EXHIBIT 2.3.2
FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT
THIS FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT ("Amendment") is made
as of June 10, 2005, by and between SHP PACIFIC INN, LLC; SHP XXXX RANCH, LLC;
SHP GABLES, LLC; SHP OAK TREE VILLA, LLC; SHP LEXINGTON, LLC; SHP INN AT THE
PARK, LLC; SHP XXXXXX CREEK, LLC; SHP MIRAGE INN, LLC; AND SHP OCEAN HOUSE, LLC,
each a Delaware limited liability company (collectively, "Seller"), and FIT REN
LLC, a Delaware limited liability company ("Buyer").
RECITALS
Seller and Buyer did enter into that certain Purchase and Sale Agreement,
dated March 16, 2005 ("Agreement") pursuant to the terms of which Seller agreed
to sell to Buyer and Buyer agreed to purchase from Seller certain Property
consisting of nine (9) senior housing facilities located in the State of
California.
Seller and Buyer desire to modify the Agreement to provide for the Closing
Date to occur promptly with respect to all of the Property other than the
Facility known as Ocean House, located in Santa Monica California (the "Ocean
House Facility") and desire to extend the Closing Date with respect to the Ocean
House Facility, all on the terms and conditions set forth in this Amendment.
NOW, THEREFORE, for and in consideration of the mutual covenants and
obligations set forth in the Agreement and in this Amendment and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties do hereby agree to amend the Agreement as follows:
1. The Closing Date with respect to all of the Property other than the
Ocean House Facility (the "Primary Closing"), shall occur not later
than June 27, 2005 but the parties shall use commercially reasonable
efforts to accomplish the Primary Closing on or before June 21,
2005.
2. As a result of the exclusion of the Ocean House Facility from the
Property to be conveyed at the Primary Closing, the Purchase Price
for the portion of the Property (excluding the Ocean House Facility)
shall be Two Hundred Fifty-Four Million, Five Hundred and Sixty-Four
Thousand and No/100 Dollars ($254,564,000.00), to be allocated among
the remaining eight (8) Facilities as shown on Schedule 1(b) to the
Agreement, and subject to adjustment and proration as provided in
the Agreement and as set forth below in this Amendment.
3. Seller and Buyer acknowledge and agree that any and all time periods
provided for in the Agreement which begin to run from the Closing
Date shall be deemed to run from the Primary Closing, specifically
including, without limitation, the time periods set forth in Section
15.15 of the Agreement and the time periods set
forth in the paragraph immediately preceding the signature of Senior
Housing Partners I, L.P. ("SHP"); provided, however, that any
liabilities or obligations that, pursuant to the terms of the
Agreement arise or accrue at Closing, shall not arise or accrue with
respect to the Ocean House Facility unless and until the Ocean House
Closing occurs, but the time period for any such liabilities or
obligations (specifically including the expiration date of all the
time periods set forth in Section 15.15. of the Agreement) shall
expire on the same date the time periods expire with respect to the
remainder of the Property.
4. Buyer hereby acknowledges that, with respect to the Property
included in the Primary Closing: (i) the conditions to Closing with
respect to the obtaining of governmental approvals (as set forth in
Section 8.2(d)) and the obtaining of the SNF Estoppel (as set forth
in Section 8.2(e)) have been satisfied by Seller or waived by Buyer;
(ii) subject to the credit provided for in Section 5 of this
Amendment, Seller has fulfilled all of Seller's obligations under
Section 10.2.2(c) of the Agreement and that Buyer will have no claim
whatsoever against Seller with respect to any termite infestation
existing on any portion of the Property or any termite damage
existing on any portion of the Property; and (iii) subject to the
credit provided for in Section 5 of this Amendment, Buyer hereby
waives the requirement set forth in Section 7.3(n) for the delivery
of a zoning letter with respect to the Facility known as Xxxx Ranch.
