PURCHASE AND SALE AGREEMENT
This
Purchase and Sale Agreement (this
“Agreement”) is dated, for reference purposes only, as of the
8th day of June, 2007, and is by and between WEGMAN/MANOR NUMBER ONE, LLC,
a New
York limited liability company, WEGMAN/MANOR NUMBER TWO, LLC, a New York limited
liability company, WEGMAN/MANOR NUMBER THREE, LLC, a New York limited liability
company and WEGMAN/FAMILY NUMBER FOUR, LLC, a New York limited liability company
(each a “Seller” and collectively, the
“Sellers”), and EMERITUS CORPORATION, a Washington
corporation
or its assignee (“Purchaser”).
1. PURCHASE
AND SALE
On
the terms and conditions set forth
herein, the Sellers agree to sell to the Purchaser and the Purchaser agrees
to
purchase from the Sellers, the following:
(a) The
real property situated in the State of New York, which are more particularly
described in Exhibit A attached hereto (the “Real
Property”), together with all of the improvements on the Real Property
which, as of the date of this Agreement, are and shall constitute at the time
of
“Closing” (as that term is defined below) constitute licensed
adult homes (collectively, the “Facilities”).
(b) Such
equipment, furniture, fixtures, inventory, vehicles, supplies (including linens,
dietary supplies and housekeeping supplies but specifically excluding food
and
other consumable inventories) and other tangible and intangible personal
property which is currently owned or shall be acquired by Sellers prior to
the
Closing and located on the Real Property and used in connection with the
operation of the Facilities, including but not limited to, all licenses, permits
and approvals for the operation of the Facilities (to the extent assignable),
all guaranties and warranties provided to Sellers in connection with the
construction and equipping of the Facilities, all entitlements, telephone
numbers, any right, title or interest which Sellers may have in and to any
service marks, trademarks or trade names owned, used or employed by Sellers
in
conjunction with the operation of the Facilities, specifically including any
rights of the Sellers in the names under which each of the Facilities does
business, and any trade marks related thereto and goodwill associated therewith,
but specifically excluding cash, cash equivalents and accounts receivable for
the period prior to the “Closing Date” (as defined below) (collectively, the
“Personal Property”). The Real Property, Facilities
and Personal Property are sometimes hereinafter collectively referred to as
“Sellers’ Assets.”
(c) The
parties acknowledge that as of the date of this Agreement and as of the date
of
the Closing (as defined below), each of the Facilities is subject to a lease
with Painted Post Partners, a Washington General Partnership (the
“Tenant”) initially dated as September 1, 1996 and as amended
from time to time (as in effect and amended, the
“Lease”). The Purchaser acknowledges that
substantially all of the assets described above as “Personal Property” are owned
or leased by the Tenant. The Purchaser currently operates each
of the Facilities on behalf of the Tenant and is familiar with each of the
Facilities, their respective operation and condition.
2. PURCHASE
PRICE
The
aggregate purchase price payable by
Purchaser to Sellers for Sellers’ Assets shall be an amount equal to
Eighty-eight Million Dollars ($88,000,000.00) (the “Purchase
Price”). The Purchase Price shall be payable as
follows:
(a) Upon
the expiration of the “Feasibility Period” (as that term is
defined below) and provided that Purchaser has not elected to terminate this
Agreement pursuant to its right to do so hereunder, One Hundred Thousand Dollars
($100,000.00) (the “Xxxxxxx Money”) shall be delivered by
Purchaser to Ticor Title Guarantee Title Insurance Company, located at
Rochester, New York (the “Escrow Agent”), which amount shall be
deposited into an interest bearing account, with any interest earned thereon
accruing to the benefit of Purchaser.
(b) Each
Seller is currently obligated under certain mortgage loans (collectively the
“Existing Loans”) made by GMAC Commercial Mortgage Corporation
and M&T Real Estate Inc. (the “Existing Lender”), the
repayment of which is secured by a Mortgage and Security Agreement encumbering
the Real Property (the “Existing Mortgages”). In the
event Purchaser assumes the Existing Mortgages, Purchaser shall receive at
the
time of Closing a credit against the Purchase Price in an amount equal to the
then current outstanding principal balance of the Existing Loans. In
the event one or more of the Existing Mortgages are assigned to Purchaser’s
lender, the Sellers shall receive a credit against the Purchase Price in an
amount equal to one-half of the mortgage tax savings by reason of such
assignment.
(c) The
balance of the Purchase Price, which amount shall be equal to the Purchase
Price
less the sum of (i) the amount of the Xxxxxxx Money and (ii) if Purchaser
assumes one or more of the Existing Loans, the outstanding principal balance
as
of the Closing Date of such Existing Loans, shall be due and payable either,
by
certified check or by wire transfer at Closing (the “Remaining
Balance”).
(d) The
Purchase Price shall be allocated among Sellers’ Assets in a manner mutually
acceptable to Sellers and Purchaser. Except as specifically provided
in this Agreement, Purchaser does not hereby, or in connection herewith, assume
any liability of Sellers whatsoever in relation to Sellers’ Assets which relates
to the period prior to Closing.
3. CLOSING
The
closing of the purchase and sale of
the Sellers’ Assets under this Agreement (the “Closing”) shall
take place on or before the date five (5) days following the satisfaction or
waiver of the conditions to closing set forth in Paragraphs 13 and 14 (the
“Closing Date”). Closing shall occur at the offices
of Xxxxxxxx Xxxxx LLP, 1400 First Federal Plaza, Rochester, New York or at
such
other place as Purchaser and Sellers may mutually agree. In the event
the scheduled Closing Date falls on a Saturday, Sunday or a legal holiday,
the
Closing Date shall be the next business day thereafter.
