THE FOLLOWING DOCUMENT IS SUBSTANTIALLY THE SAME FOR
ALL SEVEN COMMUNITIES WITH THE EXCEPTION OF THE
FOLLOWING ITEMS:
Sale Price
La Villita
$ 6,600,000
Xxxxxxx Xxxx
7,300,000
Barrington Place
4,600,000
Lodge at Mainlands
9,500,000
Xxxxxxxxx Xxxxxx Xxxx
0,000,000
Xxx Xxxxx Xxxxxxx
9,600,000
Springtree
14,500,000
PURCHASE AND SALE AGREEMENT
(BARRINGTON PLACE)
by and between
EMERITUS PROPERTIES I, INC.
("Seller")
and
BAYSIDE HEALTH GROUP LLC
(Purchaser")
PURCHASE AND SALE AGREEMENT
(BARRINGTON PLACE)
This Purchase and Sale Agreement ("Agreement") is
made and entered into this 16th day of April, 1998 by
and between EMERITUS PROPERTIES I, INC., a Washington
corporation ("Seller"), on the one hand, and BAYSIDE
HEALTH GROUP LLC, a Washington limited liability
company, or its permitted assigns ("Purchaser"), on the
other hand.
1. Purchase and Sale
On the terms and conditions set forth herein,
Seller shall sell to Purchaser and Purchaser shall
purchase from Seller the following:
(a) Facility. The real property situated in the
State of Florida, which is more particularly described
in Exhibit "A" attached hereto (the "Real Property")
and the improvements thereon that constitute a 79 unit
assisted living facility known as Barrington Place,
0000 X. Xxxxxxx Xxxxxx Xxxx, Xxxxxxx, Xxxxxxx 00000
(the "Facility") together with all tenements,
hereditaments, rights, privileges, interests, easements
and appurtenances now or hereafter belonging or in any
way pertaining to the Real Property and/or the
Facility.
(b) Personal Property. All equipment, furniture,
fixtures, appliances, tools, instruments, and other
tangible personal property owned by the Seller as of
the date of this Agreement or acquired by the Seller
prior to the Closing Date (as hereinafter defined), and
located on the Real Property and/or used in connection
with the operation of the Facility (the "Personal
Property"). Seller shall obtain and transfer to
Purchaser the titles to the leased motor vehicle(s)
identified on Schedule 1 attached hereto, provided that
the Purchaser shall pay to Seller at the Closing (as
hereinafter defined), in addition to the Purchase Price
(as hereinafter defined) the sum of Twenty Thousand and
no/100 Dollars ($20,000.00) for such motor vehicle(s).
(c) Inventory. All inventories of every kind and
nature whatsoever (specifically including, but not
limited to, all pharmacy supplies, medical supplies,
office supplies, other supplies and foodstuffs) owned
by Seller as of the date of this Agreement or hereafter
acquired, and relating to the Facility, except
inventory sold or consumed in the ordinary course of
business from and after the date of this Agreement
(collectively, the "Inventory"). On the Closing Date,
the Inventory will be at customary levels and
sufficient to conduct ordinary business.
(d) Intangible Personal Property. To the extent
transferable, all of Seller's rights, if any, to the
telephone numbers of the Facility and the medical
records, administrative records, manuals, and other
books and records relating directly to the operation of
the Facility and located therein, lien waivers, surety
agreements, payment and performance bonds, warranties,
guaranties, utility use agreements, covenants,
commitments, permits, certificates, approvals, and
other intangible personal property of every kind and
nature (including, without limitation, the name of the
Facility) which can be legally transferred and which
relate directly to the Facility (the "Intangible
Personal Property"), and including accounts receivable
relating to the Facility, but excluding cash and cash
equivalents; provided, however, that in no event shall
the Intangible Personal Property to be transferred by
Seller to Purchaser hereunder include any of the
proprietary systems, methods, procedures and controls
employed by Seller or any written materials, manuals or
brochures used by Seller to document the same, all of
which are to remain the property of Seller.
Hereinafter the Real Property, the Facility, the
Personal Property, the Inventory and the Intangible
Personal Property shall sometimes be collectively
referred to as "Seller's Assets." Seller acknowledges
and agrees that except as otherwise provided herein,
Purchaser is not assuming any of the liabilities of the
Seller or the Facility whether known or unknown,
contingent or fixed,
which relate to the period prior to the Closing Date
(the "Non-Assumed Liabilities"). Purchaser understands
and acknowledges that Seller leases, and does not own,
the Real Property, the Facility and some or all of the
Personal Property from Meditrust Company LLC (formerly
known as Meditrust Acquisition Corporation I)
("Meditrust"), and Purchaser agrees that the execution
and delivery by Meditrust of certain documents,.
including without limitation a deed is required as a
condition to Seller's and Purchaser's obligations
hereunder. Seller agrees that it will make all
reasonable efforts, with all due diligence, to cause
Meditrust to take such action as is necessary to
consummate the transaction contemplated by this
Agreement.
2. Purchase Price
Except as otherwise provided below, the purchase
price ("Purchase Price") payable by Purchaser for
Seller's Assets shall be Four Million Six Hundred
Thousand and no/100 Dollars ($4,600,000.00) and shall
be payable as follows:
(a) Deposit. Fifty Thousand and no/100 Dollars
($50,000) upon execution of this Agreement by
Purchaser's execution and delivery to Seller of a
promissory note ("Note") in the form attached hereto as
Exhibit B. Upon Purchaser's payment to Seller of the
amount due as and when required by the terms of such
Note, such amount shall be delivered to Chicago Title
Insurance Company ("Escrow Agent"), which shall deposit
the same in an interest bearing account (the
"Deposit"). All interest earned on the Deposit shall
belong to the party entitled to the Deposit under the
terms of this Agreement.
(b) Cash Balance. The balance of the Purchase
Price of Four Million Five Hundred Fifty Thousand
no/100 Dollars ($4,550,000.00) (plus or minus any costs
and prorations for which Seller and/or Purchaser are
responsible under the terms hereof and as the same may
be adjusted to reflect an adjustment to the Purchase
Price in accordance with the terms hereof in
immediately available funds at Closing.
3. Closing
(a) The Closing Date. The Closing of the purchase
and sale under this Agreement (the "Closing") shall
take place on June 30,1998 or such later date, as soon
thereafter as possible, as Purchaser has obtained a
license to operate the Facility and all of the
conditions to closing set forth herein have been
satisfied or waived; provided, however, in no event
shall closing occur later than July 30,1998 (the
"Outside Closing Date"), it being understood and agreed
that if the conditions to closing have not been
satisfied as of July 30,1998 either party shall have
the right to exercise the termination rights set forth
in Paragraph 15. The date upon which the Closing
actually occurs is referred to herein as the Closing
Date.
(b) The Closing Process. Closing shall occur
through escrow and accordingly, at or prior to the
Closing Date, Purchaser and Seller shall deposit in
escrow with the Escrow Agent all documents and monies
necessary to close this transaction as herein provided.
