Exhibit 10.6
PURCHASE AND SALE AGREEMENT
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THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is entered into
effective as of March 31, 1998, by and between BLC OF TEXAS-II, L.P., a Delaware
limited partnership ("Seller"), and AH TEXAS OWNER LIMITED PARTNERSHIP, an Ohio
limited partnership("Purchaser"). Any and all capitalized terms used herein and
not otherwise defined shall have the meanings assigned to such terms in the
Development Agreement (as such term is defined below).
W I T N E S S E T H:
WHEREAS, Seller owns that certain land located west and south of Xxxxxx
Ranch Loop and north of MoPac Expressway (Loop 1) in Xxxxxx County, Texas
consisting of approximately 4 acres and legally described on Exhibit A attached
hereto, together with all improvements thereon (such land and improvements shall
hereinafter together be referred to as the "Land");
WHEREAS, Seller desires to sell all of its interests in and to the Property
(as hereinafter defined) to Purchaser;
WHEREAS, Purchaser desires to purchase the Property from Seller in
accordance with the terms and provisions described in this Agreement;
WHEREAS, there is currently being constructed on the Land a senior
independent and assisted living facility (the "Facility") to consist of
approximately 220 units, which Facility is being constructed pursuant to that
certain Construction Contract Cost Plus With Guaranteed Maximum Cost (the
"Construction Contract"), dated as of December 15, 1997, between Seller and
Constructors & Associates, Incorporated (the "Contractor") and pursuant to the
plans and specifications for the Facility prepared by Xxxxxx Xxxxxxxx and
Associates, Ltd. and incorporated by reference in the Construction Contract;
WHEREAS, concurrent with the execution and delivery hereof, Seller and
Purchaser are executing and delivering that certain Development Agreement (the
"Development Agreement") pursuant to which Seller agrees to continue the
construction and development of the Facility (which have heretofore been
conducted by Brookdale Living Communities, Inc. ("BLCI"))upon the terms set
forth in the Development Agreement; and
WHEREAS, the parties now desire to enter into this Agreement to provide for
the sale by Seller of its interests in the Property to Purchaser, all on the
terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual agreements contained herein
and for good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Purchaser and Seller do hereby agree as follows:
1. The Property. For purposes of this Agreement, the term "Property"
shall mean any and all interests of Seller in the following items subject to the
Permitted Exceptions (as hereinafter defined): (i) the Land, (ii) all personal
property and other tangible property now or hereafter located on the Land or
used in connection with the construction, development, operation or maintenance
of the Land, including, but not limited to, fixtures and equipment, other than
personal property and other tangible property necessary or appropriate for
Seller to retain in order to perform its obligations under the Development
Agreement, and (iii) all intangible property now or hereafter used in connection
with the operation or maintenance of the Land, including, but not limited to,
contracts, agreements, guaranties, plans and specifications, licenses, books and
records and all other items and instruments pertaining to the Land except as
described in the Development Agreement and other than intangible property
necessary or appropriate for Seller to retain in order to perform its
obligations under the Development Agreement. "Permitted Exceptions" shall mean
(i) those exceptions listed on Exhibit B attached hereto, (ii) Seller's rights
to reacquire the Property pursuant to Section 8 of this Agreement and (iii) any
rights or interests of any contractors or subcontractors for work done on the
Land that has not been fully paid for as of the Closing. Purchaser acknowledges
that Seller has commenced construction of certain improvements on the Land which
have not been fully paid for as of the date of this Agreement.
2. Purchase and Sale of Property. On the terms and subject to the
conditions set forth in this Agreement, Seller hereby agrees to convey, transfer
and assign to Purchaser, on the Closing Date (as defined in Section 3 below),
Seller's entire right, title and interests in and to the Property for an
aggregate amount equal to Five Million Three Hundred Sixteen Thousand Three
Hundred Forty and 53/100 Dollars ($5,316,340.53) (the "Purchase Price"). The
Purchase Price shall be paid to Seller as follows: (a) on the Closing Date
Purchaser shall pay Seller the sum (the "Cash Portion") of One Million Three
Hundred Thousand and no/100 Dollars ($1,300,000.00), which Cash Portion shall be
paid by wire transfer of immediately available funds to an account designated by
Seller, and (b) on the Closing Date, Purchaser shall deliver to Seller a
promissory note (the "Note") substantially in the form of Exhibit C attached
hereto, payable to the order of Seller in the original principal amount of Four
Million Sixteen Thousand Three Hundred Forty and 53/100 Dollars ($4,016,340.53).
The repayment of the Note and the obligations of Purchaser under this Agreement
and the Development Agreement shall be guarantied (a) by AH Texas Subordinated,
LLC ("AH Subordinated"),an Ohio limited liability
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company and the owner of a ninety-nine percent (99%) limited partnership
interest in Purchaser and the owner of all of the issued and outstanding stock
of AH Texas CGP, Inc. ("AH CGP"), an Ohio corporation and the owner of a one
percent (1%) general partnership interest in Purchaser, and (b) by AH CGP, in
each case pursuant to a non-recourse Guaranty (the "Guaranty"), with all of the
obligations of AH Subordinated and AH CGP under the Guaranty being secured by a
pledge of all of the interests in Purchaser held by AH Subordinated and AH CGP.