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4. CONVEYANCE
Conveyance
of the Sellers’ Assets to
Purchaser shall be effected by a warranty deed with full covenants (the
“Warranty Deed”) and xxxx of sale. Fee simple insurable title
to the Real Property and marketable title to the Personal Property shall be
conveyed from Sellers to Purchaser free and clear of all liens, charges,
easements and encumbrances of any kind, other than the following:
(a) Liens
for real estate taxes not yet due and payable;
(b) The
lien of the Existing Mortgages and other security interest provided by Sellers
as security for the Existing Loans (provided that Purchaser has assumed the
Existing Loans), as provided for herein;
(c) The
rights of the Tenant under the Lease and the rights of the residents under
the
Residential Agreements;
(d) Covenants,
easements and restrictions of record, providing the improvements do not encroach
upon any easement;
(d) Condemnation
of a portion of premises commonly known as Perinton Park Manor to provide access
between Chardonnay Drive and Xxxxxxxx Drive, in the Town of Perinton, Monroe
County, New York; and
(e) Such
items of record as described in the Title Commitment (as defined below) which
are not objected to by Purchaser in accordance with the terms of Paragraph
13(h).
5. COSTS,
PRORATIONS AND ADJUSTMENTS
The
costs of the transaction and the
expenses related to the ownership and operation of the Sellers’ Assets shall be
allocated among Sellers and Purchaser as follows:
(a) Sellers
shall pay all recording fees due on the sale of the Real Property and the
Facilities.
(b) Sellers
shall pay any transfer taxes due on the sale of the Real
Property. Purchaser shall pay any sales tax due on the sale of
the Personal Property.
(c) Purchaser
shall pay the cost of the premium for a standard owner’s policy of title
insurance in the full amount of the Purchase Price and the cost of any
additional premium in order to obtain extended coverage for said policy or
a
simultaneous loan policy.
(d) Purchaser
shall pay for the cost of any redate of the Survey.
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(e) Purchaser
shall pay for the cost of the Phase I Report (as defined below) which Purchaser
may elect to obtain in connection with its Feasibility Review of the
Property.
(f) All
rents and expenses related to the ownership or operation of the Sellers’ Assets
shall be prorated as of the Closing Date, with Sellers responsible for amounts
attributable to the period prior to the Closing Date and with Purchaser
responsible for amounts attributable to the period from and after the Closing
Date.
(g) Real
and Personal Property taxes and assessments shall be prorated as of the Closing
Date, with Sellers responsible for taxes and assessments attributable to the
period prior to the Closing Date and with Purchaser responsible for taxes and
assessments attributable to the period from and after the Closing
Date.
(h) Utilities
serving the Real Property and the Facilities shall not be adjusted.
(i) Purchaser
and Sellers shall each pay their own attorney’s fees.
(j) Purchaser
and Sellers shall share any escrow fees on a 50-50 basis.
(k) Sellers
shall pay the cost of obtaining and recording any releases necessary to deliver
title to the Sellers’ Assets in accordance with the terms of this
Agreement.
(l) Purchaser
shall be responsible for all fees related to the licensure of the Facilities
in
Purchaser’s or Tenant’s name.
(m) Purchaser
shall pay for the recording fees incurred for recording of the deed and Mortgage
and for the payment of any required New York State Mortgage Tax with respect
to
any mortgage.
6. POSSESSION
At
Closing, Purchaser shall be entitled
to possession of the Sellers’ Assets, subject only to the rights of the Tenant
under the Lease and residents of the Facilities under the Resident Agreements
(as defined below).
7. SELLERS’
REPRESENTATIONS AND WARRANTIES
Sellers
hereby warrant and represents
to Purchaser that:
(a) Sellers’
Authority. Each Seller has full power and authority to execute
and deliver this Agreement and all related documents and to carry out the
transactions contemplated herein. This Agreement is valid, binding and
enforceable against Sellers in accordance with its terms,
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except
as
such enforceability may be limited by creditors rights laws and applicable
principles of equity (regardless of whether such enforceability is considered
in
a proceeding in equity or at law). The execution of this Agreement
and the consummation of the transaction contemplated herein do not result in
a
breach of the terms and conditions of nor constitute a default under or
violation of, any law, regulation, court order, mortgage, note, bond, indenture,
agreement, license or other instrument or obligation to which Sellers are now
a
party or by which Sellers or any of the assets of Sellers may be bound or
affected.
(b) Title. As
of the Closing, Sellers shall have good and insurable fee simple title to the
Real Property and the Facilities, subject only to the easements, reservations
and encumbrances, if any, permitted under Paragraph 4, and good and marketable
title to the Personal Property free and clear of all liens and
encumbrances.
(c) The
Real Property. The Facilities are located on certain parcels of
land more particularly described in Exhibit A attached
hereto. The improvements on the Real Property are not to Sellers’
knowledge, located in an area designated by the Director of the Federal
Emergency Management Agency as a special flood hazard area. Sellers
make no representation with respect to the roofs of the Facilities, structural
components of the Facilities, and major mechanical systems at the Facilities,
including, but not limited to, the air conditioning, electrical and heating
and
ventilating systems.
(d) Necessary
Action. Sellers will proceed with all due diligence to take all
action and obtain all consents prior to Closing necessary for it to lawfully
enter into and carry out the terms of this Agreement.
(e) Taxes
and Tax Returns. All tax returns, reports and filings of any kind
or nature required to be filed by Sellers prior to Closing with respect to
its
ownership and operation of the Facilities and its ownership of the Real Property
and the Personal Property have been properly completed and timely filed in
material compliance with all applicable requirements and all taxes or other
obligations which are due and payable by Sellers have been timely
paid.
(f) Litigation. There
is no litigation, investigation, or other proceeding pending or, to the best
of
each Seller’s knowledge, threatened against or relating to any of Sellers, its
properties or business, which is material to any of Sellers’ Assets or to this
Agreement, or which would prevent any Sellers from performing its obligations
hereunder, and the transaction contemplated herein has not been challenged
by
any governmental agency or any other person, nor do Sellers know, or have
reasonable grounds to know, of any basis for any such litigation, investigation
or other proceeding.
(g) Books
and Records. All of the books and records maintained by Sellers
with respect to its ownership and/or operation of the Sellers’ Assets are true,
accurate and correct in all material respects.