Closing of escrow shall also mean and include the
recording of the deed in the county where the Facility
is located. Time is of the essence of this Agreement.
Closing shall occur in accordance with the procedures
and instructions given by Seller and Purchaser to the
Escrow Agent prior to Closing.
4. Accounts Receivable
Seller shall transfer to Purchaser, on the Closing
Date, all of Seller's right, title and interest in and
to Seller's accounts receivable relating to the
Facility, and Purchaser shall pay to Seller at the
Closing, in addition to the Purchase Price, an
additional amount equal to one-half of
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the aggregate amount of the outstanding balance as of
the Closing Date of such accounts receivable.
5. Costs and Prorations
(a) Costs and Expenses. Costs and expenses
associated with the sale of Seller's Assets to
Purchaser shall be allocated between the parties as
follows:
(i) Seller shall pay any state, county, or
local transfer tax due and payable by virtue of the
transfer to Purchaser of the Real Property and
Facility;
(ii) Seller shall pay the cost of the Title
Commitment (as defined below) and the premium
attributable to a standard coverage Owner's Title
Policy with respect to each of the Real Property and
the Facility, and Purchaser shall pay the cost of the
Lender's Title Policy, including the cost of any title
endorsements to the Lender' s Title Policy required by
Purchaser' s lender, the premium attributable to an
extended coverage Owner's Title Policy and the cost of
any title endorsements which Purchaser elects to
secure, the cost of the Litigation and Lien Search (as
defined below) and the cost of the Survey (as defined
below), in the event Purchaser elects to obtain the
same in order to secure such extended coverage title
insurance or is required to secure the same by its
lender.
(iii) Seller shall pay the cost of any
recording fees, other than any recording fees related
to any financing assumed or secured by Purchaser in
connection with the transaction provided for herein;
(iv) Purchaser and Seller shall each pay their own
attorney's fees;
(v) Purchaser and Seller shall share any
escrow fees on a 50-50 basis;
(vi) Purchaser will pay for the cost of the
Asbestos and Environmental Report (as defined in
Section 13(a)(v)), if Purchaser elects to secure the
same;
(vii) Purchaser shall pay any sales or use
tax due with respect to the sale of Seller's Assets to
Purchaser.
(b) Prorations and Adjustments. At Closing,
(i) Real and Personal Property taxes shall be
prorated as of the Closing Date, with Seller
responsible therefor for the period prior to the
Closing Date and with Purchaser responsible therefor
for the period from and after the Closing Date.
(ii) Seller shall arrange for a final
statement with respect to all utilities serving the
Real Property and the Facility as of the Closing Date
and shall pay all fees identified thereon, to the
extent applicable to periods prior to Closing, and
Purchaser shall arrange for all such utilities to be
billed in its name from and after the Closing Date and
shall pay all fees due therefor as of the Closing Date.
(iii) All revenues (including but not limited
to rent due from the tenants of the Facility) and
expenses (including but not limited to payroll and
employee benefits, and including any prepaid expenses)
related to the ownership or operation of the Seller's
Assets shall be prorated
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as of the Closing Date, with Seller responsible
therefor for the period prior to the Closing Date and
with Purchaser responsible therefor for the period from
and after the Closing Date.
6. Possession
At Closing, Seller shall deliver to Purchaser
possession of the Seller's Assets, subject only to
rights of residents of the Facility.
7. Representations and Warranties of Seller
Seller hereby warrants and represents to Purchaser
that:
(a) Authority. This Agreement is valid, binding
and enforceable against Seller in accordance with its
terms, except as such enforceability may be limited by
applicable bankruptcy laws and general principles of
equity. The execution of this Agreement and the
consummation of the transactions contemplated herein do
not result in a breach of the terms and conditions of
nor constitute a default under or violation of the
Seller' s Articles of Incorporation or Bylaws or of any
law, regulation, court order, mortgage, note, bond,
indenture, agreement, license or other instrument or
obligation to which Seller is now a party or by which
Seller or any of the assets of Seller may be bound or
affected (except that Meditrust's consent is required
for such transactions and consents may be required in
connection with the Existing Financing or the
assignment of the Operating Contracts).
(b) Necessary Action. Seller will make all
reasonable efforts, with all due diligence, to take all
action and obtain all consents prior to the Closing
necessary for it to lawfully enter into and carry out
the terms of this Agreement.
(c) Litigation. Except as otherwise described in
Exhibit "C" attached hereto, Seller has no knowledge
that there are any actions, suits, investigations or
proceedings pending or threatened by or before any
court, administrative agency or other governmental
authority or any arbitrator against or relating to the
Facility or the business being conducted thereon, or
against or relating to Seller with respect to its
ownership of the Seller's Assets. Any such actions,
suits or proceedings which are pending or threatened
with respect to the Seller's Assets and which are set
forth in "Exhibit C", would not interfere with or bring
into question the validity of the transaction
contemplated by this Agreement and are not reasonably
likely to result in a material adverse change in the
business, assets or condition of the Seller's Assets.
The transaction contemplated herein has not been
challenged by any governmental agency or any other
person, nor does Seller know or have reasonable grounds
to know, of any basis for any such actions, suits or
proceedings.
(d) Compliance with Law. Seller represents and
warrants as follows with respect to the compliance of
Seller's Assets with law:
(i) Except as set forth in Exhibit "D."
Seller has not received any written notice and Seller
has no actual knowledge that the Facility and its
operation and use are not now in compliance with all
applicable municipal, county, state and federal laws,
regulations, statutes, ordinances, standards and orders
and all administrative rulings and with all municipal,
health, building, land use and zoning laws and
regulations where the failure to comply therewith could
have a material adverse effect on the business,
property, condition (financial or otherwise) or
operation of the Facility as a licensed assisted living
facility. To the best of Seller's knowledge, (A) the
zoning applicable to the Facility is as described in
the zoning compliance letter attached
4
hereto as Exhibit D-1, and (B) Seller has provided to
Purchaser copies of all information in Seller's
possession relating to the zoning applicable to the
Facility;
(ii) Except as set forth in Exhibit "D,"
Seller has not received any written notice of any
outstanding deficiencies or work orders of any
authority having jurisdiction over the Facility
requiring conformity to any applicable statute,
regulation, ordinance or by-law pertaining to assisted
living facilities which have not been fully satisfied
prior to the date hereof or which will not be fully
satisfied prior to the Closing;
(iii) Except as set forth in Exhibit "D,"
Seller has not received any written notice that there
are any claims, requirement or demand of any licensing
or certifying agency supervising or having authority
over the Facility or otherwise to rework or redesign it
or to provide additional furniture, fixtures, equipment
or inventory so as to conform to or comply with any
exiting law, code or standard which have not been fully
satisfied prior to the date hereof or which will not be
fully satisfied prior to the Closing;
(iv) Except as set forth in Exhibit "D: '
Seller has not received any notice from any
governmental body claiming a violation of any building,
zoning, environmental or other laws or ordinances; and
(v). Except as set forth in Exhibit "D"
Seller has not received any notice that the Facility
and the occupancy and operation thereof are not in
compliance with the certificate of occupancy therefor a
true and correct copy of which has been provided to
Purchaser or will be provided to Purchaser within ten
(10) days after the execution of this Agreement.
