereto as Exhibit I) to Buyer and its
----------
Representatives for review and inspection, Buyer hereby agrees to be bound by
the confidentiality agreement in the form attached hereto as Exhibit I.
---------
(b) Disclosure. Notwithstanding any language in this Contract to the
----------
contrary, in no event shall Buyer contact any Facility-based employees or
otherwise disclose the transactions contemplated by this Contract to any
Facility-based employees until the later of (i) the Effective Date or (ii)
Buyer's issuance of the Press Release (hereinafter defined).
(c) Press Release. Seller and Buyer hereby covenant that (i) prior to the
--------------
closing they shall not issue any press release or public statement (a "PRESS
RELEASE") with respect to the transaction contemplated by this Contract without
the prior consent of all parties to this Contract, except to the extent required
by law or the regulations of the Securities and Exchange Commission, and (ii)
after the closing, any Press Release issued by Seller or Buyer shall be subject
to the review and approval of all such parties (which approval shall not be
unreasonably withheld). If Seller or Buyer are required by law to issue a Press
Release, such party shall, at least two (2) Business Days prior to the issuance
of the same, deliver a copy of the proposed Press Release to the other party for
its review. Notwithstanding any language to the contrary herein, Buyer
covenants to issue a Press Release on the Effective Date or such earlier or
later date as may be mutually agreed by Seller and Buyer, which Press Release
shall be subject to Seller's review and approval (which approval will not be
unreasonably withheld and may not be withheld with respect to any provision of
the Press Release which is required by law or the regulations of the Securities
and Exchange Commission).
30. ESCROW.
(a) Interpleader. In the event of a dispute concerning the disposition of
------------
the Xxxxxxx Money, the Escrow Agent shall have the right at any time to deposit
any cash funds held by it under this Contract with the clerk of the court having
jurisdiction. The Escrow Agent shall give written notice of such deposit
to Seller and Buyer. Upon such deposit, the Escrow Agent shall be relieved and
discharged of all further obligations and responsibilities hereunder.
(b) Escrow Agent as Stakeholder. The parties acknowledge that the Escrow
------------------------------
Agent is acting solely as a stakeholder at their request and for their
convenience. Seller and Buyer shall jointly and severally indemnify and hold
the Escrow Agent harmless from and against all costs, claims, and expenses,
including reasonable attorneys' fees, incurred in connection with the
performance of the Escrow Agent's duties hereunder, except with respect to
actions or omissions taken or suffered by the Escrow Agent in bad faith, in
willful disregard of this Contract or involving gross negligence on the part of
the Escrow Agent.
[Remainder of page intentionally left blank.]
IN WITNESS WHEREOF, the undersigned parties have executed this Contract
under seal as of the day and year first above stated.
SELLER:
------
SENIOR LIFESTYLE SHREVEPORT, L.L.C.
By: /s/ Thilo D. Best
Thilo D. Best
President and Chief Executive Officer
BUYER:
-----
EMERITUS CORPORATION
By: /s/ Xxxxxx X. Xxxx
Xxxxxx X. Xxxx
Chairman and Chief Executive Officer
The undersigned Escrow Agent executes this Contract solely for the purpose of
evidencing its agreement to perform its obligations, as set forth in this
Contract, it being understood and agreed that Escrow Agent shall have absolutely
no liability for the performance by Seller or Buyer of their obligations under
this Contract.
TITLE NETWORK, LTD.
By:
Name:
Title:
HBM is executing this Contract for the sole purpose of agreeing to be bound by
the provisions of Sections 4(d) and 25(e).
HBM:
---
HORIZON BAY MANAGEMENT, L.L.C.
By: /s/ Thilo D. Best
Thilo D. Best
President and Chief Executive Officer
LIST OF EXHIBITS
----------------
Exhibit Recitals Definition of Personal Property
-----------------
Exhibit A Legal Description of Shreveport
----------
Exhibit B Shreveport Existing Debt Loan Documents
----------
Exhibit C Seller's Operating Loss Funding Obligations
----------
Exhibit D Form of Warranty Deed
----------
Exhibit E Form of Assignment and Assumption of Occupancy Agreements
----------
Exhibit F Form of Assignment of Licenses, Intangibles (including Trade Name)
---------
and Warranties
Exhibit G Form of Assignment and Assumption of Operating Contracts
----------
Exhibit H Form of Xxxx of Sale
----------
Exhibit I Form of Confidentiality Agreement
----------
Exhibit J Form of HBM's Guaranty of Operating Losses
----------
Exhibit K Form of HBM's Guaranty of Representations and Warranties
----------
LIST OF SCHEDULES
-----------------
Schedule 4(b) Form of Operating Loss Report
--------------
Schedule 7(a)(vi) Litigation
------------------
Schedule 7(a)(xi) Operating Contracts
------------------
EXHIBIT RECITALS
----------------
"PERSONAL PROPERTY" is comprised of the following (expressly excluding
operating procedures manuals, corporate systems (such as accounting or cash
management systems), accounts receivable, tax refunds, goodwill, the trade name
"Xxxxxxxx Place at Lincoln Square" and other trade names (other than the Trade
Name), trademarks and service marks, trade secrets and proprietary information
and know-how and forms, including accounting and other proprietary software):
(i) all resident occupancy agreements and commercial tenant lease or
other occupancy agreements relating to the Real Property (the "OCCUPANCY
AGREEMENTS");
(ii) to the extent assignable, any and all licenses, authorizations,
permits and approvals issued by any governmental authority and relating to its
ownership and operation of the Real Property (the "ASSIGNABLE LICENSES");
(iii) all furniture, furnishings, equipment, inventory, supplies and
vehicles owned by Seller and relating to the Real Property (the "TANGIBLE
PERSONAL PROPERTY");
(iv) all service, maintenance and equipment contracts and leases under
which Seller is vendee or lessee (excluding the Seller's Management Agreement
with Horizon Bay Management, L.L.C.) to the Real Property (the "OPERATING
CONTRACTS"); and
(v) all rights to the trade name "Xxxxxxxx Place at Shreveport" (the "TRADE
NAME").