(h) Facilities
Resident Agreements. Purchaser has in its possession copies of
each of the resident agreements which have been entered into with the residents
of the Facilities and as are in effect (collectively the “Resident
Agreements”).
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(i) Rent
Roll. Purchaser has in its possession a true and correct rent
roll which identifies each of the residents of the Facilities, the monthly
rent
required to be paid by each such tenant and the date to which any such rent
has
been paid.
(j) Liens. There
are no mechanics’, materialmen’s or similar claims or liens presently claimed
or, to the best of Sellers’ knowledge, which will be claimed against the
Sellers’ Assets for work performed in connection with the construction,
maintenance or improvement of the Facilities or which has otherwise been
arranged for at the request of a Seller or of which any Seller has
knowledge.
(k) Environmental
Matters. Except in accordance with and in full compliance with,
any and all applicable governmental laws, regulations and requirements
(collectively, the “Environmental Laws”) relating to
environmental and occupational health and safety matters and hazardous
materials, substances or wastes (as defined from time to time under any
applicable federal, state or local laws, regulations or ordinances), Sellers
have not released into the environment or discharged, placed or disposed of
any
such hazardous materials, substances or wastes or caused the same to be so
released into the environment or discharged, placed or disposed of at, on or
under the Sellers’ Assets. To each Seller’s actual knowledge, no hazardous
materials, substances or wastes are located on the Real Property or the
Facilities or have been released into the environment or discharged, placed
or
disposed of in, on or under the Real Property or the Facilities. To
each Seller’s actual knowledge, no underground storage tanks are or have been
located on the Real Property. To each Seller’s actual knowledge, the
Real Property has never been used as a dump for waste material. To
each Seller’s actual knowledge, the Real Property and the Facilities and their
prior uses comply with and at all times have complied with, all Environmental
Laws.
(l) Employees. Sellers
have not hired and prior to Closing will not hire any employees in connection
with the intended operations at the Facilities.
(m) Compliance
with Law
(i) The
Sellers’ Assets are (and shall be as of the Closing Date) in compliance with all
currently applicable municipal, county, state and federal laws, regulations,
ordinances, standards and orders and with all municipal, health, building and
zoning by-laws and regulations (including, without limitation, the building
and
zoning codes) where the failure to comply therewith or to obtain a waiver
therefrom could have a material adverse effect on the business, property,
condition (financial or otherwise) or operation of the Sellers’ Assets;
provided, however, the foregoing representation by Seller shall not apply to
any
matters for which Emeritus is responsible for as the operator of the Facility
or
Painted Post Partners is responsible for as lessee of the Real
Property;
(ii) As
of the Closing Date, there shall be no outstanding deficiencies or work orders
of any authority having jurisdiction over the Sellers’ Assets requiring
conformity to any applicable statute, regulation, ordinance or by-law pertaining
thereto; and
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(iii) Sellers
are not aware
of any claim, requirement or demand of any agency supervising or having
authority over the Facilities to rework or redesign it or to provide additional
furniture, fixtures or equipment so as to conform to or comply with any existing
law, code or standard which has not been fully satisfied prior to the date
hereof or which will not be satisfied prior to the Closing Date.
(n) Operating
Contracts. Within fifteen (15) days following the mutual
execution of this Agreement, each Seller shall provide to Purchaser true and
correct copies of all operating contracts to which Sellers are a party in
connection with the operations to be conducted at the Facilities (the
“Operating Contracts”). Sellers shall not enter into
any additional Operating Contracts without the prior written approval of
Purchaser. As of the Closing Date, each of the Operating Contracts
shall be in full force and effect and none of the Operating Contracts shall
have
been modified or amended except as set forth in any amendment provided to
Purchaser. As of the Closing Date, Sellers shall certify in writing
to Purchaser that Sellers are not in default of any of its obligations under
the
Operating Contracts and that Sellers are not aware of any default or any action
which, with the passage of time or the giving of notice or both would constitute
a default, under the Operating Contracts by any other party
thereto. At Closing, Sellers shall deliver to Purchaser duly executed
assignments of any of the Operating Contracts and where required the consent
of
the contractive party, which Purchaser elects to assume pursuant to Paragraph
11(a) (iv) below.
(o) The
Facilities. There is no action pending or, to the best knowledge
of each Seller, recommended by any state or federal agency having jurisdiction
thereof, or any action of any other type (either as of the date hereof or as
of
the Closing Date) which would have a material adverse effect on the Facilities,
its operations or business.
(p) Disclosure. No
representation or warranty by any Seller contained in this Agreement and no
statement contained in any certificate, list, exhibit, or other instrument
furnished or to be furnished to Purchaser pursuant hereto, or in connection
with
the transaction contemplated hereby, contains or will contain any untrue
statement of a material fact, or omits or will omit to state any material facts
which are necessary in order to make the statements contained herein or therein
not misleading.
8. PURCHASER’S
REPRESENTATIONS AND WARRANTIES
Purchaser
hereby warrants and
represents to Sellers that:
(a) Status
of Purchaser. Purchaser is a corporation duly organized and
validly existing under the laws of the State of Washington and is, or prior
to
Closing will be, duly qualified to do business in the State of New
York.
(b) Authority. Purchaser
has full power and authority to execute and to deliver this Agreement and all
related documents, and to carry out the transactions contemplated herein. This
Agreement is valid, binding and enforceable as against Purchaser in accordance
with its terms, except as such enforceability may be limited by creditors’
rights laws and applicable principles of
7
equity. The
execution of this Agreement and the consummation of the transaction contemplated
herein do not result in a breach of the terms and conditions of nor constitute
a
default under or violation of Purchaser’s Articles of Incorporation or By-laws
or any law, regulation, court order, mortgage, note, bond, indenture, agreement,
license or other instrument or obligation to which Purchaser is a party or
by
which Purchaser or any of the assets of Purchaser may be bound or
affected.