(vi) Seller has provided or within five (5)
days after the date hereof will provide to Purchaser
copies of the most recent survey reports, any waivers
of deficiencies, plans of correction, and any other
investigative reports issued with respect to the
Facility which are in Seller's possession with respect
to the Facility (collectively, "Reports"). Purchaser
has heretofore approved of all of such Reports
delivered prior to the date hereof. Within five (5)
business days after Seller' s delivery of any Reports
from and after the date hereof, Purchaser will review
and approve or disapprove the same by notice delivered
to Seller specifically referencing this Paragraph of
this Agreement. Purchaser's failure to deliver any such
notice within such time period shall be deemed approval
of such Reports. Purchaser agrees that Purchaser will
not disapprove any such Reports unless Material
Deficiencies are disclosed therein. For purposes of
this Agreement, "Material Deficiencies" means
deficiencies that (i) are required by applicable
authorities to be corrected, and (ii) would cost in
excess of $250,000 to correct either individually or in
the aggregate. In the event that Purchaser disapproves
any Reports showing Material Deficiencies, Seller will
elect, by notice delivered to Purchaser within five (5)
business days after Purchaser's delivery of such notice
to Seller, either to cure such deficiencies or to
terminate this Agreement. Seller's failure to deliver
any such notice shall be deemed to be Seller's election
to terminate this Agreement. If Seller elects to
terminate this Agreement, then the Deposit and any
accrued interest thereon shall be returned to Purchaser
and neither party shall have any further rights or
obligations under this Agreement. If Seller elects to
cure such deficiencies, Seller shall do so before
Closing hereunder and the Closing shall be extended for
such period of time as may be required for Seller to
complete such cure.
(e) Status of Seller. Seller is a Washington
corporation and is duly qualified to do business as a
foreign corporation under the laws of the State of
Florida. Seller has full power and authority to execute
and deliver this Agreement and all related documents
and subject to obtaining required consents and action
required to be taken by Meditrust as referenced herein
to carry out the transactions contemplated herein.
5
(f) Title. At Closing, Seller or Meditrust will
have and will deliver to Purchaser good and marketable
fee simple title to the Real Property and the Facility
subject only to the easements, reservations and
encumbrances, if any, which are of record as of the
date hereof and which may be reflected in the Title
Policy; provided, however, that nothing herein shall be
construed as requiring Purchaser to approve any or all
of such easements, reservations and encumbrances of
record, it being understood and agreed that the same
are and shall be subject to the review and approval of
Purchaser pursuant to Paragraph 13(a)(i) and once
approved by Purchaser shall be deemed for purposes of
this Agreement to be the "Permitted Exceptions" to
Seller's title to the Real Property the Facility. None
of the Real Property, the Facility nor the Personal
Property is subject to any option or other right to
purchase in favor of any third party.
(g) The Facility. The Facility is an assisted
living facility with a total of 79 operational and
licensed units and is not certified to participate in
either the Medicare or the Medicaid Programs. On the
Closing Date, Seller or Meditrust shall assign to
Purchaser any and all warranties on all construction,
systems, walls, windows, appliances, roof and other
features and the furniture, fixtures and equipment of
the Facility. Except as otherwise specified herein,
Seller has no actual knowledge of any Material
Deficiencies in the Facility.
(h) The Personal Property. At Closing Seller or
Meditrust shall convey to Purchaser good and clear
marketable title to the Personal Property, the
Inventory and the Intangible Personal Property subject
only to the Permitted Exceptions.
(i) Condemnation. Seller has no knowledge that
there is presently any
condemnation action pending or threatened with respect
to the Facility or any part thereof.
(j) Materials and Documents. Seller has no actual
knowledge that any of the materials or documents
prepared by Seller and delivered to Purchaser in
connection with the execution and delivery of this
Purchase Agreement and Purchaser's investigations
hereunder are inaccurate or misleading in any material
respect. Seller has not intentionally withheld from
such materials or documents any written reports
relating to uncured physical defects at the Facility.
EXCEPT AS MAY BE EXPRESSLY SET FORTH IN THIS AGREEMENT
(INCLUDING WITHOUT LIMITATION PARAGRAPH 7(d)(i) AND
EXHIBIT D HEREOF), IT IS UNDERSTOOD AND AGREED THAT
SELLER IS NOT MAKING AND HAS NOT AT ANY TIME MADE ANY
REPRESENTATIONS OR WARRANTIES AS TO ZONING, OPERATING
HISTORY OR PROJECTIONS, COMPLIANCE OF OR BY THE
FACILITY OR ITS OPERATIONS WITH RESPECT THERETO OR WITH
ANY LAWS, RULES, ORDINANCES OR REGULATIONS OF ANY
APPLICABLE GOVERNMENTAL AUTHORITY OR BODY. THE
PROVISIONS OF THIS SECTION SHALL SURVIVE CLOSING.
(k) Employees of the Facility; Unions. None of the
employees of the Facility are members of a labor union
in connection with their employment at the Facility or
subject to any collective bargaining agreement in
connection with their employment at the Facility nor,
to the best of Seller's knowledge, are any such
employees engaged in any union organizing activities in
connection with their employment at the Facility.
Seller is not a party to any labor dispute or grievance
under any union contract with respect to the terms and
conditions of employment at the Facility.
(l) Facility Leases. Attached hereto as Exhibit
"E" is a true and correct rent roll dated as of , ___
1998 with respect to the Facility, setting forth the
name of the resident/tenant, the unit or office
occupied, the current monthly rent and the amount of
any security deposit being held by Seller from each
such tenant. Attached hereto as Exhibit "E" is a
representative form of the rental agreements currently
in effect with the residents of the Facility (the
"Facility Leases"). Seller is
6
not in default of its obligations under the Facility
Leases and Seller is not aware of any default by any
other party thereto other than as set forth in Exhibit
"E." Each of the Facility Leases is in full force and
effect and none of the Facility Leases has been amended
or modified except as set forth in Exhibit "E."
(m) Operating Contracts. Within five (5) days
after the date hereof, Seller will provide to Purchaser
true and correct copies of all operating agreements in
effect with respect to Seller's operations at the
Facility (the "Operating Contracts"). Within ten days
after the date on which Seller delivers copies of the
Operating Contracts to Purchaser, Purchaser shall give
Seller written notice referencing this Paragraph and
specifying which of the Operating Contracts Purchaser
elects to assume (the "Assumed Contracts"). Purchaser's
failure to give any such notice within such time period
shall be deemed to be Purchaser's election to assume
all of the Operating Contracts. All of the Assumed
Contracts shall be assigned to, and assumed by,
Purchaser at Closing.