------
EXHIBIT A
---------
LEGAL DESCRIPTION OF SHREVEPORT
-------------------------------
A TRACT OF LAND located in Fractional Section 37, Township 17 North, Range 13
West, Shreveport, Caddo Parish, Louisiana, being more fully described as
follows: Beginning at the Northeast corner of Xxx 000, Xxxxxxxxxx Xxxxxxx, as
recorded in Book 1100, pages 159 through 169 of the Records of Caddo Parish,
Louisiana, said point also located on the Westerly right of way line of
University Drive; Thence leaving said Westerly right of way line run along the
Northerly line of said Xxxxxxxxxx Xxxxxxx Xxxxx 00 00'00" Xxxx a distance of
746.13 feet to a point of the high bank of Sand Beach Bayou; Thence leaving said
Northerly line of University Terrace run along said high bank the following
courses and distances: North 23 44'00" East a distance of 367.57 feet and
North 03 04'00" East a distance of 115.60 feet; Thence leaving said high bank
run North 89 18'00" East a distance of 586.50 feet to a point on the Westerly
right of way line of University Drive; Run thence along said Westerly right of
way line South 00 42'00" East a distance of 450.00 feet to the point of
beginning of tract, containing 6.711 acres, more or less.
EXHIBIT B
---------
SHREVEPORT EXISTING DEBT LOAN DOCUMENTS
---------------------------------------
1. Construction Loan Agreement by and between Senior Lifestyle Shreveport,
L.L.C. and GMAC Commercial Mortgage Corporation
2. Promissory Note ($6,480,000)
3. Assignment of Leases and Rents by Senior Lifestyle Shreveport, L.L.C. and
GMAC Commercial Mortgage Corporation
4. Repayment Guarantee Agreement by WHSLC Realty, L.L.C. and GMAC Commercial
Mortgage Corporation
5. UCC-1 Financing Statement
6. Collateral Assignment of Contracts by Senior Lifestyle Shreveport, L.L.C.
to GMAC Commercial Mortgage Corporation
7. Collateral Mortgage and Security Agreement
EXHIBIT C
---------
SELLER'S OPERATING LOSS FUNDING OBLIGATIONS
-------------------------------------------
The Operating Loss Cap for the 365-day period following the Closing Date (the
"FIRST YEAR OPERATING LOSS CAP") is $252,000. The Operating Loss Cap for the
365-day period following the first anniversary of the Closing Date (the "SECOND
YEAR OPERATING LOSS CAP") is $50,000. In no event shall the aggregate Operating
Losses paid to Buyer under this Contract exceed $302,000. The Operating Loss
Caps include, as facility expenses, debt service and a management fee of 5% of
Gross Revenues.
EXHIBIT D
---------
FORM OF WARRANTY DEED
---------------------
State of LOUISIANA
Parish of Caddo
Be it known, that on this day of 2002;
Before me, the undersigned Notary Public, duly commissioned and qualified within
and for the above Parish and State, and in the presence of the undersigned
competent witnesses, personally came and appeared as Seller:
Senior Lifestyle Shreveport, L.L.C.
whose address is declared to be 000 X. Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx,
Xxxxxxxx 00000;
who declared that for the price of Ten Dollars ($10.00), cash in hand paid;
receipt of which is hereby acknowledged, Seller does hereby sell and deliver,
with full warranty of title and subrogation to all rights and actions of
warranty Seller may have unto Buyer:
[EMERITUS CORPORATION OR ITS DESIGNEE]
whose address is declared to be 0000 Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, XX
00000;
who acknowledges delivery and possession of the following described property:
A TRACT OF LAND located in Fractional Section 37, Township 17 North, Range 13
West, Shreveport, Caddo Parish, Louisiana, being more fully described as
follows: Beginning at the Northeast corner of Xxx 000, Xxxxxxxxxx Xxxxxxx, as
recorded in Book 1100, pages 159 through 169 of the Records of Caddo Parish,
Louisiana, said point also located on the Westerly right of way line of
University Drive; Thence leaving said Westerly right of way line run along the
Northerly line of said Xxxxxxxxxx Xxxxxxx Xxxxx 00 00'00" Xxxx a distance of
746.13 feet to a point of the high bank of Sand Beach Bayou; Thence leaving said
Northerly line of University Terrace run along said high bank the following
courses and distances: North 23 44'00" East a distance of 367.57 feet and
North 03 04'00" East a distance of 115.60 feet; Thence leaving said high bank
run North 89 18'00" East a distance of 586.50 feet to a point on the Westerly
right of way line of University Drive; Run thence along said Westerly right of
way line South 00 42'00" East a distance of 450.00 feet to the point of
beginning of tract, containing 6.711 acres, more or less.