(c) Litigation. There
is no litigation, investigation or other proceeding pending or threatened
against or relating to Purchaser, its properties or business which is material
to this Agreement, or which would prevent Purchaser from performing its
obligations hereunder, nor does Purchaser know or have reasonable grounds to
know of any basis for any such action.
(d) Necessary
Action. Purchaser will proceed with all due diligence to take all
action and obtain all consents prior to Closing necessary for it to lawfully
enter into and carry out the terms of this Agreement, including, but not limited
to, obtaining the consent of its Board of Directors.
(e) Disclosure. No
representation or warranty by Purchaser contained in this Agreement and no
statement contained in any certificate, list, exhibit, or other instrument
furnished or to be furnished to Sellers pursuant hereto, or in connection with
the transaction contemplated hereby, contains or will contain any untrue
statement of a material fact, or omits or will omit to state any material facts
which are necessary in order to make the statements contained herein or therein
not misleading.
(f) Knowledge. As
operator of each of the Facilities, Purchaser has no actual knowledge that
the
representations and warranties of the Sellers contained in paragraph 7 hereof
contain any untrue statement of a material fact or omit to state any material
facts which are necessary in order to make the statements contained therein
not
misleading.
9. BROKER
Sellers
and Purchaser represent and
warrant to each other that they have employed no broker and/or finder in
connection with this transaction. In the event any claim, damage or cause of
action for brokerage and/or finder’s fees is asserted against a party to this
Agreement who did not request such services, the party through whom the broker
and/or finder is making the claim shall indemnify, defend (with an attorney
of
indemnitee’s choice) and hold harmless the other party from and against any and
all such claims, demands and causes of action.
10. SELLERS’
COVENANTS
(a) Pre-Closing. Between
the date hereof and the Closing Date, except as contemplated by this Agreement
or with the prior written consent of Purchaser:
(i) Sellers
will not enter into any operating contracts or service agreements in connection
with the operation of the Facilities;
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(ii) Sellers
will not enter into any Resident Agreements for the Facilities;
(iii) Sellers
will not enter into any employment agreements in connection with the operation
of the Facilities;
(iv) Other
than as set forth in Paragraph 4, Sellers will satisfy and discharge all claims,
liens, security interests, tenancies (other than any Operating Contracts which
Purchaser elects to assume at Closing pursuant to the terms hereof, the Lease
and the Resident Agreements), and encumbrances on Sellers’ Assets;
(v) Each
Seller will file all tax returns, reports and filings of any kind or nature
required to be filed by each Seller and will timely pay all taxes or other
obligations which are due and payable with respect to Sellers’
Assets;
(vi) Sellers
will not take any action inconsistent with its obligations under this Agreement
or which could hinder or delay the consummation of the transactions contemplated
by this Agreement;
(vii) Sellers
will not sell or agree to sell any of the items which comprise the Personal
Property nor otherwise enter into any agreement materially affecting any of
the
Sellers’ Assets;
(viii) Sellers
will maintain in force the existing hazard and liability insurance policies,
or
comparable coverage, for the Sellers’ Assets as now may be in
effect;
(ix) Sellers
will not enter into any contract or commitment affecting the Sellers’ Assets
except in the ordinary course of business and any such contract or commitment
shall be terminable prior to closing and Sellers will advise Purchaser by
written notice of any contracts or commitments which it enters, whether in
the
ordinary course of business or otherwise and Seller shall terminate such
contracts or commitments prior to closing if Purchaser so requests;
(x) Sellers
will timely pay all obligations which are due and payable with respect to the
Sellers’ Assets;
(xi) Sellers
will take all necessary action to achieve compliance with any laws, regulations,
ordinances, standards and orders applicable to the Sellers’ Assets which are
enacted after execution of this Agreement and prior to Closing;
(xii) Within
twenty
(20) days following the mutual execution of this Agreement, Sellers will (a)
deliver to Purchaser a UCC-1 search report covering the name of Sellers and
the
name of the Facilities, a copy of the existing surveys with respect to the
Real
Property prepared (the “Survey”), and (c) if requested, arrange
with the Escrow Agent for the issuance and delivery to Purchaser and to
Purchaser’s attorney of a title report or commitment covering the
Real
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property,
together with copies of all exception documents referenced therein (the
“Title Commitment”);
(xiii) At
least five (5) days prior to the Closing Date, Sellers shall deliver to
Purchaser an updated UCC-1 search report;
(xiv) Sellers
will provide Purchaser within twenty (20) days following the mutual execution
of
this Agreement with copies of the following documents relating to the Real
Property and the Facilities to the extent the same are in Sellers’ possession or
reasonable control (collectively, the “Property Documents”):
all environmental reports, structural reports and geological reports,
governmental licenses, permits and approvals, service and maintenance contracts
not previously delivered, existing surveys of the Real Property, wetland
reports, soils reports, architectural drawings, engineering tests and reports,
all appraisals prepared for the Real Property and the Facilities, and all loan
documents evidencing the Existing Loans; and
(xv) If
Purchaser assumes the Existing Loans, Sellers shall cooperate in good faith
with
Purchaser in obtaining the consent of the Existing Lender to Purchaser’s
assumption of said loans.