5. Seller has agreed to provide Buyer a credit against the Purchase
Price at the Primary Closing with respect to three (3) items:
(i) with respect to certain repair work for the balconies at the
Facility known as Oak Tree, Seller has agreed to provide Buyer
a credit in the amount of $190,000.00 and Buyer will assume
the obligation to complete such repair work at Buyer's sole
cost and expense (Seller will assign its contract with respect
to such work to Buyer if Buyer so desires);
(ii) with respect to the installation of certain fire doors at the
Facility known as Xxxx Ranch, Seller has agreed to provide
Buyer a credit in the amount of $25,000.00 and Buyer will
assume all obligations to install the fire doors and to obtain
any necessary approvals and signoffs from applicable
governmental authorities which are contingent upon the
installation of such fire doors; and
(iii) with respect certain roof repair work at the Facility known as
Pacific Inn, Seller has agreed to provide Buyer a credit in
the amount of $6,000.00 and Buyer will assume all obligations
to perform the necessary roof repair work.
Buyer will cause the work (for which the credits provided above are
being given) to be completed expeditiously following the Primary
Closing and in a commercially reasonable manner. If the cost to
complete any of the items is less than or exceeds the credit
provided above, the parties will reconcile the amounts
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as part of the true-up of prorations and credits contemplated by
Section 6.7 of the Agreement.
6. The Closing with respect to the Ocean House Facility ("Ocean Housing
Closing") shall occur on or before June 30, 2005 (as the same may be
extended "Ocean House Closing Date"), so long as Seller has been
able to obtain and deliver the Ground Lease Estoppel on or before
June 27, 2005 and has delivered a copy thereof to Buyer; provided,
however, that if Seller has not been able to obtain the Ground Lease
Estoppel by June 27, 2005, either party shall have the right, in its
sole discretion, by written notice to the other party on or before
June 28, 2005, to elect to extend the Closing Date for the Ocean
House Facility for the period up through and including July 22,
2005, while the parties continue to work together, in good faith, to
attempt to obtain the Ground Lease Estoppel.
7. The Purchase Price for the Ocean House Facility at the Ocean House
Closing shall be Twenty Seven Million, Eight Hundred Eighty-Three
Thousand and No/100 Dollars ($27,883,000.00), subject to proration
and adjustment as provided in the Agreement. The Deposit shall not
be applied to the Purchase Price at the Primary Closing but shall
continue to be held and disbursed by the Escrow Agent in accordance
with the terms of the Agreement and this Amendment. To Buyer's
knowledge all actions necessary to obtain the governmental approvals
for the Ocean House Facility have been taken and all conditions to
the issuance of the governmental approvals for the Ocean House
Facility have been satisfied and, to Buyer's knowledge, the
governmental approvals for the Ocean House Facility will be issued
concurrently with the Ocean Housing Closing.
8. With respect to the Ground Lease Estoppel, Seller and Buyer both
agree to use commercially reasonable efforts to obtain the Ground
Lease Estoppel. Notwithstanding the foregoing, neither party shall
be required to pay any money, agree to any revisions to the Ground
Lease or to enter into any other agreements with, or to acquire any
services or products from, the lessors under the Ground Lease (or
any individuals or entities affiliated with such lessors). If the
lessor under the Ground Lease demands a guaranty ("Fortress
Guaranty") from Fortress Investment Trust II ("Fortress") as a
condition to providing the Ground Lease Estoppel, Buyer will cause
Fortress to provide a guaranty substantially similar to the guaranty
provided by SHP at the xxxx Xxxxxx acquired the Ocean House
Facility; provided, however, as a condition to providing such
Fortress Guaranty, Buyer may insist on provisions allowing such
Fortress Guaranty to be transferred to an affiliated entity (and
Fortress being released from the Fortress Guaranty) in connection
with the roll-up transaction Fortress is anticipating undertaking in
the near future. Seller shall not be deemed to be in violation of
its duty to use commercially reasonable efforts to obtain the Ground
Lease Estoppel if Seller elects to require that the lessors under
the Ground Lease release SHP from its Guaranty as part of the