To have and to hold said property unto Buyer, Buyer's heirs, successors and
assigns, forever.
All parties signing the within instrument, either as parties or as witnesses,
have
declared themselves to be of full legal capacity.
All agreements and stipulations, and all of the obligations herein assumed shall
insure to the benefit of and be binding upon the heirs, successors and assigns
of
the respective parties.
The certificate of mortgages, required by Article 3364 of the Revised Civil Code
of
Louisiana, certificate of conveyances and tax certificate are dispensed with by
the
parties hereto. All taxes assessed against the property herein conveyed have
been
prorated as of the date of sale.
Thus done and signed at my office in the City of ______________, State of
________________, on the date first hereinabove written, in the presence of the
undersigned competent witnesses and me, Notary, after due reading of the whole.
Witnesses:
SENIOR LIFESTYLE SHREVEPORT, L.L.C.
By:
Thilo D. Best
President and Chief Executive Officer
________________________________________
Notary Public
EXHIBIT E
---------
FORM OF ASSIGNMENT AND ASSUMPTION
---------------------------------
OF OCCUPANCY AGREEMENTS
-----------------------
THIS ASSIGNMENT AND ASSUMPTION OF OCCUPANCY AGREEMENTS (this "ASSIGNMENT")
is entered into on this ___ day of __________ 2002, between (i) Senior Lifestyle
Shreveport, L.L.C., a Delaware limited liability company ("ASSIGNOR"), having an
office at c/o Horizon Bay Management, L.L.C., 000 X. Xxxxxx Xxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxxx 00000 and (ii) [EMERITUS CORPORATION OR ITS DESIGNEE], a
___________________ ("ASSIGNEE"), having an office at 0000 Xxxxxxx Xxxxxx, Xxxxx
000, Xxxxxxx, XX 00000.
1. Reference to Sale Contract. Reference is made to a Sale Contract
-----------------------------
dated April __, 2002 between Assignor, as seller, and Assignee, as buyer,
pursuant to which Assignor has agreed to sell to Assignee, and Assignee has
agreed to purchase from Assignor, the Assignor's interest in the Real Property
and other assets described therein (the "SALE CONTRACT"). Capitalized terms
used herein and not otherwise defined herein shall have the meanings set forth
in the Sale Contract.
2. Assignment. For good and valuable consideration received by
----------
Assignor, the receipt and sufficiency of which are hereby acknowledged, Assignor
hereby grants, transfers and assigns to Assignee all right, title and interest
of Assignor as landlord in and to each of the Occupancy Agreements and the
security deposits thereunder. Assignor is not assigning any right to receive
delinquent rent, and any delinquent rent as of the date hereof shall be
collected and paid to Seller in the manner provided by the Sale Contract.
3. Assumption. Assignee hereby assumes, and agrees to be bound by, all
----------
of the covenants, agreements and obliga-tions of Assignor as landlord under the
Occupancy Agreements which shall arise or be incurred, or which are required to
be performed, on and after the date of this Assignment, and Assignee further
assumes all liability of Assignor for the proper refund or return of the
security deposits if, when and as required by the Occupancy Agreements or
otherwise by law. Assignee is not assuming any obligation to collect and/or pay
to Seller any delinquent rent as of the date hereof, except as expressly
provided in the Sale Contract.
4. Binding Effect. This Assignment shall inure to the benefit of, and
---------------
be binding upon, each of the parties hereto and their respective successors and
assigns.
5. Counterparts. This Agreement may be executed in counterparts, each
------------
of which shall be deemed an original, but all of which, taken together, shall
constitute one and the same instrument.
6. Indemnification.
---------------
(a) Assignor agrees to indemnify, defend and hold Assignee
harmless from and against all claims and demands of a resident or tenant under
any Occupancy Agreement arising as a result of Assignor's performance of, or
failure to perform, the covenants, agreements and obligations of the
licensor/landlord under the Occupancy Agreements to be kept and performed by
Assignor as such licensor/landlord before the date of this Assignment and
Assignor shall pay all costs and expenses (including reasonable attorneys' fees)
incurred by Assignee in enforcing this indemnity.
(b) Assignee agrees to indemnify, defend and hold Assignor
harmless from and against all claims and demands of a resident or tenant under
any Occupancy Agreements arising as a result of Assignee's performance of, or
failure to perform, the covenants, agreements and obligations of the
licensor/landlord under the Occupancy Agreements to be kept and performed by
Assignee as such licensor/landlord, as the case may be, on and after the date of
this Assignment and Assignee shall pay all costs and expenses (including
reasonable attorneys' fees) incurred by Assignor in enforcing this indemnity.
[SIGNATURES OF THE PARTIES ARE SET FORTH ON THE NEXT PAGE]
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment on
the day and year first above written.