(b) Closing. On
the Closing Date, each Seller agrees to:
(i) Execute
and deliver to Purchaser a good and sufficient Warranty Deed to the Real
Property (including the Facilities) owned by it and xxxx of sale with respect
to
the Personal Property owned by it and such endorsements, assignments and other
instruments of transfer and conveyance as shall be necessary to transfer and
assign Sellers’ Assets to Purchaser as herein provided;
(ii) Deliver
the Sellers’ Assets to Purchaser in a good condition;
(iii) Deliver
to Purchaser a duly executed assignment of the Lease;
(iv) Pay
its share of the Closing costs described in Paragraph 5;
(v) Deliver
to Purchaser an Assignment and Assumption Agreement in with respect to any
of
the Operating Contracts which Purchaser has assumed pursuant to Paragraph 11
(a)
(iv) (the “Operating Contract Assumption
Agreement”);
(vi) Deliver
to Purchaser copies of all guaranties and warranties pertaining to the
construction of the Facilities and the equipping of the Facilities with the
Personal Property and execute in favor of Purchaser such written assignments
as
Purchaser shall deem reasonably necessary to cause the assignment of the
beneficial interest under each such warranty and guaranty;
(vii) Deliver
to
Purchaser any amendments or updates to the Property Documents which were
previously provided to Purchaser pursuant to Paragraph 10(a) above
and
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any
additional Property Documents which have been prepared or generated following
the date of the initial delivery of Property Documents as provided above;
and
(viii) If
Purchaser has assumed the Existing Loans, execute and deliver to Escrow Agent
such documents and instruments as may be reasonably required by the Existing
Lender, in order to provide for Purchaser’s assumption of the Existing
Loans.
(c) Post-Closing. After
the Closing of this Agreement, Sellers agree that, at Purchaser’s sole cost and
expense, it will take such actions and properly execute and deliver to Purchaser
such further instruments of assignment, conveyance and transfer as, in the
reasonable opinion of counsel for Purchaser and Sellers, may be reasonably
necessary to assure, complete and evidence the full and effective transfer
and
conveyance of Sellers’ Assets.
11. PURCHASER’S
COVENANTS
(a) Pre-Closing. Between
the date hereof and the Closing Date, except as contemplated by this Agreement
or with the consent of Sellers, Purchaser agrees that:
(i) Purchaser
will not take any action inconsistent with its obligations under this Agreement
or which could hinder or delay the consummation of the transaction contemplated
by this Agreement;
(ii) Purchaser
will proceed with all due diligence and use its best efforts to obtain all
consents and approvals necessary to permit the consummation of the transaction
contemplated by this Agreement and/or necessary to permit Purchaser to own
and
Purchaser or Tenant to operate the Facilities;
(iii) Purchaser
will proceed with all due diligence to conduct such investigations with respect
to Sellers’ Assets as it deems to be reasonably necessary in connection with its
purchase thereof, including, but not limited to, zoning investigations, soil
studies, environmental assessments, seismic assessments, wetlands reports,
review of all Property Documents provided by Sellers, investigations of Sellers’
and the Facilities’ operating books and records and structural inspections,
provided, however, no studies or investigations conducted at the Real Property
will be physically intrusive on the Real Property or the Facilities unless
Sellers consent thereto, which consent shall not be unreasonably withheld (the
“Feasibility Review”); provided, however, nothing herein shall
be construed as amending or modifying in any manner the representations or
warranties of Sellers set forth in this Agreement, which representations and
warranties shall be separate from and unaffected by Purchaser’s Feasibility
Review; and provided, further, that Purchaser shall maintain the confidentiality
of any documents or information obtained by it during the course of its
Feasibility Review and shall return the same to Sellers in the event the
transaction provided for herein fails to close for any reason
whatsoever;
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(iv) On
or before the expiration of the Feasibility Period (as that term is defined
below), Purchaser will advise Sellers in writing which, if any, of the Operating
Contracts it elects to assume as of the Closing Date; and
(v) If
Purchaser elects to assume the Existing Mortgages, Purchaser shall proceed
with
all due diligence and use its best efforts to obtain all consents and approvals
necessary from the Existing Lender to permit the assumption of the Existing
Mortgage and the release of the Sellers from liability thereunder.
(b) Closing. On
the Closing Date, Purchaser agrees that it will:
(i) Pay
its share of the Closing costs described in paragraph 10(a)(xxi);
(ii) Deliver
to Sellers the Assignment and Assumption Agreement with respect to the Operating
Contracts which Purchaser has assumed;
(iii) If
Purchaser has assumed the Existing Loans, execute and deliver to the Escrow
Agent such documents and instruments as may be reasonably required by the
Existing Lender in order to provide Purchaser’s assumption of the Existing
Loans; and
(iv) Pay
the balance of the Purchase Price as required pursuant to Paragraph
2.
12. MUTUAL
Following
the execution of this
Agreement, Purchaser and Sellers agree:
(a) If
any event should occur, either within or without the knowledge or control of
Purchaser or Sellers, which would prevent fulfillment of the conditions to
the
obligations of any party hereto to consummate the transaction contemplated
by
this Agreement, to use its or their reasonable efforts to cure the same as
expeditiously as possible; and
(b) To
cooperate fully with each other in preparing, filing, prosecuting, and taking
any other actions which are or may be reasonable and necessary to obtain the
consent of any governmental instrumentality or any third party or to accomplish
the transaction contemplated by this Agreement.
13. PURCHASER’S
CONDITIONS
All
obligations of Purchaser under this
Agreement are subject to fulfillment of each of the following conditions, any
one or all or which may be waived in writing by Purchaser:
12
(a) Sellers’
Representations and Warranties True at Closing. Sellers’ representations and
warranties contained in this Agreement or in any certificate or document
delivered in connection with this Agreement or the transactions contemplated
herein shall be true in all material respects at and as of the date of Closing
as though such representations and warranties were then again made.
(b) Sellers’
Performance. Sellers shall have performed all of its obligations
under this Agreement that are to be performed prior to or at Closing to the
extent the same have not been waived by Purchaser in accordance with the terms
hereof.
(c) No
Defaults. Sellers shall not be in default, where said default
cannot be cured by Closing, under any mortgage, contract, lease or other
agreement to which any Seller is a party or by which any Seller is bound and
which affects or relates to the Real Property, the Personal Property or the
Facilities.
(d) Feasibility
Review. Purchaser shall be satisfied with the results of its
Feasibility Review, including but not limited to (i) Purchaser’s approval of the
physical condition of the Real Property and the Facilities, including the
results of any environmental assessment report which Purchaser elects to obtain
at Purchaser’s expense, and (ii) Purchaser’s review and approval of all Property
Documents. Purchaser shall advise Sellers in writing on or before the
date forty-five (45) days following the mutual execution of this Agreement
(the
“Feasibility Period”) of (i) any objections pursuant to its
Feasibility Review and (ii) whether it intends to assume the Existing Loan.