Except as expressly contained herein, Seller shall be solely responsible for all
closing costs in connection with the transaction contemplated by this Agreement
(the "Closing Costs. In addition to the Purchase Price, Purchaser shall assume
and agrees to pay, in accordance with the terms of the Development Agreement,
all costs, expenses and obligations incurred by Seller through and including the
Closing in connection with the development and construction of the Facility
which have not been paid as of the Closing Date, which costs, expenses and
obligations include, but are not necessarily limited to, retainage held back
from the Contractor pursuant to the Construction Contract ($63,626.89 as of
February 28, 1998) and accrued developer's fees payable by Seller to BLCI
($662,221.27 as of February 28, 1998), and agrees to reimburse Seller for the
Closing Costs in accordance with the terms of the Development Agreement.
3. Closing. The closing ("Closing") of the purchase and sale of the
Property shall occur on a date designated by Seller, but in no event later than
March 31, 1998, unless otherwise agreed by the parties hereto. The Closing
shall take place at the offices of Miller, Canfield, Paddock and Stone. The
time and date of such Closing are herein called the "Closing Date".
4. Representations and Warranties of Seller. Seller represents, warrants
and covenants to Purchaser that, as of the date hereof and the Closing Date:
(a) Seller is the owner of the Property subject to the Permitted Exceptions and
has full power and authority to sell, convey, assign and transfer to Purchaser
the Property, free and clear of all liens and encumbrances except the Permitted
Exceptions; (b) Seller has full capacity, right, power and authority to execute,
deliver and perform this Agreement and all documents pursuant hereto, and all
required actions and approvals therefor have been duly taken and obtained; (c)
this Agreement and all documents to be executed pursuant hereto by Seller are
and shall be binding upon and enforceable against Seller in accordance with
their respective terms; and (d) there are no litigation or other proceedings
pending against Seller which could have a material adverse effect on Seller's
ability to consummate the transaction contemplated hereby. The representations
and warranties of Seller set forth above shall be deemed remade on the Closing
Date, and shall survive the Closing and the recording of the deed.
5. Representations and Warranties of Purchaser. Purchaser represents,
warrants and covenants to Seller that, as of the date
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hereof and the Closing Date: (a) Purchaser has full partnership power and
authority to execute, deliver and perform this Agreement and all documents
pursuant hereto, and all required partnership actions and approvals therefor
have been duly taken and obtained; (b) this Agreement and all documents to be
executed pursuant hereto by Purchaser are and shall be binding upon and
enforceable against Purchaser in accordance with their respective terms; and (c)
there are no litigation or other proceedings pending against Purchaser which
could have a material adverse effect on Purchaser's ability to consummate the
transaction contemplated hereby. The representations and warranties of Purchaser
set forth above shall be deemed remade on the Closing Date, and shall survive
the Closing and the recording of the deed.
6. Seller's Deliveries at Closing. In addition to this Agreement and the
Development Agreement, Seller shall deliver to Purchaser at the Closing the
following items:
(a) Xxxx of Sale. A xxxx of sale conveying, transferring and otherwise
assigning to the Purchaser any and all of the Property, other than the real
estate.
(b) Special Warranty Deed. Special Warranty Deed for the Land subject
to the Permitted Exceptions.
(c) Other Documents. Such other documents which are necessary to
complete and perfect the conveyance of Property to the Purchaser as
contemplated by this Agreement, including, without limitation, any transfer
declarations, owner's affidavits and undertakings required by the title
company and similar items required by local law or the title company.
7. Purchaser's Deliveries at Closing. In addition to this Agreement, the
Development Agreement and the Note, Purchaser shall cause AH Subordinate and AH
CGP to deliver to Seller the Guaranty and the pledge agreement or pledge
agreements contemplated by Section 2 hereof, and shall deliver, or cause to be
delivered to Seller at the Closing such other documents which are necessary to
complete and perfect the conveyance of Property to Purchaser as contemplated by
this Agreement, including, without limitation, any transfer declarations,
owner's affidavits and undertakings required by the title company and similar
items required by local law or the title company.