assignment of the Ground Lease to Buyer and the providing of the
Fortress Guaranty. If, despite both parties using commercially
reasonable efforts, Seller is unable to obtain the Ground Lease
Estoppel on or
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before three (3) business days prior to the last date for the Ocean
House Closing Date set forth herein, then the Deposit shall be
refunded to Buyer, Seller shall have no liability whatsoever for
failing to obtain the Ground Lease Estoppel and neither party shall
have any further rights, duties or obligations to each other with
respect to the Ocean House Facility. However, (i) if Buyer refuses
to provide the Fortress Guaranty (on the terms and conditions
provided herein) or otherwise does not use commercially reasonable
efforts (on the terms and conditions provided herein) to cooperate
with Seller in Seller's attempts to obtain the Ground Lease Estoppel
then, on the day following the scheduled Ocean House Closing Date,
the Deposit shall be paid to Seller and shall not be refunded to
Buyer and neither Seller nor Buyer shall have any further rights,
duties or obligations to each other with respect to the Ocean House
Facility, and (ii) if Seller does not use commercially reasonable
efforts (on the terms and conditions provided herein) to obtain the
Ground Lease Estoppel, the Deposit shall be refunded to Buyer and
Buyer shall also be entitled to be reimbursed by Seller for Buyer'
reasonable costs and expenses, including attorneys' fees, incurred
in connection with the Ocean House Facility (and not with respect to
any other Facility or any other aspect of this transaction) and
neither Seller nor Buyer shall have any further rights, duties or
obligations to each other with respect to the Ocean House Facility.
9. Pursuant to the provisions of Section 15.23 of the Agreement, Seller
has provided a representation letter to Buyer's accounting firm,
Xxxxxx & Young, and has also caused its Property Manager to provide
representation letter to Xxxxxx & Xxxxx. Buyer hereby acknowledges
and agrees that the delivery of such letters by Seller and its
Property Manager to Buyer's accountants shall not be deemed, in any
way whatsoever, to enlarge upon or expand upon the representations
and warranties made by Seller under Section 9.2 (or any other
provision) of the Agreement. Buyer will have no right whatsoever to
pursue any action against Seller with respect to the representations
contained in the letters provided by Seller or its Property Manager
to Xxxxxx & Young in connection with such financial information.
Buyer's only rights to pursue an action against Seller with respect
to any alleged breach of Seller's Warranties shall be with respect
to the specific Seller's Warranties set forth in the Agreement and
Buyer's rights to pursue any such action shall be subject to all of
the conditions and limitations set forth in the Agreement with
respect to those Seller's Warranties.
10. Any capitalized terms used in this Amendment which are not defined
herein shall have the definitions attributed to those terms in the
Agreement. The terms of this Amendment are intended to modify and
control over any and all of the provisions of the Agreement. This
Amendment may be executed in separate counterparts which, when taken
together, shall constitute one complete original. Time is of the
essence with respect to any dates set forth in this Amendment.
Except as modified herein, the Agreement remains in full force and
effect.
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[SIGNATURES BEGIN ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, each party hereto has caused this Agreement to be duly
executed on its behalf on the day and year first above written.
SELLER:
SHP PACIFIC INN, LLC, a Delaware limited liability
company
By: Senior Housing Partners I, L.P., a Delaware limited
partnership, as the sole Managing Member thereof
By: Senior Housing Partners I, L.L.C., a Delaware
limited liability company, its general partner
By: The Prudential Insurance Company of America, a
New Jersey corporation, its Managing Member
By: /s/ Xxxx X. Xxxx
----------------------
Name: Xxxx X. Xxxx
Title: Vice President
SHP XXXX RANCH, LLC, a Delaware limited liability company
By: Senior Housing Partners I, L.P., a Delaware limited
partnership, as the sole Managing Member thereof
By: Senior Housing Partners I, L.L.C., a Delaware
limited liability company, its general partner
By: The Prudential Insurance Company of America, a
New Jersey corporation, its Managing Member