Nothing herein shall be construed as amending or modifying in any manner the
representations or warranties of Sellers set forth in this Agreement, which
representations and warranties shall be separate from and unaffected by
Purchaser’s Feasibility Review except as to any representations or warranties
which, during the course of Purchaser’s Feasibility Review, Purchaser obtains
knowledge of falsity or inaccuracy. In the event Purchaser elects to
terminate this Agreement by reason Purchaser’s disapproval of is Feasibility
Review, Purchaser shall notify Sellers in writing on or before the expiration
of
the Feasibility Period, and the parties shall have no further rights or
obligations hereunder, other than Purchaser’s right to the return of its Xxxxxxx
Money and Sellers’ obligation to pay any title cancellation and UCC search fees
incurred as a result of such termination.
(e) Title
Review. Within twenty (20) days following receipt of the Title
Commitment (together with legible copies of all of the recorded documents
referenced therein as exceptions) and the Survey, Purchaser shall have reviewed
and approved or disapproved those matters reflected on the Title Commitment
and
the Survey. In the event Purchaser objects to any such matters,
Purchaser shall advise Sellers in writing of its objections within said fifteen
(15) day period; provided, however that such objections shall not include those
items specifically excluded in Paragraph 4. Within ten (10) days of
Sellers’ receipt of Purchaser’s objections, Sellers shall advise Purchaser in
writing as to whether it intends to correct the defects to which Purchaser
has
objected. If Sellers fails to notify Purchaser within said ten (10)
day period or timely notifies Purchaser of its refusal to correct some or all
of
such defects, Purchaser shall have ten (10) days following the earlier of (i)
the expiration of said Sellers’ ten (10) day response period or (ii) the date
Purchaser receives Sellers’ notice of refusal, to advise Sellers of its decision
to close, notwithstanding the defects, or to terminate this
Agreement. In the event of any such termination, neither party shall
have any further rights or obligations hereunder, other than Sellers’ obligation
to return or to direct
13
the
return of Purchaser’s Xxxxxxx Money. Any approval of the Title
Commitment shall be subject to Purchaser’s review of and approval of any
additional title matters which may be reflected in the update to the Title
Commitment which Sellers shall provide to Purchaser following the completion
of
the Facilities improvements. Any matter reflected in the Title Commitment or
the
Survey not objected to in accordance with the terms hereof shall be deemed
accepted by Purchaser;
(f) Title
Policy. The Title Insurer shall issue to Purchaser as of the date
of Closing, an ALTA Owner’s extended coverage policy of title insurance for the
Real Property and the Facilities issued on ALTA 2006 form (the “Title
Policy”) with a value of not less than the amount of the Purchase Price
(excluding that portion allocated to the purchase of the Personal Property)
insuring Purchaser’s interest in the Real Property and the Facilities, and
subject to no exceptions other than those of the usual printed exceptions (the
Survey, and mechanics lien exceptions being specifically unacceptable to
Purchaser) and those exceptions to which Purchaser has not objected as provided
for in Paragraph 13(g) above.
(g) UCC
Search. On or before the Closing Date, Purchaser shall be
satisfied with the results of the UCC search conducted by Sellers pursuant
to
Paragraph 10(a).
(h) Board
Approval. On or before the end of the Feasibility Period,
Purchaser shall have obtained any required approval of its Board of Directors
to
the acquisition of the Sellers’ Assets pursuant to the terms of this
Agreement.
In
the event any of the foregoing
conditions are not satisfied or are not otherwise waived by Purchaser prior
to
the applicable period for satisfaction or waiver, Purchaser shall have the
right
to terminate this Agreement in accordance with the provisions of Paragraph
17
and in such event Purchaser shall receive a full refund of its Xxxxxxx Money
together with any interest earned thereon.
14. SELLERS’
CONDITIONS
All
obligations of Sellers under this
Agreement are subject to the fulfillment, prior to or at Closing, of each of
the
following conditions, any one or all of which may be waived by Sellers in
writing:
(a) Purchaser’s
Representations and Warranties True at Closing. Purchaser’s
representations and warranties contained in this Agreement or in any certificate
or document delivered in connection with this Agreement or the transactions
contemplated herein shall be true in all material respects at and as of the
date
of Closing as though such representations and warranties were then again
made.
(b) Purchaser’s
Performance. Purchaser shall have performed its obligations under
this Agreement that are to be performed prior to or at Closing to the extent
the
same have not been waived by Sellers in accordance with the terms
hereof.
14
In
the event any of the foregoing
conditions are not satisfied or are not otherwise waived by Purchaser prior
to
the applicable period for satisfaction or waiver, Sellers shall have the right
to terminate this Agreement in accordance with the provisions of Paragraph
17
and in such event Purchaser shall receive full refund of its Xxxxxxx Money
together with any interest earned thereon.
15. SELLERS’
INDEMNIFICATION
Sellers
shall indemnify, defend and
hold Purchaser harmless from and against:
(a) Except
as otherwise provided in this Agreement, any and all obligations relating to
the
ownership of Sellers’ Assets and the operation of the Facilities which exist at
the Closing Date, including, but not limited to any obligations under the Lease,
or the Operating Contracts which Purchaser elects to assume at
Closing;
(b) Any
and all damage, loss or liability arising from and after the Closing Date under
any of the Operating Contracts which Purchaser does not assume at
Closing;
(c) Any
and all damage, loss, or liability resulting from any misrepresentation of
a
material fact, breach of warranty or nonfulfillment of any agreement on the
part
of Sellers under this Agreement or from any misrepresentation in any certificate
furnished or to be furnished to Purchaser hereunder;
(d) Any
and all liability or loss arising out of or relating to any failure in
connection with the transaction contemplated herein to comply with the
requirements of any laws or regulations relating to bulk sales or transfers;
and
(e) Any
and all actions, suits, proceedings, demands, assessments, judgments,
reasonable costs, and other reasonable expenses, including, but not limited
to,
reasonable attorney’s fees, incident to any of the foregoing.