(n) Hazardous Materials. Except as disclosed in
the environmental report(s) relating to the Facility
which Seller has delivered or shall deliver to
Purchaser or which Purchaser otherwise shall obtain,
Seller has no actual knowledge, and Seller has not
received any written notice from a governmental or
quasi-governmental authority having jurisdiction, that
the Real Property or the Facility is in violation of
any federal, state, county or local environmental laws.
During the time in which Seller has owned the Property,
Seller has not received written notice from any
governmental or quasi governmental authority that
Seller or any tenant has, used, generated, transported,
treated, constructed, deposited, stored, disposed,
placed or located at, on, under or from the Real
Property or the Facility in violation of any federal,
state, county or local environmental laws any flammable
explosives, radioactive materials, hazardous or toxic
substances, materials or wastes, pollutants or
contaminants defined, listed or regulated by any
federal, state, county or local environmental laws, and
except as disclosed in the environmental report(s)
relating to the Facility which Seller has delivered or
shall deliver to Purchaser or which Purchaser otherwise
shall obtain, Seller has no actual knowledge of any of
the same.
8. Representations and Warranties of Purchaser
Purchaser hereby jointly and severally warrants
and represents to Seller that:
(a) Status of Purchaser. Purchaser is a limited
liability company duly organized, validly existing and
in good standing under the laws of the State of
Washington and prior to the Closing Purchaser shall be
qualified to do business in and in good standing under
the laws of the State of Florida if and to the extent
necessary for it to lawfully consummate the transaction
provided for herein.
(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 applicable creditors rights laws and
general principles of equity. The execution of this
Agreement and the consummation of the transaction
contemplated herein does not result in a breach of the
terms and conditions of nor constitute a default under
or violation of Purchaser' s Certificate of Formation,
Operating Agreement or other organizational documents
or of any law, regulations, 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.
7
(c) Litigation. To the best of Purchaser's
knowledge 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, nor does Purchaser know
or have reasonable grounds to know of any basis for any
such action.
(d) Necessary Action. Purchaser will make all
reasonable efforts, with all due diligence, to take all
action and obtain all consents prior to Closing
necessary for them to lawfully enter into and carry out
the terms of this Agreement.
(e) AS IS CONDITION. PURCHASER ACKNOWLEDGES THAT
THE SELLER'S ASSETS ARE BEING SOLD IN THEIR AS IS WHERE
IS NO FAULTS CONDITION AND THAT EXCEPT AS EXPRESSLY SET
FORTH IN THIS AGREEMENT (INCLUDING WITHOUT LIMITATION
PARAGRAPH I 0(a)(iii) AND EXHIBIT J HEREOF) SELLER
MAKES NO REPRESENTATION OR WARRANTY OF ANY KIND,
EXPRESS OR IMPLIED WITH RESPECT TO (A) THE DESIGN,
CONSTRUCTION, LOCATION, SIZE, CHARACTER, PHYSICAL
CONDITION OR STATE OF REPAIR OF THE SELLER'S ASSETS OR
ANY PORTION THEREOF; (B) THE TOPOGRAPHY, DRAINAGE OR
CONDITION OF THE SURFACE AND SUBSURFACE SOILS OF OR ON
THE REAL PROPERTY, (C) THE PRESENCE OR ABSENCE OF
HAZARDOUS WASTE OR HAZARDOUS SUBSTANCES ON OR FROM THE
REAL PROPERTY OR THE FACILITY; (D) THE MERCHANTABILITY,
HABITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF
THE SELLER'S ASSETS, (E) THE AMOUNT OF, OR THE BASIS OF
ASSESSMENT FOR, ANY TAXES LEVIED WITH RESPECT TO THE
SELLER'S ASSETS, (F) THE COMPLIANCE OF THE SELLER'S
ASSETS WITH ANY APPLICABLE GOVERNMENTAL REQUIREMENT OR
ANY OTHER REPRESENTATION OR WARRANTY NOT EXPRESSLY SET
FORTH IN THIS AGREEMENT. BY EXECUTION OF THIS
AGREEMENT, PURCHASER REPRESENTS AND WARRANTS TO SELLER
THAT PURCHASER IS AN EXPERIENCED, SOPHISTICATED
PURCHASER OF COMMERCIAL REAL ESTATE, WITH KNOWLEDGE AND
EXPERIENCE SUFFICIENT TO ENABLE IT TO EVALUATE THE
MERITS AND RISKS OF THE SALE, AND THAT IT IS
REPRESENTED BY KNOWLEDGEABLE AND EXPERIENCED LEGAL
COUNSEL OF ITS OWN CHOOSING AND AGREES THAT NEITHER
SELLER NOR ITS AGENTS OR REPRESENTATIVES HAS MADE AND
THAT PURCHASER HAS NOT RELIED UPON ANY REPRESENTATION
OR WARRANTY OF ANY KIND WHICH IS NOT EXPRESSLY SET
FORTH IN THIS PURCHASE AGREEMENT IN CONNECTION WITH THE
SALE OF THE SELLER'S ASSETS OR PURCHASER'S ACTUAL
PURCHASE THEREOF PURSUANT TO THE TERMS OF THIS
AGREEMENT, IT BEING UNDERSTOOD AND AGREED THAT ANY SUCH
PURCHASE WILL BE BASED SOLELY UPON THE REPRESENTATIONS
AND WARRANTIES OF SELLER SPECIFICALLY SET FORTH IN THIS
AGREEMENT, UPON THE RESULTS OF THE ENVIRONMENTAL REPORT
PROVIDED BY SELLER PURSUANT TO THE TERMS OF THIS
AGREEMENT AND UPON PURCHASER'S INSPECTION AND
INVESTIGATION OF THE SELLER'S ASSETS DURING THE REVIEW
PERIOD PROVIDED FOR IN THIS AGREEMENT.
9. Brokers
Seller and Purchaser each represent, covenant, and
warrant to the other that each has employed no other
broker or finder in connection with the transaction
contemplated herein, except as provided below. Seller
has employed 2 BeMa Network (the "Broker") as the
broker with respect to this transaction and will
compensate the Broker pursuant to a separate agreement
with the Broker. Seller agrees to indemnify and hold
Purchaser harmless from and against all liability,
8
claims, demands, damages or costs of any kind,
including attorneys' fees, arising from or connected
with any broker's commission or finder's fee or
commission or charge claimed to be due to the Broker or
any other person arising from Seller's conduct with
respect to this transaction. Purchaser agrees to
indemnify and hold Seller harmless from and against all
liability, claims, demands, damages or costs of any
kind, including attorneys' fees, arising from or
connected with any broker's commission or finder's fee
or commission or charge claimed to be due any person
arising from Purchaser's conduct with respect to this
transaction.