ASSIGNOR:
SENIOR LIFESTYLE SHREVEPORT, L.L.C.,
a Delaware limited liability company
By: ____________________________________
Name:
Title:
ASSIGNEE:
[EMERITUS CORPORATION OR ITS DESIGNEE], a
By:
Name:
Title:
------
EXHIBIT F
---------
FORM OF ASSIGNMENT OF LICENSES, INTANGIBLES
-------------------------------------------
(INCLUDING TRADE NAME) AND WARRANTIES
-------------------------------------
THIS ASSIGNMENT OF LICENSES, INTANGIBLES (INCLUDING TRADE NAME) AND
WARRANTIES (this "ASSIGNMENT") is entered into on this ___ day of __________
2002, between (i) Senior Lifestyle Shreveport, L.L.C., a Delaware limited
liability company ("ASSIGNOR"), having an office at c/o Horizon Bay Management,
L.L.C., 000 X. Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000 and (ii)
[EMERITUS CORPORATION OR ITS DESIGNEE], a ___________________ ("ASSIGNEE"),
having an office at 0000 Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, XX 00000.
1. Reference to Sale Contract. Reference is made to a Sale Contract dated
----------------------------
April __, 2002, between Assignor, as seller, and Assignee, as buyer (the "SALE
CONTRACT"), pursuant to which Assignor agreed to sell to Assignee, and Assignee
agreed to purchase from Assignor, the Facility and other assets described
therein. Capitalized terms used herein and not otherwise defined herein shall
have the meanings set forth in the Sale Contract.
2. Assignment. For good and valuable consideration received by
----------
Assignor, the receipt and suffi-ciency of which are hereby acknowledged,
Assignor hereby grants, transfers and assigns to Assignee all right, title and
interest of Assignor in and to: the Assignable Licenses, the Trade Names and any
other intangibles or warranty to the extent not excluded from transfer under the
terms of the Sale Contract. This Assignment shall not be effective as to any
Assignable License, Trade Name or other intangible or warranty which, by its
terms or as a matter of law, cannot be assigned.
3. Binding Effect. This Assignment shall inure to the benefit of, and
---------------
be binding upon, each of the parties hereto and their respective successors and
assigns.
IN WITNESS WHEREOF, Assignor has executed this Assignment on the day and
year first above written.
By: SENIOR LIFESTYLE SHREVEPORT, L.L.C.,
a Delaware limited liability company
By: ________________________
Name:
Title:
EXHIBIT G
---------
FORM OF ASSIGNMENT AND ASSUMPTION
---------------------------------
OF OPERATING CONTRACTS
----------------------
THIS ASSIGNMENT AND ASSUMPTION OF OPERATING CONTRACTS (this "ASSIGNMENT")
is entered into on this ___ day of __________ 2002, between (i) Senior Lifestyle
Shreveport, a Delaware limited liability company ("ASSIGNOR"), having an office
at c/o Horizon Bay Management, L.L.C., 000 X. Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx,
Xxxxxxxx 00000 and (ii) [EMERITUS CORPORATION OR ITS DESIGNEE], a
___________________ ("ASSIGNEE"), having an office at 0000 Xxxxxxx Xxxxxx, Xxxxx
000, Xxxxxxx, XX 00000. ("ASSIGNEE").
1. Property. The "PROPERTY" shall mean the real property located in
--------
Shreveport, Caddo Parish, Louisiana, legally described in EXHIBIT A to this
Assignment.
2. Service Contracts. The "OPERATING CONTRACTS" shall mean all contracts
------------------
relating to the Property listed in EXHIBIT B to this Assignment.
3. Assignment. For good and valuable consideration received by Assignor,
----------
the receipt and sufficiency of which are hereby acknowledged, Assignor hereby
grants, transfers and assigns to Assignee all right, title and interest of
Assignor in and to each of the Operating Contracts.
4. Assumption. Assignee hereby assumes, and agrees to be bound by, all of
----------
the covenants, agreements and obligations of Assignor under the Operating
Contracts which shall arise or be incurred, or which are required to be
performed, on and after the date of this Assignment.
5. Indemnification.
---------------
(c) Assignor agrees to indemnify, defend and hold Assignee harmless from and
against all claims and demands of a vendor under any Operating Contract
arising as a result of Assignor's performance of, or failure to perform, the
covenants, agreements and obligations of the vendee under the Operating
Contracts to be kept and performed by Assignor as such vendee, before the date
of this Assignment (provided, however, that Assignor shall be responsible for
all payment obligations accrued by the vendee under the Operating Contracts
before the date of this Assignment even if such sums are not due until after the
date of this Assignment) and Assignor shall pay all costs and expenses
(including reasonable attorneys' fees) incurred by Assignee in enforcing this
indemnity.
(d) Assignee agrees to indemnify, defend and hold Assignor harmless from and
against all claims and demands of a vendor under any Operating Contract arising
as a result of Assignee's performance of, or failure to perform, the covenants,
agreements and obligations of the vendee under the Operating Contracts to be
kept and performed by Assignee as such vendee, as the case may be, on and after
the date of this Assignment and Assignee shall pay all costs and expenses
(including reasonable attorneys' fees) incurred by Assignor in enforcing this
indemnity.
6. Binding Effect. This Assignment shall inure to the benefit of, and
---------------
be binding upon, each of the parties hereto and their respective successors and
assigns.
7. Exhibits. The Exhibits referred to in this Agreement and attached hereto
--------
are incorporated herein by this reference and made a part hereof.
8. Counterparts. This Agreement may be executed in counterparts, each of
------------
which shall be deemed an original, but all of which, taken together, shall
constitute one and the same instrument.
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment
effective as of the day and year first above written.