(f) For
purposes of Paragraph 15(a), an obligation shall be deemed to “exist” as of the
Closing Date if it relates to events which occurred prior to the Closing Date
even if it is not asserted until after the Closing Date.
16. PURCHASER’S
INDEMNITY
Purchaser
shall indemnify, defend and
hold Sellers harmless from and against:
(a) Except
as otherwise provided in this Agreement, any and all obligations relating to
the
ownership of the Sellers’ Assets and the operation of the Facilities from and
after the Closing Date, including, but not limited to, any obligations under
any
of the Resident Agreements or
15
Operating
Contracts which Purchaser elects to assume at Closing and any obligations with
respect to the Resident Deposits;
(b) Any
and all damage, loss or liability resulting from any misrepresentation of a
material fact, breach of warranty or non-fulfillment of any agreement on the
part of Purchaser under this Agreement or from any misrepresentation in any
certificate furnished or to be furnished to Sellers hereunder;
(c) Any
and all damage, loss or liability resulting from the conduct by or the
negligence or willful misconduct of Purchaser in performing its Feasibility
Review; and
(d) Any
and all actions, suits, proceedings, demands, assessments, judgments, reasonable
costs and other reasonable expenses, including, but not limited to, reasonable
attorney’s fees, incident to any of the foregoing.
17. TERMINATION
(a) This
Agreement may be terminated and the transaction contemplated herein abandoned
at
any time prior to Closing:
(i) By
mutual agreement of the parties;
(ii) By
Sellers, if
any of the conditions set forth in Paragraph 14 shall have become incapable
of
fulfillment prior to the Closing Date or such earlier date as may be
specifically provided for the performance thereof (as the same may be extended)
through no fault of Sellers and the same shall not have been waived by
Sellers;
(iii) By
Purchaser,
if any of the conditions set forth in Paragraph 13 shall have become incapable
of fulfillment prior to the Closing Date or such earlier date as may be
specifically provided for the performance thereof (as the same may be extended)
through no fault of Purchaser and the same shall not have been waived by
Purchaser;
(iv) By
either Sellers or Purchaser in the event of a material breach by the other
party
of its obligations hereunder; or
(v) If
the Closing has not occurred by July 31, 2007 (the “Outside Closing
Date”), unless extended by mutual written agreement of the
parties.
(b) In
the event that prior to the Closing Date, a material portion of the Real
Property, the Facilities or the Personal Property shall have been damaged or
destroyed by fire or other casualty, or shall have been taken or condemned
by
any public or quasi-public authority under the power of eminent domain,
Purchaser shall have the right to terminate this Agreement on written notice
to
Sellers. In the event Purchaser elects not to terminate its rights
hereunder, then Sellers shall assign to Purchaser all of its rights to any
insurance proceeds or condemnation award and all
16
claims
in
the connection therewith. In the event Purchaser exercises its termination
rights hereunder, the parties shall have no further rights or obligations
hereunder other than Purchaser’s right to the return of its Xxxxxxx
Money.
(c) Neither
party to this Agreement may claim termination or pursue any other remedy
referred to in Paragraph 17(a) on account of a breach of a condition, covenant
or warranty by the other, without first giving such other party written notice
of such breach and not less than ten (10) days within which to cure such
breach. The Closing Date shall be postponed, if necessary, to afford
such opportunity to cure; provided, however, in no event shall the Closing
Date
be postponed beyond the Outside Closing Date.
(d) In
the event the Closing has failed to occur as a result of a material breach
by
Purchaser of its obligations hereunder resulting in Sellers electing to
terminate this Agreement under Paragraph 17(a) (iv) or (v), Sellers’ sole remedy
shall be to retain Purchaser’s Xxxxxxx Money as full and complete liquidated
damages, the parties acknowledging and agreeing that the amount of damages
which
Sellers may incur as a result of such termination may be difficult to ascertain
and that the amount of the Xxxxxxx Money is a reasonable and fair estimate
thereof, after which the parties shall have no further rights or obligations
hereunder.
(e) In
the event the Closing has failed to occur as a result of a material breach
by
Sellers of its obligations hereunder resulting in Purchaser electing to
terminate this Agreement under Paragraph 17(a) (iv) or (v), Purchaser shall
have
the right either to (i) terminate this Agreement and receive a full refund
of
its Xxxxxxx Money, together with all interest accrued thereon, after which
neither party shall have any further rights or obligations hereunder or (ii)
seek specific performance of Sellers’ obligations hereunder or damages for
Sellers’ breach of its obligations hereunder. In the event Purchaser elects to
terminate this Agreement as a result of a failure of any of the Purchaser’s
conditions hereunder, as provided for in Paragraph 17(a) (iii), Purchaser shall
be entitled to a full refund of its Xxxxxxx Money deposit together with any
interest accrued thereon.
18. [RESERVED].
19. [RESERVED].
20. [RESERVED].
21. NOTICES
Any
notice, request or other
communication to be given by any party hereunder shall be in writing and shall
be sent by registered or certified mail, postage prepaid, by overnight courier
guaranteeing overnight delivery or by facsimile transmission (if confirmed
verbally or in writing by mail as aforesaid), to the following
address:
17
To
Seller: c/o
Wegman Companies, Inc.
000
Xxxxxx Xxxx, Xxxxxxxx
X
Xxxxxxxxx,
Xxx Xxxx
00000-0000
Attention: Xxxxxx
X.
Xxxxxx
Telephone
No.: (000)
000-0000
Facsimile
No.: (000)
000-0000
with
a copy
to: Xxxxxxxx
Xxxxx LLP
0000
Xxxxx Xxxxxxx Xxxxx
Xxxxxxxxx,
Xxx
Xxxx 00000
Attention: Xxxxxx
X. Xxxxx,
Esq.