8. Repurchase Right. If (a) by June 30, 1998 Purchaser fails to obtain
and cause to be funded financing from Nomura Asset Capital Corporation and Banc
One Capital Corporation, or one of their respective affiliates, generally
consistent with the provisions of the term sheets or commitments previously
issued with respect to the Property and otherwise acceptable to Seller (the
"Financing"), or (b) prior to the closing of the Financing, Purchaser elects to
transfer (directly or indirectly) its
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ownership interest in the Property, or Purchaser, AH CGP or AH Subordinate
violates any provision of its organizational documents, then, in either (or
both) of such events, Seller shall have the right to repurchase the Property
from Purchaser for an amount (as increased pursuant to the immediately following
sentence, the "Repurchase Price") equal to the Purchase Price less the Cash
Portion. The Repurchase Price shall increase by nine percent (9%) per annum from
the Closing Date until the closing of the reconveyance of the Property pursuant
to this Section 8. The Repurchase Price may be payable, in part, by the
cancellation of the Note. If Seller elects to repurchase the Property, Purchaser
shall deliver title and conveyance documents to Seller which are equivalent to
those delivered to Purchaser at the Closing (except for any title matters,
including mechanics' liens, created by or relating to Seller, and except that
Purchaser shall clear any title matters created by or relating to Purchaser). In
addition, at the closing of the reconveyance of the Property pursuant to this
Section 8, Seller shall assume all of Purchaser's obligations under the
Development Agreement. Purchaser's obligations and Seller's rights under this
Paragraph Section 8 shall be set forth in the documents recorded at the Closing.
If Seller elects to exercise the repurchase right provided for herein, Seller
must give notice of such election not later than July 31, 1998. The closing of
the reconveyance of the Property to Seller, and the payment to Purchaser of the
Repurchase Price therefor, shall occur not later than the later of (i) thirty
(30) days after Seller gives Purchaser notice of Seller's election to repurchase
the Property, or (ii) five (5) days after Purchaser has completed clearance of
any title matters required to be cleared by Purchaser (except for clearance of
matters to be paid and released at the repurchase closing, using any cash paid
in payment of the Repurchase Price). The provisions of this Section 8 shall
survive the Closing.
9. Miscellaneous.
(a) No Brokerage. Each party hereto represents and warrants to the other
parties hereto that it has not incurred any obligation or liability, contingent
or otherwise, for brokerage or finder's fees or agent's commissions or other
like payment solely in connection with this Agreement or the sale of the
Property contemplated hereby and each party agrees to indemnify and hold the
other parties hereto harmless against and in respect of any such obligation or
liability based in any way on agreements, arrangements or understandings claimed
to have been made by such party with any third party.
(b) Survival of Representations, Warranties and Agreements. The
representations, warranties and agreements of the parties contained in this
Agreement shall survive the Closing Date.
(c) Notices. All notices, requests, demands and other communications
which are required or may be given under this
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Agreement shall be in writing and shall be deemed to have been duly given if
delivered personally or sent by telex, or sent by United States mail, certified
or registered, postage prepaid, with return receipt requested, or otherwise
actually delivered, addressed to the parties hereto at the addresses set forth
in the Development Agreement.
(d) Entire Agreement. This Agreement (including the exhibits and
schedules hereto) constitutes the entire agreement among the parties hereto and
supersedes all prior agreements and understandings, oral and written, among the
parties hereto with respect to the subject matter hereof.
(e) Binding Effect; Benefit. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and each other person who is indemnified
under any provision of this Agreement and their respective successors and
assigns. Nothing in this Agreement, expressed or implied, is intended to confer
on any person other than the parties hereto and/or each other person who is
indemnified under any provision of this Agreement or their respective successors
and assigns, any rights, remedies, obligations or liabilities under or by reason
of this Agreement.
(f) Amendment; Waiver. No provision of this Agreement may be amended,
waived or otherwise modified without the prior written consent of the parties
hereto.
(g) Section Headings. The section headings contained in this Agreement
are for reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
(h) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.
(i) Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the state where the Land is located.
10. Limitation of Personal Liability. Notwithstanding any other provision
of this Agreement to the contrary, in no event shall any officer, director,
member, partner, manager, shareholder, incorporator or agent of Purchaser or of
Purchaser's affiliates be personally liable to Seller for any of Purchaser's
obligations under this Agreement, except as expressly provided in the Guaranty
and the Collateral Assignment (as defined in the Guaranty).
[Signature page follows]
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IN WITNESS WHEREOF, the undersigned have executed and delivered this
Agreement as of the date first above written.
SELLER:
BLC OF TEXAS-II, L.P.
By: Brookdale Living Communities of
Texas-II, Inc.
Its Managing General Partner
By:__________________________
Name:________________________
Its:_________________________
PURCHASER
AH TEXAS OWNER LIMITED PARTNERSHIP
By: AH Texas CGP, Inc.
Managing General Partner
By:__________________________
Name:________________________
Its:_________________________
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EXHIBIT A
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LEGAL DESCRIPTION
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Lot Two (2), Block "A", RESUBDIVISION OF XXX 0, XXXXX X, XXXXXX XXXXX XXX,
SECTION ONE, a subdivision in Xxxxxx County, Texas, according to the map or plat
thereof, recorded in Volume 99, Page(s) 175-176 of the Plat Records of Xxxxxx
County, Texas.
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EXHIBIT B
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PERMITTED EXCEPTIONS
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The Repurchase Right set forth in Section 8 of the foregoing Purchase and Sale
Agreement and all restrictions, easements and other matters of record applicable
to the Property, other than liens.
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EXHIBIT C
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FORM OF PROMISSORY NOTE
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