ASSIGNOR:
SENIOR LIFESTYLE SHREVEPORT, L.L.C.
a Delaware limited liability company
By: ____________________________________
Name:
Title:
ASSIGNEE:
[EMERITUS CORPORATION OR ITS DESIGNEE], a ______________
By: ____________________________________
Name:
Title:
EXHIBIT H
---------
FORM OF XXXX OF SALE
------------------------
THIS XXXX OF SALE (this "XXXX OF SALE") is executed on this ____ day of
____________, 2002, by Senior Lifestyle Shreveport, L.L.C. ("SELLER"), a
Delaware limited liability company, having an office at 000 X. Xxxxxx Xxxxx,
Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, in favor of [EMERITUS CORPORATION OR ITS
DESIGNEE] ("BUYER"), a ___________________, having an office at 0000 Xxxxxxx
Xxxxxx, Xxxxx 000, Xxxxxxx, XX 00000.
1. Reference to Sale Contract. Reference is made to a Sale Contract
-----------------------------
dated April __, 2002 between Seller and Buyer, pursuant to which Seller has
agreed to sell to Buyer, and Buyer has agreed to purchase from Seller, the
Assignor's interest in the Real Property and other assets described therein (the
"SALE CONTRACT"). Capitalized terms used herein and not otherwise defined
herein shall have the meanings set forth in the Sale Contract.
2. Sale. For good and valuable consideration received by Seller, the
----
receipt and sufficiency of which is hereby acknowledged, Seller hereby sells,
assigns and transfers its Tangible Personal Property to Buyer free and clear of
all liens, charges and encumbrances. Seller covenants and agrees to warrant and
forever defend title to its Tangible Personal Property unto Buyer against all
and every person or persons. Except as set forth in the immediately preceding
sentence, Seller makes no warranties or representations as to its Tangible
Personal Property.
IN WITNESS WHEREOF, Seller has executed this Xxxx of Sale the day and year
first above written.
SELLER:
SENIOR LIFESTYLE SHREVEPORT, L.L.C.,
a Delaware limited liability company
By: ____________________________________
Name:
Title:
------
EXHIBIT I
---------
FORM OF CONFIDENTIALITY AGREEMENT
---------------------------------
PERSONAL AND CONFIDENTIAL
---------------------------
April ___, 2002
c/o Horizon Bay Management, L.L.C.
000 X. Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Thilo D. Best
RE: CONFIDENTIALITY AGREEMENT
--------------------------
Dear Thilo:
In connection with the consideration by Emeritus Corporation or its affiliate
("BUYER") of the potential purchase (the "PURCHASE") from Senior Lifestyle
Shreveport, L.L.C. (the "SELLER"), of the Facility, as defined in the Sale
Contract dated as of April __, 2002 between Seller and Buyer, Buyer has
requested that Seller supply certain Confidential Information (as defined in
paragraph 1 below). As a condition to Seller's agreement to furnish and/or
disclose such Confidential Information to Buyer for its review and inspection,
Buyer agrees to be bound by the terms set forth herein.
1. "CONFIDENTIAL INFORMATION" shall include all information furnished to
Buyer by Seller relating to Seller or assets held by Seller, as well as written
memoranda, notes, analysis, reports, compilations, or studies prepared by Buyer
which contain, or are derived from, such information furnished by Seller,
whether in writing, computer diskette, other medium or oral communication.
Notwithstanding the foregoing, information provided by Seller shall not
constitute Confidential Information if such information (i) is or becomes
generally available to the public other than as a result of a disclosure by or
through Buyer or its directors, officers, employees or affiliates in
contravention of this agreement, (ii) was already available to, or in the
possession of, Buyer prior to its disclosure by, or at the direction of, Seller
in connection with Buyer's evaluation of the potential Purchase, or (iii) is or
becomes available to Buyer from a source (other than Seller) not bound, to the
knowledge of Buyer, by any legal or other obligation prohibiting the disclosure
of Confidential Information by such source to Buyer.
2. Buyer agrees that it will use Confidential Information exclusively for
the purpose of evaluating the potential Purchase. Buyer further agrees that it
will not disclose Confidential Information to any third party; provided,
however, that Buyer may without liability disclose Confidential Information (i)
to any director, officer, employee of Buyer, or attorney, accountant, or other
technical expert retained by Buyer who needs to know such Confidential
Information for the purpose of evaluating the potential Purchase or later
administering such Purchase and to Buyer's auditors, accountants and attorneys
(it being understood and agreed that Buyer shall advise such persons of the
confidential nature of such Confidential Information and such persons shall
agree to maintain the confidentiality of such Confidential Information in
accordance with the terms hereof), and (ii) to the extent required by a
subpoena, judicial, or administrative process.
3. In the event that Buyer desires to disclose Confidential Information
under the circumstances contemplated by clause (ii) of the preceding paragraph,
Buyer will (a) provide Seller with prompt notice thereof, (b) consult with
Seller on the advisability of taking steps to resist or narrow such disclosure,
and (c) reasonably cooperate with Seller in any attempt that Seller may make to
obtain an order or other reliable assurance that confidential treatment will be
accorded to designated portions of the Confidential Information. However, Buyer
shall not be obligated to suffer civil or criminal liability to prevent
disclosure of Confidential Information required by a subpoena, judicial,
regulatory or administrative process.
4. Buyer agrees that in the event the Purchase fails to occur, all written
Confidential Information and all copies thereof will be returned to Seller
promptly upon Seller's request.