Telephone
No.: (000)
000-0000
Facsimile
No.: (000)
000-0000
To
Purchaser: Emeritus
Corporation
0000
Xxxxxxxx Xxxxxx, Xxxxx
000
Xxxxxxx,
Xxxxxxxxxx 00000
Attention: Xxxx
Xxxxxxxxxx,
Director of Real Estate
and
Legal Affairs
Telephone
No.: (000)
000-0000
Facsimile
No.: (000)
000-0000
With
a copy
to: Xxxxx
Xxxxxx Xxxxxxxx LLP
0000
Xxxxx Xxxxxx, Xxxxx
0000
Xxxxxxx,
Xxxxxxxxxx 00000
Attention: Xxx
Xxxxxxxxxx,
Esq.
Telephone
No.: (000
000-0000
Facsimile
No.: (000)
000-0000
Notice
shall be deemed given three (3)
business days after deposit in the mail, on the next day if sent by overnight
courier and on receipt if sent by facsimile (and confirmed verbally or by mail
as aforesaid).
22. SOLE
AGREEMENT
This
Agreement may not be amended or
modified in any respect whatsoever except by instrument in writing signed by
the
parties hereto. This Agreement constitutes the entire agreement between the
parties hereto and supersedes all prior and contemporaneous negotiations,
discussions, writings and agreements between them. Time is of the
essence.
18
23. SUCCESSORS
The
terms of this Agreement shall be
binding upon and inure to the benefit of and be enforceable by and against
the
heirs and successors of the parties hereto, it being specifically understood
and
agreed that Purchaser shall have the right to assign in whole or in part its
rights and obligations hereunder to any affiliated entity or any entity which
is
sponsored by Purchaser; provided no such assignment shall relieve Purchaser
of
its obligations hereunder.
24. CAPTIONS
The
captions of this Agreement are for
convenience of reference only and shall not define or limit any of the terms
or
provisions hereof.
25. SURVIVAL
All
covenants, warranties and
representations of Purchaser and Sellers herein shall survive for two years
after Closing other than Sellers’ representation and warranty in Paragraph 7.1.,
which shall survive for the applicable statute of limitations
period.
26. GOVERNING
LAW
This
Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
27. SEVERABILITY
Should
any one or more of the
provisions of this Agreement be determined to be invalid, unlawful or
unenforceable in any respect, the validity, legality and enforceability of
the
remaining provisions hereof shall not in any way be affected or impaired
thereby.
28. COUNTERPARTS
This
Agreement may be executed in any
number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same
instrument.
29. THIRD
PARTY BENEFICIARY
The
provisions of this Agreement are
not intended to confer any benefits upon any person or entity not a party to
this Agreement.
19
30. ATTORNEY’S
FEES
Should
either party institute any
action or proceeding to enforce or interpret this Agreement or any provision
hereof, for damages by reason of any alleged breach of this Agreement or of
any
provision hereof, or for a declaration of rights hereunder, the prevailing
party
in any such action or proceeding shall be entitled to receive from the other
party all costs and expenses, including reasonable attorneys’ and other fees,
incurred by the prevailing party in connection with such action or
proceeding. The term “attorneys’ and other fees”
shall mean and include attorneys’ fees, accountants’ fees, and any and all other
similar fees incurred in connection with the action or proceeding and the
preparations therefor. The term “action or
proceeding” shall mean and include actions, proceedings, suits,
arbitrations, appeals and other similar proceedings.
[Signatures
of the parties on following page]
20
IN
WITNESS WHEREOF, the parties hereby
execute this Agreement as of the day and year set forth opposite each party’s
signature below with the last date constituting the date of mutual execution
of
this Agreement.
Dated: June
8,
2007 PURCHASER:
EMERITUS
CORPORATION,
a
Washington corporation
By:
/s/ Xxxx
Xxxxxxxxxx
Its:
Director of Real Estate and Legal
Affairs
Dated: June
7,
2007 SELLER:
WEGMAN/MANOR
NUMBER ONE,
LLC
By:
/s/ Xxxxxx X.
Xxxxxx
Xxxxxx X. Xxxxxx, Manager
WEGMAN/MANOR
NUMBER TWO,
LLC
By:
/s/ Xxxxxx X.
Xxxxxx
Xxxxxx
X. Xxxxxx, Manager
WEGMAN/MANOR
NUMBER THREE,
LLC
By:
/s/ Xxxxxx X.
Xxxxxx
Xxxxxx
X. Xxxxxx, Manager
WEGMAN/MANOR
NUMBER FOUR,
LLC
By:
/s/ Xxxxxx X. Xxxxxx
Xxxxxx
X. Xxxxxx, Manager
EXHIBIT
A
Facilities
|
Colonie
Manor
000
Xxxxxxxxxx Xxxxxx Xxxx
Xxxxxx,
Xxx Xxxx 00000
|
Xxxxxxx
Park Manor
000
Xx. Xxxxxxx Xxxxx
Xxxxxxxxxxxxx,
Xxx Xxxx 00000
|
|
Xxxxxxx
Manor
000
Xxxxxxx Xxxx
Xxxxxxxxxxxxx,
Xxx Xxxx 00000
|
Woodland
Manor
000
Xxxxxxxxx Xxxx
Xxxxxx,
Xxx Xxxx 00000
|
|
Westside
Manor
0000
Xxxx Xxxxxx Xxxx
Xxxxxxxxx,
Xxx Xxxx 00000
|
Eastside
Manor
0000
Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxxxxx,
Xxx Xxxx 00000
|
|
Bellevue
Manor
0000
Xxxxxxxx Xxxxxxxxx
Xxxxxxxx,
Xxx Xxxx 00000
|
Westside
Manor
0000
Xxxx Xxxx Xxxx
Xxxxxxxxx,
Xxx Xxxx 00000
|
|
Perinton
Park Manor
000
Xxxxxxxxxx Xxxxx
Xxxxxxxx,
Xxx Xxxx 00000
|