10. Seller's Covenants
(a) Pre-Closing. Between the date hereof and the
Closing, Seller does hereby covenant as follows:
(i) Seller 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;
(ii) Seller will provide Purchaser within ten
( 10) days after execution of this Agreement with
copies of any appraisals, surveys, inspection and
testing documentation or reports, including, but not
limited to, environmental reports, structural report or
geological reports which may be in Seller's possession
with respect to the Facility and the Real Property;
provided, however, that Seller makes no representations
or warranties with respect to the truth, accuracy or
completeness of said reports; and
(iii) Seller will operate the Facility in the
ordinary course of business and in compliance with
applicable law, including maintaining the Facility's
license and its current insurance coverage in effect,
maintaining the Seller's Assets in good condition and
repair, ordinary wear and tear excepted, and
maintaining current salary levels and benefits. In
addition, Seller will cause the items listed on Exhibit
J to be repaired prior to the Closing Date;
(iv) Subject to Purchaser's indemnity
obligations set forth in Paragraph 14(b), Seller will
provide Purchaser and Purchaser's lender and their
officers, agents and employees with unlimited access to
the Facility and to the books and records of the
Facility for the purpose of conducting any and all
inspections thereof which Purchaser and/or Purchaser' s
lender deem to be necessary and appropriate in order to
assess the physical, financial and operational
condition thereof; provided, however, that such access
and inspection shall be with at least 24 hours prior
notice and during normal business hours at such time
and in such manner as the parties shall reasonably
agree upon; and provided, further, that a
representative of Seller shall have the right to
accompany Purchaser and/or Purchaser's lender and their
officers, agents and employees on any inspections which
may be conducted; and
(v) Seller will file all returns, reports and
filings of any kind or nature which are required to be
filed by Seller between the date hereof and the Closing
Date and will timely pay all taxes or other obligations
which are due and payable with respect to Seller's
Assets between the date hereof and the Closing Date
where the failure to file such reports could reasonably
be expected to result in a lien on the Seller's Assets
either before or after Closing.
(vi) Seller will promptly notify Purchaser of
any materially adverse changes affecting the validity
or accuracy of its representations and warranties of
which it becomes aware prior to the Closing.
9
(b) Closing. At the Closing, Seller agrees that it will
or will cause Meditrust to:
(i) Execute and deliver to Purchaser a deed
with respect to the Facility, in the form attached
hereto as Exhibit "G" (or such other form as shall be
reasonably satisfactory to Purchaser and Seller), and a
Xxxx of Sale with respect to the Facility, in the form
attached hereto as Exhibit "H" (or such other form as
shall be reasonably satisfactory to Purchaser and
Seller);
(ii) Deliver to Purchaser a certificate dated
as of the date of Closing certifying to the matters
referenced in Paragraphs 13(a)(vii) and (viii) hereof;
(iii) Execute an assignment and assumption
agreement with respect to the Facility Leases (the
"Lease Assignment Agreement");
(iv) Execute an assignment and assumption
agreement with respect to the Assumed Contracts (the
"Contract Assignment Agreement"); and
(v) Pay for any of the costs and expenses
identified in Paragraph 5 for which it
is responsible.
(c) Post-Closing.
(i) After the Closing, Seller agrees that 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, may be necessary to assure,
complete and evidence the full and effective transfer
and conveyance of Seller's Assets.
(ii) Seller agrees that for a period of three
(3) years immediately following the Closing (the "Non-
Competition Period"), Seller shall not purchase, build,
own, lease, manage or operate any assisted living
facility within a five (5) mile radius from the
Facility (the "Covered Territory"), except for any
assisted living facility presently owned, leased,
managed or operated or being developed by Seller within
the Covered Territory, a list of which shall be
provided by Seller to Purchaser within five (5) days
after the date hereof. In addition, during the Non-
Competition Period, Seller agrees not to solicit or
induce any of the Facility employees or independent
contractors to terminate their employment or
contractual relationships with Purchaser.
(iii) Purchaser shall preserve the books and
records Purchaser obtains from Seller pursuant to this
Agreement, and Purchaser shall provide Seller with
access during normal business hours to any books or
records which Seller may need to file, defend or
otherwise deal with tax returns, securities filings or
other filings filed prior to or subsequent to the
Closing Date which in any way relate to the period
prior to the Closing Date.
11. Purchaser's Covenants
(a) Pre-Closing. Between the date hereof and the
Closing, except as contemplated by this Agreement or
with the consent of Seller, 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; and
(ii) Purchaser will make all reasonable
efforts, with all due diligence, to obtain
10
all. consents, approvals and licenses necessary to
permit the consummation of the transaction contemplated
by this Agreement and/or necessary to permit Purchaser
to own and to operate the Facility as of the Closing
Date.
(b) Closing. At the Closing, Purchaser agrees that
it will:
(i) Pay the balance of the cash portion of
the Purchase Price due at Closing;
(ii) Deliver to Seller a certificate dated as
of the date of Closing certifying to the matters
referenced in Paragraph 13(b)(i) and (ii) hereof;
(iii) Pay for any of the costs and expenses
specified in Paragraph 5 for which it
is responsible;
(iv) Execute and deliver the Contract
Assignment Agreement;
(v) Execute and deliver the Lease
Assignment Agreement.
(c) Post-Closing.
(i) After Closing Purchaser agrees that it
will take such actions and properly execute and deliver
to Seller such further instruments of assignment,
conveyance and transfer as, in the reasonable opinion
of counsel for Seller, may be necessary to assure,
complete and evidence the full and effective transfer
and conveyance of Seller's Assets.
(ii) Purchaser agrees that during the Non-
Competition Period, Purchaser shall not solicit or
induce any of the employees or independent contractors
of Seller or its affiliates to terminate their
employment or contractual relationships with Seller
(provided, however, that this paragraph shall not apply
to any of the Assumed Contracts, all of which shall be
permitted to be assumed by Purchaser).
12. Mutual Covenants
Following the execution of this Agreement,
Purchaser and Seller agree:
(a) If any event should occur 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.
(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.
(c) To effect in a timely fashion all prorations
contemplated in this Agreement.
