SECOND AMENDMENT TO ASSET PURCHASE AGREEMENT
EX-10.71.06
SECOND
AMENDMENT TO ASSET PURCHASE AGREEMENT
THIS
SECOND AMENDMENT TO ASSET PURCHASE AGREEMENT (this “Second Amendment”) is made as of the
16th
day of October, 2008, by and between EMERITUS CORPORATION, a Washington
corporation (“Buyer”),
and HEALTH CARE REIT, INC., a Delaware corporation (“HCN”), together with the
affiliates of HCN listed on the signature pages hereto (individually and
collectively with HCN, “Seller”).
R
E C I T A L S
A. Buyer and
Seller entered into that certain agreement (as amended, the “Agreement”) captioned “ASSET
PURCHASE AGREEMENT,” dated as of June 9, 2008, as amended by that certain
First Amendment to Asset Purchase Agreement (the “First Amendment”) dated as of
June 30, 2008. Capitalized terms used and not defined in this
Second Amendment shall have the meanings ascribed to them in the
Agreement.
B. The
Closing on Tranche 1 occurred on June 30, 2008.
C. Buyer
exercised an initial option to extend the Tranche 2 Closing Deadline until
December 1, 2008, by delivering notice thereof to Seller on
September 29, 2008.
D. Buyer
would like to have the flexibility to close Tranche 2 in separate closings
on separate days, as described herein.
E. Buyer and
Seller have agreed to amend the Agreement as described below.
Agreements
NOW,
THEREFORE, for and in consideration of the foregoing Recitals, and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Section 1.4
of the Agreement is hereby amended to read in its entirety as
follows:
1.4 Close in
Tranches. The sale of the Assets shall be closed in
two separate tranches (each a “Tranche”) with the
Tranche 1 Facilities closed in “Tranche 1” as designated
on Schedule 2-A and with the Tranche 2 Facilities closed in “Tranche 2” as designated
on Schedule 2-B. The Closing on Tranche 2 may be
bifurcated, and the closings on the Tranche 2 Facilities to be purchased in part
using a loan from Xxxxxxx Mac (“Tranche 2 Xxxxxxx Mac
Closing”) and the Tranche 2 Facilities to be purchased in part using a
loan from KeyBank (“Tranche 2 KeyBank
Closing”), as each is designated on Schedule 2-B, may occur in
separate closings on separate days with the Tranche 2 Xxxxxxx Mac Closing first,
but both closings must occur no later than the Tranche 2 Closing
Deadline. (The closings may individually or collectively be referred
to herein as a “Closing”). Concurrently
with each Closing, Buyer and Seller shall amend the Master Lease 1 and the
Master Lease 2, as applicable, to delete the sold Facilities and adjust the
Investment Amount (as defined therein) and corresponding
provisions.
2. Section 2.1
of the Agreement is hereby amended to read in its entirety as
follows:
2.1 Purchase
Price. The “Tranche 1 Purchase Price”
and the allocated purchase price for each Tranche 1 Facility is set forth
on Schedule 2-A and the “Tranche 2 Purchase Price”
and the allocated purchase price for each Tranche 2 Facility is set forth
on Schedule 2-B, along with the portion of the Tranche 2 Purchase Price
payable at the Tranche 2 Xxxxxxx Mac Closing (“Tranche 2 Xxxxxxx Mac Purchase
Price”) and the portion payable at the Tranche 2 KeyBank Closing (“Tranche 2 KeyBank Purchase
Price”). The total of the Tranche 1 Purchase Price and
the Tranche 2 Purchase Price is $299,819,368.00 (the “Purchase
Price”). All cash payments shall be payable in immediately
available funds by wire transfer to an account designated by
Seller.