5. In addition to any other remedies available to Seller, Buyer acknowledges
and agrees that Seller shall be entitled to seek the remedies of injunction and
specific performance for any breach of the provisions of this agreement by
Buyer.
6. Buyer agrees to indemnify and hold harmless Seller from and against all
loss, liability, claim, damage and expenses (including attorneys' fees) arising
out of any breach of this agreement by Buyer or its representatives.
7. This agreement shall be governed by and construed in accordance with the
laws of the State of Louisiana.
Very truly yours,
Emeritus Corporation,
By: ______________________
Xxxxxx X. Xxxx
Chairman and Chief Executive Officer
AGREED TO AND ACCEPTED:
Horizon Bay Management, L.L.C., on behalf of Seller
By: ______________________
Thilo D. Best
President and Chief Executive Officer
EXHIBIT J
---------
GUARANTY OF OPERATING LOSSES
----------------------------
THIS GUARANTY (the "GUARANTY") is made and entered into this ____ day of
, 2002, by HORIZON BAY MANAGEMENT, L.L.C. ("GUARANTOR"), for the benefit of
EMERITUS CORPORATION ("BUYER").
RECITALS
--------
A. Senior Lifestyle Shreveport, L.L.C. ("SELLER"), and Buyer entered
into a Sale Contract dated as of April __, 2002 (the "SALE CONTRACT") pursuant
to which Buyer agreed to purchase the Facility (as defined in the Sale Contract)
from Seller, subject to the terms and conditions of the Sale Contract.
B. Guarantor benefited by Buyer and Seller entering into the Sale
Contract, and, therefore, Guarantor executed the Sale Contract for the purpose
of guaranteeing the performance of the Guaranteed Obligations (as defined
herein).
NOW, THEREFORE, as an inducement for Buyer to consummate the transactions
contemplated by the Sale Contract, and for other good and valuable
consideration, the receipt and legal sufficiency of which are hereby
acknowledged, the parties do hereby agree as follows:
1. Definitions. Capitalized terms used in this Guaranty which are
-----------
defined in the Sale Contract as now in effect or as it may hereafter be amended
from time to time have the meanings specified in the Sale Contract unless
expressly otherwise defined herein.
2. Guaranty of Payment and Performance. As set forth in Section 4(d)
-------------------------------------
of the Sale Contract, Guarantor hereby irrevocably and unconditionally
guarantees to Buyer the payment of Seller's obligation to fund Operating Losses,
provided that Guarantor's maximum amount of liability under the Guaranty shall
not exceed the applicable Operating Loss Caps. This Guaranty is an
unconditional guaranty of payment and not of collection, and Guarantor agrees
that Buyer shall not be required to assert any claim or cause of action against
Seller before asserting any claim or cause of action against Guarantor under
this Guaranty. This Guaranty is a continuing guaranty which shall remain in
full force and effect until all of the obligations set forth herein shall have
been completely performed or otherwise discharged. The obligations under this
Section which Guarantor is guaranteeing under this Guaranty are hereinafter
referred to as the "GUARANTEED OBLIGATIONS".
3. Waiver of Notice. Guarantor hereby waives notice of acceptance
------------------
hereof, and of nonperformance or nonpayment by Seller of any of the Guaranteed
Obligations.
4. Further Assurances. Guarantor will at any time and from time to
-------------------
time upon request by Buyer take or cause to be taken any action and execute and
deliver such, if any, further documents as, in the opinion of Buyer, may be
necessary in order to assure to Buyer the full benefits of this Guaranty.
5. Waiver. Neither this Guaranty nor any term hereof may be changed,
------
waived, discharged or terminated except by an instrument in writing signed by
Buyer and Guarantor expressly referring to this Guaranty and to the provisions
so changed or limited. No such waiver shall extend to or affect any obligation
not expressly waived or impair any right consequent thereon. No course of
dealing or delay or omission on the part of Buyer in exercising any right under
this Guaranty shall operate as a waiver thereof or otherwise be prejudicial
thereto.
6. Insolvency of Seller or Guarantor. This Guaranty shall not be
-------------------------------------
affected, modified, or impaired by the voluntary or involuntary liquidation,
dissolution, sale or other disposition of all or substantially all of the
assets, marshalling of assets and liabilities, receivership, insolvency,
bankruptcy, assignment for the benefit of creditors, reorganization,
arrangements, composition with creditors or readjustment of, or other similar
proceedings affecting Seller or Guarantor, or any of the assets belonging to any
of them.
7. Notices. Any demand or notice required or permitted to be given by
-------
Buyer to Guarantor under this Guaranty shall be given pursuant to the terms and
conditions set forth in Section 19 of the Sale Contract, and addressed to
Guarantor at Horizon Bay Management, L.L.C., Attention: Thilo D. Best,
President and CEO, 000 X. Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000,
Tel. No. 000-000-0000, Fax No. 000-000-0000, with a copy to Whitehall Street
Real Estate Limited Partnership VII, Attention: Chief Financial Officer, 00
Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, and with a copy to Xxxxxxx
X. Xxxxx, Esquire, Arent Fox Xxxxxxx Xxxxxxx & Xxxx, PLLC, 0000 Xxxxxxxxxxx
Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000-0000, Tel. No. 000-000-0000; Fax No.
000-000-0000, or at any other address designated by Guarantor to Buyer.