By: /s/ Xxxx X. Xxxx
---------------------------
Name: Xxxx X. Xxxx
Title: Vice President
[SIGNATURES CONTINUED ON FOLLOWING PAGES]
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SHP GABLES, LLC, a Delaware limited liability company
By: Senior Housing Partners I, L.P., a Delaware limited
partnership, as the sole Managing Member thereof
By: Senior Housing Partners I, L.L.C., a Delaware
limited liability company, its general partner
By: The Prudential Insurance Company of America,
a New Jersey corporation, its Managing Member
By: /s/ Xxxx X. Xxxx
------------------------------
Name: Xxxx X. Xxxx
Title: Vice President
SHP OAK TREE VILLA, LLC, a Delaware limited liability
company
By: Senior Housing Partners I, L.P., a Delaware limited
partnership, as the sole Managing Member thereof
By: Senior Housing Partners I, LLC., a Delaware
limited liability company, its general partner
By: The Prudential Insurance Company of America, a
New Jersey corporation, its Managing Member
By: /s/ Xxxx X. Xxxx
------------------------------
Name: Xxxx X. Xxxx
Title: Vice President
[SIGNATURES CONTINUED ON FOLLOWING PAGES]
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SHP LEXINGTON, LLC, a Delaware limited liability company
By: Senior Housing Partners I, L.P., a Delaware limited
partnership, as the sole Managing Member thereof
By: Senior Housing Partners I, L.L.C., a Delaware
limited liability company, its general partner
By: The Prudential Insurance Company of America,
a New Jersey corporation, its Managing Member
By: /s/ Xxxx X. Xxxx
------------------------------
Name: Xxxx X. Xxxx
Title: Vice President
SHP INN AT THE PARK, LLC, a Delaware limited liability
company
By: Senior Housing Partners I, L.P., a Delaware limited
partnership, as the sole Managing Member thereof
By: Senior Housing Partners I, L.L.C., a Delaware
limited liability company, its general partner
By: The Prudential Insurance Company of America,
a New Jersey corporation, its Managing Member
By: /s/ Xxxx X. Xxxx
------------------------------
Name: Xxxx X. Xxxx
Title: Vice President
[SIGNATURES CONTINUED ON FOLLOWING PAGES]
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SHP XXXXXX CREEK, LLC, a Delaware limited liability
company
By: SHP Xxxxxx Creek Manager, LLC, a Delaware limited
liability company, its managing member
By: Senior Housing Partners I, L.P., a Delaware
limited partnership, as the sole Managing Member
thereof
By: Senior Housing Partners I, LLC, a Delaware
limited liability company, its general partner
By: The Prudential Insurance Company of
America, a New Jersey corporation, its
Managing Member
By: /s/ Xxxx X. Xxxx
------------------------------
Name: Xxxx X. Xxxx
Title: Vice President
SHP MIRAGE INN, LLC, a Delaware limited liability company
By: Senior Housing Partners I, L.P., a Delaware limited
partnership, as the sole Managing Member thereof
By: Senior Housing Partners I, L.L.C., a Delaware
limited liability company, its general partner
By: The Prudential Insurance Company of America, a
New Jersey corporation, its Managing Member
By: /s/ Xxxx X. Xxxx
------------------------------
Name: Xxxx X. Xxxx
Title: Vice President
[SIGNATURES CONTINUED ON FOLLOWING PAGES]
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SHP OCEAN HOUSE, LLC, a Delaware limited liability company
By: Senior Housing Partners I, L.P., a Delaware limited
partnership, as the sole Managing Member thereof
By: Senior Housing Partners I, L.L.C., a Delaware
limited liability company, its general partner
By: The Prudential Insurance Company of America, a
New Jersey corporation, its Managing Member
By: /s/ Xxxx X. Xxxx
------------------------------
Name: Xxxx X. Xxxx
Title: Vice President
[SIGNATURES CONTINUED ON FOLLOWING PAGES]
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BUYER:
FIT REN LLC, a Delaware limited liability company
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: COO & Secretary
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The undersigned has executed this Amendment solely to confirm its agreement to
(i) hold the Escrow Deposits in escrow in accordance with the provisions hereof
and the Agreement and (ii) comply with the provisions of Article 13 and Section
15.2 of the Agreement.
ESCROW AGENT:
FIDELITY NATIONAL TITLE INSURANCE COMPANY
By: /s/ Xxxxxxx Xxxx
--------------------------------------------
Name: Xxxxxxx Xxxx
---------------------------------------
Title: VP
--------------------------------------
Date: June 20, 2005
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