13. Conditions Precedent to Closing
(a) Purchaser's Conditions. Purchaser's obligation
to purchase Seller's Assets hereunder is subject to the
following conditions, any one or all of which may be
waived by Purchaser:
11
(i) Title and Survey Review. Prior to 5:00
P.M. (Pacific Time) on the twenty first (21st) calendar
day following the date hereof (the "Approval Date"),
(A) Seller shall cause to be delivered to Purchaser a
title commitment (the "Facility Title Commitment")
issued by Chicago Title Insurance Company (the "Title
Company") for an Owner's Policy of Title Insurance
covering the Real Property and the Facility (the "Title
Commitment") and (B) if and to the extent Purchaser
elects to obtain the same, Purchaser shall order at its
own cost and expense (i) a litigation, bankruptcy,
judgment and security interest search in the name of
Seller and the Facility, (the "Litigation and Lien
Search") and (ii) an ALTA survey of the Real Property
and the Facility, certified to Purchaser, the Title
Company and Purchaser's lender, meeting the survey
requirements set forth in Exhibit "I" and otherwise
satisfactory to cause the Title Commitment to be issued
without survey exception (the "Survey"). Seller shall
also cause to be provided and delivered to Purchaser
legible copies of all documents referred to in the
Title Commitment (the
"Exception Documents"). Purchaser shall have ten (10)
business days after its confirmed receipt of the Title
Commitment and the Exception Documents (the "Title
Review Period") to approve or disapprove in writing the
Title Commitment and, if Purchaser elects to obtain the
same, the Survey and the results of the Litigation and
Lien Search. The failure of Purchaser to disapprove the
Title Commitment and, if Purchaser elects to obtain the
same, the Survey and/or the Litigation or Lien Search
results within the Title Review Period shall be deemed
approval by Purchaser of such items. If Purchaser
disapproves any such items or documents, Seller shall
have five (5) business days from the date of such
disapproval in which to advise Purchaser whether or not
it is prepared to cure the same prior to Closing and in
the event Seller fails or refuses to do so within said
five (5) business day period, Purchaser shall have two
(2) business days thereafter in which to advise Seller
in writing of its election either to waive the matters
to which it has objected and which Seller is not
prepared to cure or to terminate this Agreement and to
demand the return of its Deposit and the accrued
interest thereon. The title and survey objections
approved or deemed approved by Purchaser pursuant to
this Paragraph 13(a)(i) shall hereinafter be referred
to as the "Permitted Exceptions."
(ii) Physical Condition. [INTENTIONALLY
OMITTED]
(ii) Asbestos and Environmental Report. On or
prior to the Approval Date, Purchaser shall have the
right, at its sole cost and expense, to obtain from a
duly licensed environmental inspection company approved
by Purchaser a report with respect to each of the
Facility indicating (A) the presence (or absence) of
asbestos in the Facility, the level thereof, whether it
is friable or non-friable, if it is friable the
recommended steps to correct the problem and the
anticipated cost thereof and (B) a Phase I EPA
Assessment (collectively the "Asbestos and
Environmental Reports"). Purchaser shall have until the
tenth (10th) business day after the Approval Date (the
"Environmental Review Period") to approve or disapprove
the Asbestos and Environmental Report in Purchaser's
sole and absolute discretion. Should Purchaser
disapprove the Asbestos and Environmental Report, it
shall notify Seller in writing of such disapproval and
the reasons therefor at or prior to the expiration of
the Environmental Review Period (the
"Environmental Notice"). The failure of Purchaser to
indicate disapproval on or prior to the expiration of
the Environmental Review Period shall be deemed
approval. If Seller advises Purchaser within ten (10)
days after its receipt of Purchaser's Environmental
Notice that Seller is unwilling or unable to remedy all
such objections prior to the Closing Date, Purchaser
shall have two (2) business days thereafter in which to
advise Seller in writing of its election either to
waive the matters which Purchaser has disapproved and
which Seller is unwilling or unable to remedy or to
terminate this Agreement and to demand the return of
its Deposit and the accrued interest thereon.
(iv) Title Insurance. As of the Closing Date,
the Title Company shall issue with respect to the Real
Property and the Facility an owner's policy of title
insurance to Purchaser in the
12
aggregate in the full amount of the purchase price (the
"Owner's Title Policy"), which shall reflect only the
Permitted Exceptions.
(v) Regulatory Approval; Licensing. At or
prior to Closing, Purchaser shall have received all
consents, approvals, licenses and certificates as may
be necessary for Purchaser lawfully to own and operate
the Facility as operated by Seller with 79 licensed
units.
(vi) No Defaults. At Closing Seller shall not
be in default, where said default cannot be cured by
Closing, under any mortgage, contract, lease or other
agreement affecting or relating to the Seller's Assets.
(vii) Seller's Performance. At Closing Seller
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.
(viii) Seller's Representations and
Warranties. At Closing Seller'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 at and as of the date of Closing as
though such representations and warranties were then
again made (subject to such changes as shall occur in
the ordinary course of business from the date hereof
through the Closing Date, to the extent such changes
are permitted under this Agreement).
(b) Seller's Conditions. Seller's obligation to
sell Seller's Assets hereunder is subject to the
fulfillment of each of the following conditions, any
one or all of which may be waived by Seller in writing:
(i) Purchaser's Representations and
Warranties. 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 (subject to such
changes as shall occur in the ordinary course of
business from the date hereof through the Closing Date,
to the extent such changes are permitted under this
Agreement).
(ii) Purchaser's Performance. At Closing,
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
Seller in accordance with the terms hereof.
(iii) Approvals. Seller shall have received
all consents, approvals, certifications and licenses as
may be necessary for the transfer of Seller's Assets to
Purchaser.
14. Indemnification.
(a) Seller's Indemnification. Seller shall
indemnify and hold Purchaser harmless from and against:
(i) Except as otherwise provided in this
Agreement, any and all obligations relating to the
ownership of Seller's Assets and the operation of the
Facility which exist at the Closing Date;
13
(ii) Any and all damage, loss or liability
arising from and after the Closing Date under any of
the Operating Contracts other than the Assumed
Contracts;
(iii) 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 Seller under this Agreement or
from any misrepresentation in any certificate furnished
or to be furnished by Seller to Purchaser hereunder;
and
(iv) 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.
For purposes of Paragraph 14(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.
(b) Purchaser's Indemnification. Purchaser shall
indemnify and hold Seller harmless from and against:
(i) Except as otherwise provided in this
Agreement, any and all obligations relating to the
ownership of the Seller's Assets and the operation of
the Facility from and after the Closing Date,
including, but not limited to any obligations under any
of the Operating Contracts which Purchaser elects to
assume at Closing;
(ii) Any and all damage, loss or liability
resulting from (A) any misrepresentation of a material
fact, breach of warranty or nonfulfillment of any
agreement o n the part of Purchaser under this
agreement or from any misrepresentation in any
certificate furnished or to be furnished by Purchaser
to Seller hereunder, or (B) the exercise by Purchaser
or its lender of Purchaser's rights under Paragraph
10(a)(iv) above; and
(iii) 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.
15. Termination
(a) Grounds for Termination. This Agreement may be
terminated and the transaction contemplated herein
abandoned at any time prior to Closing:
(i) By mutual written agreement of the
parties;
(ii) By Seller, if any of the conditions set
forth in Paragraph 13(b) shall have become incapable of
fulfillment prior to the Outside 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 Seller and the same shall not have
been waived by Seller;
(iii) By Purchaser, if any of the conditions
set forth in Paragraph 13 (a) shall have become
incapable of fulfillment prior to the Outside 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;
14
(iv) By either Seller or Purchaser in the
event of a material breach by the other party of its
obligations hereunder;
(v) By either Seller or Purchaser if the
Closing has not occurred by the Closing Date specified
in Paragraph 3 as the same may be extended in
accordance with the terms of this Agreement;
(vi) By either Purchaser or Seller, in the
event that prior to the Closing Date a material portion
of the Seller's Assets 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; or
(vii) By Seller, if Purchaser shall fail to
pay or perform any of its obligations under the Note as
and when due in accordance with the terms hereof,
provided that no such termination shall affect Seller's
right to enforce the Note and collect all amounts for
which Purchaser is obligated thereunder.