3. Section 2.4
of the Agreement is hereby amended to read in its entirety as
follows:
2.4 Deposit at Closing; Failure
to Close; Remedies. [i] In the event that each Tranche
shall close as provided herein, $299,804.91 of the Deposit shall be applied
against the Tranche 2 Xxxxxxx Mac Purchase Price payable at the Tranche 2
Xxxxxxx Mac Closing and the balance of the Deposit shall be applied against the
Tranche 2 KeyBank Purchase Price payable at the Tranche 2 KeyBank Closing;
provided, however, that the foregoing shall apply only if the Tranche 2 Xxxxxxx
Mac Closing occurs first, and if not, then the Deposit will be proportionately
allocated to the Tranche 2 Xxxxxxx Mac Closing and the Tranche 2 KeyBank Closing
based on the respective Tranche 2 Xxxxxxx Mac Purchase Price and the Tranche 2
KeyBank Purchase Price. [ii] In the event that Buyer has not
terminated this Agreement within the Due Diligence Period pursuant to
Section 2.3, and either the Tranche 2 Xxxxxxx Mac Closing or the Tranche 2
KeyBank Closing shall fail to close as provided herein due to Buyer's default
under this Agreement, then, as liquidated damages, any remaining Deposit not yet
applied shall be retained by Seller and Buyer shall pay Seller the reasonable
amount of out-of-pocket costs incurred by Seller in connection with the
Acquisition. The retention of the Deposit and receipt of such
out-of-pocket costs as liquidated damages shall be Seller’s sole and exclusive
remedy for such failure to close, at law or in equity; provided, however, such
retention of the Deposit by Seller and its receipt of such out-of-pocket costs
shall not limit, release or otherwise affect Buyer’s indemnity obligations under
this Agreement and under the Master Lease Documents. [iii] In
the event that Buyer has not terminated this Agreement within the Due Diligence
Period pursuant to Section 2.3, and either the Tranche 2 Xxxxxxx Mac
Closing or the Tranche 2 KeyBank Closing shall fail to close as provided herein
due to Seller’s default under this Agreement, then as liquidated damages, any
remaining Deposit shall be returned to Buyer and Seller shall pay Buyer the
reasonable amount of out-of-pocket costs incurred by Buyer in connection with
the Acquisition. The return of the Deposit and receipt of such
out-of-pocket costs as liquidated damages shall be Buyer’s sole and exclusive
remedy for such failure to close, at law or equity. [iv] In the
event that Buyer has not terminated this Agreement within the due diligence
period pursuant to Section 2.3, if any Closing does not occur for any
reason other than Buyer's or Seller’s default under this Agreement, then any
remaining Deposit shall be retained by Seller after payment to Buyer of its
reasonable out-of-pocket costs incurred in connection with the
Acquisition.
4. Closing Deadline. The
Closing on Tranche 1 occurred on June 30, 2008. Buyer
exercised an initial option to extend the Tranche 2 Closing Deadline until
December 1, 2008,
pursuant
to Section 3.1 of the Agreement. Notwithstanding the foregoing,
Buyer shall have a second option to extend the Tranche 2 Closing Deadline
until December 31, 2008, as described in Section 3.1.
5. Section 3.4
of the Agreement is hereby deleted and replaced with the following:
3.4 Closing
Costs.
a. Seller
shall pay the costs for real property transfer taxes, conveyance fees, deed
stamps (if applicable) and title insurance premiums for an owner’s policy
(except for the cost of any special endorsements) (collectively, “Seller Closing Costs”) up to
$1,125,000 for the Closing on Tranche 1, up to $190,000 (the “Xxxxxxx Mac Closing Payment
Cap”) for the Tranche 2 Xxxxxxx Mac Closing, and up to $185,000 (the
“KeyBank Closing Payment
Cap”) for the Tranche 2 KeyBank Closing; provided that (i) if the
amounts actually incurred by Seller for Seller Closing Costs in connection the
Tranche 2 Xxxxxxx Mac Closing are less than the Xxxxxxx Mac Closing Payment Cap,
any unused portion of the Xxxxxxx Mac Closing Payment Cap shall be added to the
KeyBank Closing Payment Cap, (ii) if the amount of the Seller Closing Costs on
the Tranche 2 Xxxxxxx Mac Closing exceeds the Xxxxxxx Mac Closing Payment Cap,
but the Seller Closing Costs on the Tranche 2 KeyBank Closing are less than the
KeyBank Closing Payment Cap, Buyer shall be entitled to a credit against the
Tranche 2 KeyBank Purchase Price equal to the lesser of (A) the amount by which
the amount of the Seller Closing Costs on the Tranche 2 Xxxxxxx Mac Closing
exceeded the Xxxxxxx Mac Closing Payment Cap, and (B) the amount by which the
KeyBank Closing Payment Cap exceeds the Seller Closing Costs on the Tranche 2
KeyBank Closing, and (iii) in no event shall the amount of Seller Closing Costs
paid by Seller under the Tranche 2 Xxxxxxx Mac Closing and the Tranche 2 KeyBank
Closing, plus any credit against the Tranche 2 KeyBank Purchase Price provided
for in clause (ii) above, exceed $375,000; further provided, however, such costs
shall not include any costs (and shall be solely Buyer’s responsibility) of
curing title defects that Title Company would not insure but which Lawyer’s
Title Corporation of America has noted in writing that it would
insure.