8. Waiver of Notice and Consent. Without notice to Guarantor, without
-----------------------------
the consent of Guarantor, and without affecting or limiting Guarantor's
liability hereunder, Buyer may:
(a) grant Seller extensions of time for payment of the Guaranteed
Obligations or any part thereof;
(b) grant Seller extensions of time for performance of agreements
or other indulgences;
(c) compromise, settle, release, or terminate any or all of the
obligations,
covenants, or agreements of Seller under the Sale Contract; and
(d) with Seller's written consent, modify or amend any obligations,
covenant, or agreement of Seller as set forth in the Sale Contract (and such
amendments shall nevertheless be binding upon Guarantor).
9. Continued Effectiveness and Reinstatement. This Guaranty shall
--------------------------------------------
continue to be effective, or be reinstated, as the case may be, if at any time
any whole or partial payment or performance of any of the Guaranteed Obligations
or any other obligation hereunder is or is sought to be rescinded or must
otherwise be restored or returned by Buyer upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of Seller or Guarantor upon or as a
result of the appointment of a receiver, intervener, or conservator of, or
trustee or similar officer for, Seller or Guarantor of or for any substantial
part of its property, or otherwise, all as though such payments and performance
had not been made.
10. General Provisions. This Guaranty shall be binding upon the
-------------------
respective successors and assigns of Guarantor, and shall inure to the benefit
of Buyer and its successors and assigns; provided, however, Guarantor will not
assign or otherwise transfer this Guaranty without the prior written consent of
Buyer, which consent may be granted or refused in Buyer's sole discretion. This
Guaranty shall be governed by and construed in accordance with the laws of the
State of Delaware. The descriptive headings of the Sections of this Guaranty
have been inserted herein for convenience of reference only and shall not define
or limit the provisions hereof. If any provision of this Guaranty shall be
invalid, illegal or unenforceable, the validity of all other terms hereof shall
be in no way affected thereby, and this Guaranty shall operate and be
enforceable as if such invalid, illegal or unenforceable provisions had not been
included herein.
IN WITNESS WHEREOF, Guarantor has signed this Guaranty under seal as of the
day and year first above written.
GUARANTOR:
---------
HORIZON BAY MANAGEMENT, L.L.C.
By:
Thilo D. Best
President and Chief Executive Officer
EXHIBIT K
---------
GUARANTY OF REPRESENTATIONS AND WARRANTIES
------------------------------------------
THIS GUARANTY (the "GUARANTY") is made and entered into this ____ day of
, 2002, by HORIZON BAY MANAGEMENT, L.L.C. ("GUARANTOR"), for the benefit of
EMERITUS CORPORATION ("BUYER").
RECITALS
--------
A. Senior Lifestyle Shreveport, L.L.C. ("SELLER"), and Buyer entered
into a Sale Contract dated as of April __, 2002 (the "SALE CONTRACT") pursuant
to which Buyer agreed to purchase the Facility (as defined in the Sale Contract)
from Seller, subject to the terms and conditions of the Sale Contract.
B. Guarantor benefited by Buyer and Seller entering into the Sale
Contract, and, therefore, Guarantor executed the Sale Contract for the purpose
of guaranteeing the collection of the Guaranteed Obligations (as defined
herein).
NOW, THEREFORE, as an inducement for Buyer to consummate the transactions
contemplated by the Sale Contract, and for other good and valuable
consideration, the receipt and legal sufficiency of which are hereby
acknowledged, the parties do hereby agree as follows:
1. Definitions. Capitalized terms used in this Guaranty which are
-----------
defined in the Sale Contract as now in effect or as it may hereafter be amended
from time to time have the meanings specified in the Sale Contract unless
expressly otherwise defined herein.
2. Guaranty of Payment and Performance. As set forth in Section 25(e)
------------------------------------
of the Sale Contract, Guarantor hereby irrevocably and unconditionally
guarantees to Buyer Seller's obligation to pay to Buyer damages due under the
Sale Contract arising from a breach of a representation and warranty set forth
in Section 7(a) of the Sale Contract, provided that Guarantor shall only be
liable under this Guaranty to the extent that Seller would be liable under the
provisions of Section 25 of the Sale Contract and Guarantor's maximum amount of
liability under this Guaranty shall not exceed the Cap Amount. This Guaranty
is an unconditional guaranty of payment and not of collection, and is no way
conditioned upon any attempt by Buyer to collect from Seller. This Guaranty is
a continuing guaranty which shall remain in full force and effect until all of
the obligations set forth herein shall have been completely performed or
otherwise discharged. The obligations under this Section which the Guarantor is
guaranteeing under this Guaranty are hereinafter referred to as the "GUARANTEED
OBLIGATIONS".
3. Waiver of Notice. Guarantor hereby waives notice of acceptance
------------------
hereof, and of nonperformance or nonpayment by Seller of any of the Guaranteed
Obligations.
4. Further Assurances. Guarantor will at any time and from time to
-------------------
time upon request by Buyer take or cause to be taken any action and execute and
deliver such, if any, further documents as, in the opinion of Buyer, may be
necessary in order to assure to Buyer the full benefits of this Guaranty.