Neither Seller nor Purchaser may claim termination
of this Agreement or pursue any other remedy referred
to in this Agreement 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 shall be postponed to the
first day of the next calendar month if necessary to
afford such opportunity to cure. In any event, unless
the parties hereto agree otherwise, postponement of
closing to the first day of the next calendar month
shall be granted only once. Notwithstanding the
foregoing or anything to the contrary herein, no such
notice or opportunity to cure shall be required with
respect to any failure by Purchaser to pay or perform
its obligations under the Note as and when due
thereunder, and any such failure immediately shall
constitute a default by Purchaser under this Agreement
entitling Seller to all of the rights and remedies
specified herein and in the Note.
(b) Seller's Remedies. In the event of the
termination of this Agreement by Seller as provided in
this Agreement, neither party shall have any further
rights or remedies hereunder, other than Purchaser's
right to secure the return of the Deposit and any
accrued interest thereon, except that in the event of a
material breach by Purchaser of its obligations
hereunder, Seller shall be entitled at Seller's
election either (i) to terminate this Agreement and
retain Purchaser's Deposit and collect from Purchaser
an additional One Hundred Thousand Dollars
($100,000.00), for a total of One Hundred Fifty
Thousand Dollars ($ I 50,000.00), plus any and all
costs and expenses of enforcement hereof, as liquidated
damages, the parties acknowledging and agreeing that
the amount of damages which Seller may incur as a
result of Purchaser's breach may be difficult or
impossible to ascertain and that such liquidated
damages amount is a reasonable and fair estimate
thereof, or (ii) to seek specific performance of
Purchaser's obligations hereunder.
(c) Purchaser's Remedies. In the event of the
termination of this Agreement by Purchaser as provided
in this Agreement, neither party shall have any further
rights or remedies hereunder, other than Purchaser's
right to secure the return of the Deposit and any
accrued interest thereon, except that in the event of a
material breach by Seller of its obligations hereunder,
Purchaser shall be entitled at Purchaser's election
either (i) to terminate this Agreement and receive a
refund of the Deposit and collect from Seller the sum
of One Hundred Fifty Thousand Dollars ($ 150,000.00),
plus any and all costs and expenses of enforcement
hereof, as liquidated damages, the parties
acknowledging and agreeing that the amount of damages
which Purchaser may incur as a result of Seller' s
breach may be difficult or impossible to ascertain and
that such liquidated damages amount is a reasonable
and. fair estimate thereof, or (ii) seek specific
performance of Seller's obligations hereunder.
Notwithstanding the foregoing, if Purchaser terminates
this Agreement
15
pursuant to Paragraph 15(a)(iii) above due to Seller's
failure to obtain Meditrust's consent to the
transactions contemplated by this Agreement, Seller
shall reimburse Purchaser for all reasonable expenses
reasonably incurred by Purchaser for the purpose of
consummating the transaction contemplated by this
Agreement, within thirty (30) days after Purchaser
provides to Seller such documentation relating to any
such expenses as may reasonably be required by Seller.
Purchaser's demand for such payment and all such
documentation shall be delivered to Seller within one
year after the date hereof, as a condition to Seller's
obligation to reimburse Purchaser.
16. Operational Issues
(a) At the Closing, Seller shall deliver to
Purchaser (i) a schedule which reflects all earned
vacation and sick pay due to and/or coming due to the
Facility employees for periods prior to the Closing
Date (the "Benefits Schedule"), and (ii) an amount
equal to fifty percent (50"%) of the earned vacation
and sick pay reflected on the Benefits Schedule (or
Purchaser shall receive a credit therefor against the
Purchase Price due at Closing). Purchaser agrees to pay
the amounts reflected on the Benefits Schedule to the
Facility employees as and when due in accordance with
Seller's personnel policies prior to the Closing Date
and Purchaser's personnel policies from and after the
Closing Date, it being understood and agreed that the
Facility employee are and shall be the employees of
Purchaser from and after the Closing Date.
(b) Purchaser shall retain as Purchaser's
employees at the Facility substantially all of the
Facility employees who, as of the Closing Date and have
been employed on average for 20 hours or more per week.
Such employees whose employment is continued shall be
referred to as the "Retained Employees." Any such
continued employment of a Retained Employee by
Purchaser shall be on terms which require said Retained
Employee to perform comparable services, in a
comparable position and at substantially the same base
salary as such Retained Employee enjoyed with the
Seller prior to Closing. The Retained Employees who
elect to accept continued employment with Purchaser
shall hereinafter be referred to as the "Hired
Employees" and as to each of the Hired Employees,
Purchaser shall recognize each such Hired Employees
original hire date and shall continue to employ each
such Hired Employee for a period of no less than ninety
(90) days following the Closing Date unless the
employment of such Hired Employee is terminated in
accordance with Purchaser's personnel policies or as a
result of such Hired Employee's resignation. Seller and
Purchaser acknowledge and agree that the provisions of
this paragraph are designed solely to ensure that
Seller is not required to give notice to the Facility
employees of the "closure" thereof under the Worker
Adjustment and Retraining Notification Act (the "WARN
Act") or under any comparable state law. Accordingly,
Purchaser agrees to indemnify, defend and hold harmless
Seller from any liability which it may incur under the
WARN Act or under comparable state law in the event of
a violation by Purchaser of its obligations thereunder,
including a violation which results from allegations
that Purchaser constructively terminated the Facility
employees as a result of the terms and conditions of
employment offered by Purchaser; provided, however,
that nothing herein shall be construed as imposing any
obligation on Purchaser to indemnify, defend or hold
harmless Seller from any liability which it may incur
under the WARN Act as a result of the acts or omissions
of Seller prior to the Closing Date, including any
liability which may result from the aggregation of the
acts of Seller prior to the Closing Date and the acts
of Purchaser after the Closing Date, it being
understood and agreed that Purchaser shall only be
liable for its own acts or omissions after the Closing
Date. Nothing in Section shall, however, create any
rights in favor of any person not a party hereto,
including the Facility employees, or constitute an
employment agreement or condition of employment for any
employee of Seller or any affiliate of Seller who is a
Retained Employee or a Hired Employee, and nothing in
this Section shall apply to the termination of the
employment of any Retained Employee who is terminated
for cause.
16
(c) At Closing, Seller shall provide Purchaser
with an accounting of all resident security deposits
being held by Seller as of the Closing Date (the
"Resident Deposits"). Such accounting shall set forth
the names of the residents or prospective residents for
whom such funds are held, the amounts held on behalf of
each resident or prospective resident and the Seller's
warranty that the accounting is true, correct and
complete.