b. Buyer
shall pay all other closing costs for each Closing of the Acquisition, the
Acquisition Loan and the Seller Loan (excluding Lender's or Seller's legal
fees), including, but not limited to, the following:
i. real
property transfer taxes, conveyance fees, and deed stamps (if
applicable);
ii. all due
diligence expenses, including survey, environmental reports, property condition
reports and appraisals;
iii. title
insurance premiums, title search and commitment fees, and the cost of any
closing escrow or escrow agent; and
iv. recording
fees.
6. Authorization. Each
of the parties hereto represents to the other that it has the legal power, right
and authority to enter into this Second Amendment and that the individuals
executing this Second Amendment on behalf of each of Seller and Buyer have the
legal power,
right and
actual authority to bind Seller and Buyer, respectively, to the terms and
conditions hereof.
7. Entire
Agreement. This Second Amendment, together with the Agreement,
contains all of the agreements of the parties hereto with respect to any matter
covered or mentioned in the Agreement, and no other agreement, understanding or
representation pertaining to any such matter shall be effective for any
purpose. Except as amended hereby, the Agreement shall remain in full
force and effect in accordance with its terms and is hereby
ratified. In the event of a conflict between the Agreement and this
Second Amendment, this Second Amendment shall control.
8. Counterpart
Execution. This Second Amendment may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which counterparts when so executed will be deemed to be an original and all
of which taken together will constitute one and the same Second Amendment,
binding on the parties, and the signature of any party to any counterpart will
be deemed a signature to, and may be appended to, any other
counterpart. This Second Amendment may be delivered by facsimile or
electronic mail transmission. This Second Amendment will be effective
if each party hereto has executed and delivered at least one counterpart
hereof.
[THE
REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
IN
WITNESS WHEREOF, the parties hereto have executed this Second Amendment as of
the date first above written.
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Seller:
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HEALTH
CARE REIT, INC.
By:
/s/ Xxxx X Xxxxx
Title:
Senior Vice
President Administration
and Secretary
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HCRI
MISSISSIPPI PROPERTIES, INC.
By: /s/ Xxxx X Xxxxx
Title: Senior Vice
President Administration
and Secretary
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HCRI
MASSACHUSETTS PROPERTIES TRUST II
By:HCRI
Massachusetts Properties, Inc., as Trustee, and not individually and
subject to the provisions of the Declaration of Trust of HCRI
Massachusetts Properties Trust II filed with the Secretary of the
Commonwealth of Massachusetts and the City Clerk of Boston
By: /s/ Xxxx X Xxxxx
Title: Senior Vice
President Administration
and Secretary
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HCRI
TEXAS PROPERTIES, LTD.
By:Health
Care REIT, Inc., General Partner
By: /s/ Xxxx X Xxxxx
Title: Senior Vice
President Administration
and Secretary
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HCRI
XXXX XXXX PROPERTIES TRUST
By:HCRI
Massachusetts Properties, Inc., as Trustee, and not individually and
subject to the provisions of the Declaration of Trust of HCRI Xxxx Xxxx
Properties Trust filed with the Secretary of the Commonwealth of
Massachusetts and the City Clerk of Boston
By:
/s/ Xxxx X Xxxxx
Title: Senior Vice
President Administration
and Secretary
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HCRI
NEVADA PROPERTIES, INC.
By: /s/ Xxxx X Xxxxx
Title: Senior Vice
President Administration
and Secretary
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HCRI
KANSAS PROPERTIES, LLC
By:Health
Care REIT, Inc., Sole Member
By: /s/ Xxxx X Xxxxx
Title: Senior Vice
President Administration
and Secretary
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HCRI
STONECREEK PROPERTIES, LLC
By:Health
Care REIT, Inc., Sole Member
By: /s/ Xxxx X Xxxxx
Title: Senior Vice
President Administration
and Secretary
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Buyer:
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EMERITUS
CORPORATION
By: /s/ Xxxx Xxxxxxxxxx
Title:
SVP Corporate
Development
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