5. Waiver. Neither this Guaranty nor any term hereof may be changed,
------
waived, discharged or terminated except by an instrument in writing signed by
Buyer and Guarantor expressly referring to this Guaranty and to the provisions
so changed or limited. No such waiver shall extend to or affect any obligation
not expressly waived or impair any right consequent thereon. No course of
dealing or delay or omission on the part of Buyer in exercising any right under
this Guaranty shall operate as a waiver thereof or otherwise be prejudicial
thereto.
6. Insolvency of Seller or Guarantor. This Guaranty shall not be
-------------------------------------
affected, modified, or impaired by the voluntary or involuntary liquidation,
dissolution, sale or other disposition of all or substantially all of the
assets, marshalling of assets and liabilities, receivership, insolvency,
bankruptcy, assignment for the benefit of creditors, reorganization,
arrangements, composition with creditors or readjustment of, or other similar
proceedings affecting Seller or Guarantor, or any of the assets belonging to any
of them.
7. Notices. Any demand or notice required or permitted to be given by
-------
Buyer to Guarantor under this Guaranty shall be given pursuant to the terms and
conditions set forth in Section 19 of the Sale Contract, and addressed to
Guarantor at Horizon Bay Management, L.L.C., Attention: Thilo D. Best,
President and CEO, 000 X. Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000,
Tel. No. 000-000-0000, Fax No. 000-000-0000, with a copy to Whitehall Street
Real Estate Limited Partnership VII, Attention: Chief Financial Officer, 00
Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, and with a copy to Xxxxxxx
X. Xxxxx, Esquire, Arent Fox Xxxxxxx Xxxxxxx & Xxxx, PLLC, 0000 Xxxxxxxxxxx
Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000-0000, Tel. No. 000-000-0000; Fax No.
000-000-0000, or at any other address designated by Guarantor to Buyer.
8. Waiver of Notice and Consent. Without notice to Guarantor, without
-----------------------------
the consent of Guarantor, and without affecting or limiting Guarantor's
liability hereunder, Buyer may:
(a) grant Seller extensions of time for payment of the Guaranteed
Obligations or any part thereof;
(b) grant Seller extensions of time for performance of agreements
or other indulgences;
(c) compromise, settle, release, or terminate any or all of the
obligations,
covenants, or agreements of Seller under the Sale Contract; and
(d) with Seller's written consent, modify or amend any obligations,
covenant, or agreement of Seller as set forth in the Sale Contract (and such
amendments shall nevertheless be binding upon Guarantor).
9. Continued Effectiveness and Reinstatement. This Guaranty shall
--------------------------------------------
continue to be effective, or be reinstated, as the case may be, if at any time
any whole or partial payment or performance of any of the Guaranteed Obligations
or any other obligation hereunder is or is sought to be rescinded or must
otherwise be restored or returned by Buyer upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of Seller or Guarantor upon or as a
result of the appointment of a receiver, intervener, or conservator of, or
trustee or similar officer for, Seller or Guarantor of or for any substantial
part of its property, or otherwise, all as though such payments and performance
had not been made.
10. General Provisions . This Guaranty shall be binding upon the
-------------------
respective successors and assigns of Guarantor, and shall inure to the benefit
of Buyer and its successors and assigns; provided, however, Guarantor will not
assign or otherwise transfer this Guaranty without the prior written consent of
Buyer, which consent may be granted or refused in Buyer's sole discretion. This
Guaranty shall be governed by and construed in accordance with the laws of the
State of Delaware. The descriptive headings of the Sections of this Guaranty
have been inserted herein for convenience of reference only and shall not define
or limit the provisions hereof. If any provision of this Guaranty shall be
invalid, illegal or unenforceable, the validity of all other terms hereof shall
be in no way affected thereby, and this Guaranty shall operate and be
enforceable as if such invalid, illegal or unenforceable provisions had not been
included herein.
IN WITNESS WHEREOF, the Guarantor has signed this Guaranty under seal as of
the day and year first above written.
GUARANTOR:
---------
HORIZON BAY MANAGEMENT, L.L.C.
By:
Thilo D. Best
President and Chief Executive Officer
SCHEDULE 4(B)
-------------
FORM OF OPERATING LOSS REPORT
-----------------------------
See attached.
SCHEDULE 7(A)(VI)
-----------------
LITIGATION
----------
None.
SCHEDULE 7(A)(XI)
-----------------
OPERATING CONTRACTS
-------------------
OPERATING CONTRACTS
PROPERTY . . . . . . . . . . . . COMPANY NAME CONTRACT DATE NOTES
KP @ Shreveport. . . . . . . . . Living Interiors, Inc. 8/1/1999 Horticultural services/plants
Xxxx Pest Control. . . . . . . 7/7/1999 Pest control
Enviro-Vac . . . . . . . . . . 9/26/1999 Testing, pumping and treating grease trap
Canon Financial Services, Inc. 3/31/1999 Equipment lease
Ikon . . . . . . . . . . . . . 10/24/2001 Maintenance agreement for copier
Pro Lawn . . . . . . . . . . . 11/6/2001 Lawn maintenance
ADT Security Services, Inc.. . 11/1/1998 Equipment lease
Xxxxxxxx Xxxx. . . . . . . . . 2/21/2002 Beauty shop agreement
Time Warner Cable. . . . . . . 9/7/1999 Cable television
Bayou Security systems, Inc. . 6/1/2001 Fire alarm inspection agreement
Bayou Security systems, Inc. . 6/1/2001 Alarm monitoring agreement