(d) On the Closing Date, Seller shall transfer
the Resident Deposits to the bank
account designated by the Purchaser, and Purchaser
shall acknowledge in writing to Seller receipt of and
expressly assume all Seller's financial and custodial
obligations with respect thereto, it being the intent
and purpose of this provision that, at Closing, Seller
will be relieved of all fiduciary and custodial
obligations, and that Purchaser will assume all such
obligations and be directly accountable to the
residents and prospective residents of the Facility,
with respect thereto.
(e) Notwithstanding the foregoing, Seller will
indemnify and hold Purchaser harmless from all
liabilities, claims and demands in the event the amount
of the Resident Deposits transferred to the Purchaser's
bank account as provided in this Paragraph 16 did not
represent the full amount of such Resident Deposits
then or thereafter shown to have been delivered to
Seller by the current residents or prospective
residents of the Facility.
17. 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, to the following
address:
To Seller: Emeritus Properties I,
Inc.
0000 Xxxxxxx Xxxxxx, Xxxxx
000
Xxxxxxx, XX 00000
Facsimile: 000-000-0000
with a copy to: Xxxxx X.
Xxxxxxx
The Xxxxxxxxx Group
PLLC
0000 Xxxxxx Xxxxxx,
Xxxxx 000
Xxxxxxx, XX 00000
Facsimile: 206-623-1738
To Purchaser: Xxx Xxxxxx, President
Bayside Health Group LLC
0000 Xxxxxxxx Xxxxx XX
Xxx Xxxxxx, XX 00000
Facsimile: 000-000-0000
with a copy to:
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.
18. Sole Agreement
17
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 negotiations,
discussions;. writings and agreements between them.
19. Successors
The terms of this Agreement shall be binding upon
and inure to the benefit of and be enforceable by and
against the heirs, successors and assigns of the
parties hereto; provided, however, that Purchaser shall
not have the right to assign its rights and obligations
hereunder without the prior consent of Seller (which
consent will not be unreasonably withheld), except to a
person or entity controlling, controlled by or under
common control with the Purchaser.
20. 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.
21. Survival
The representations and warranties of Seller and
Purchaser set forth herein shall survive the Closing
for a period of one year after the Closing.
22. Governing Law: Jurisdiction and Venue
THE PARTIES AGREE THAT, TO THE MAXIMUM EXTENT
PERMITTED BY LAW, THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS AND
DECISIONS OF THE STATE OF WASHINGTON (WITHOUT REGARD
FOR ITS CONFLICTS OF LAW PRINCIPLES). SELLER AND
PURCHASER HEREBY AGREE THAT ALL ACTIONS OR PROCEEDINGS
ARISING DIRECTLY OR INDIRECTLY OUT OF THIS AGREEMENT
SHALL BE LITIGATED IN ANY STATE OR FEDERAL COURT HAVING
JURISDICTION LOCATED IN THE CITY OF SEATTLE, STATE OF
WASHINGTON, UNLESS SUCH ACTIONS OR PROCEEDINGS ARE
REQUIRED BY LAW TO BE BROUGHT ELSEWHERE. PURCHASER
HEREBY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO
SUCH JURISDICTION IN ANY ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT, AND PURCHASER WAIVES ANY CLAIM THAT
ANY SUCH COURT IS AN INCONVENIENT FORUM OR AN IMPROPER
FORUM BASED ON LACK OF VENUE.
23. 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 or
enforceability of the remaining provisions hereof shall
not in any way be affected or impaired thereby.
24. 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.
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25. Confidentiality
In the event the transaction contemplated by this
Agreement fails to close for any reason, Purchaser and
Seller agree to keep confidential any proprietary
information disclosed to them by the other party during
the course of this transaction.
26. Internal Revenue Service Reporting
Prior to the Closing, Seller shall furnish
Purchaser and to the Escrow Agent Sellers affidavit,
under penalty of perjury, which shall include Seller's
United States taxpayer identification number, stating
that Seller is not a foreign person under Section 1445
of the Internal Revenue Code and the Regulations
thereunder.
27. Construction
Each party acknowledges and agrees that it has
participated in the drafting and the
negotiation of this Agreement and has been represented
by counsel during the course thereof. Accordingly, in
the event of a dispute with respect to the
interpretation or enforcement of the terms hereof, no
provision shall be construed so as to favor or disfavor
either party hereto.
28. Attorneys' Fees
In the event of litigation or other proceedings
involving the parties to this Agreement to enforce any
provision of this Agreement, to enforce any remedy
available upon default under this Agreement, or seeking
a declaration of the rights of either party under this
Agreement, the prevailing party shall be entitled to
recover from the other such reasonable attorneys' fees
and costs as may be actually incurred, including its
costs and fees on appeal.
29. Waiver of Jury Trial
EACH OF THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY
AND : INTENTIONALLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY IN ANY
LEGAL ACTION BROUGHT ON OR WITH RESPECT TO THIS
AGREEMENT, INCLUDING TO ENFORCE OR DEFEND ANY RIGHTS
HEREUNDER AND AGREES THAT ANY SUCH ACTION SHALL BE
TRIED BEFORE A COURT AND NOT BEFORE A JURY.
30. Calculation of Time Periods
Unless otherwise specified, in computing any
period of time described herein, the day of the act or
event on which the designated period of time begins to
run shall not be included and the last day of the
period so. computed shall be included, unless such last
day is a Saturday, Sunday or legal holiday, in which
event the period shall run until the next day which is
not a Saturday, Sunday or a legal holiday.
31. Expenses
Except as otherwise specifically provided herein,
each party shall bear its own costs and expenses
(including legal fees and expenses) incurred in
connection with this Agreement and the
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transactions contemplated hereby.
32. Third Party Beneficiary
Nothing in this Agreement express or implied is
intended to and shall not be construed to confer upon
or create in any person (other than the parties hereto)
any rights or remedies under or by reason of this
Agreement, including without limitation, any right to
enforce this Agreement.
33. Radon Gas.
RADON IS A NATURALLY OCCURRING RADIOACTIVE GAS
THAT, WHEN IT HAS ACCUMULATED IN A BUILDING IN
SUFFICIENT QUANTITIES, MAY PRESENT HEALTH RISKS TO
PERSONS WHO ARE EXPOSED TO IT OVER TIME. LEVELS OF
RADON THAT EXCEED FEDERAL AND STATE GUIDELINES HAVE
BEEN FOUND IN BUILDINGS IN FLORIDA. ADDITIONAL
INFORMATION REGARDING RADON AND RADON TESTING MAY BE
OBTAINED FROM YOUR COUNTY PUBLIC HEALTH UNIT.
[SIGNATURES ON THE FOLLOWING PAGE)
IN WITNESS WHEREOF, the parties hereby execute
this Agreement as of the day and year first written
above.
SELLER: EMERITUS PROPERTIES I,
INC.
By: /s/ Xxxxx X. Xxxxx
-------------------------------------------
Its: Vice President of
Finance
PURCHASER: BAYSIDE HEALTH GROUP LLC
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Its: President
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