EXHIBIT 10.1
FORM OF
FORMATION AGREEMENT
THIS FORMATION AGREEMENT (this "Agreement") is made and entered into as of
the _____ day of April, 1997 by and among (i) BROOKDALE LIVING COMMUNITIES,
INC., a Delaware corporation (the "Corporation"), (ii) BROOKDALE HOLDINGS, INC.,
a Delaware corporation ("Holdings"), (iii) XXXX X. XXXXXXX ("Xxxxxxx"), (iv) THE
PRIME GROUP, INC., an Illinois corporation ("PGI"), and (v) PRIME GROUP LIMITED
PARTNERSHIP, an Illinois limited partnership ("PGLP").
RECITALS:
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A. The Corporation is a recently organized corporation formed for the
purpose of, among other things, acquiring substantially all of the senior and
assisted living business and operations of the senior housing division of PGI
and its affiliates, including all ownership interests of PGI and PGLP in BLC
Property, Inc., a Delaware corporation ("Property"), River Oaks Partners, an
Illinois general partnership ("River Oaks"), and The Ponds of Pembroke Limited
Partnership, an Illinois limited partnership ("Pembroke") (Property, River Oaks
and Pembroke being hereinafter referred to collectively as the "Contributed
Entities" and River Oaks and Pembroke being hereinafter referred to together as
the "Partnerships") together with all other interests of PGI and PGLP in and to
each of the businesses and facilities operated and owned by the Contributed
Entities (all of such ownership interests in the Contributed Entities and all of
such other assets being together referred to herein as the "Contributed
Projects").
X. Xxxxxxx, PGI and PGLP (collectively, the "Transferors") desire to
convey all of their respective right, title and interest in and to the
Contributed Projects and the operations relating thereto to the Corporation in
connection with an initial public offering (the "Offering") of shares of the
Corporation's common stock, par value $0.01 per share (the "Common Stock").
X. Xxxxxxx desires to convey certain of his respective right, title and
interest in and to The Island on Lake Xxxxxx facility in Lago Vista, Texas ("The
Island Facility") to the Corporation in connection with the Offering of Common
Stock.
D. The Corporation has agreed with PGI to terminate the right, title and
interest in and to The Island Facility, conveyed to it by Xxxxxxx, and has
agreed to cause Xxxxxxx, as a condition of his employment by the Corporation, to
pay or reimburse PGI or its affiliate for three percent (3.0%) of any negative
cash flow incurred or realized by PGI or any affiliate of PGI by or from the
operation of The Island Facility.
E. PGI has entered into an agreement (the "Xxxxxx Agreement") with KILICO
Realty Corporation and Xxxxxx Investors Life Insurance Company (collectively,
the "Xxxxxx
Transferors") pursuant to which the Xxxxxx Transferors have agreed to convey
certain interests in River Oaks and Pembroke to PGI or its designee or assignee.
[F. PGI has agreed to contribute to Holdings a 1% interest in each of River
Oaks and Pembroke in return for 100% of Holdings stock.]
G. PGI has agreed to convey and assign to the Corporation PGI's rights to
receive certain partnership interests as hereinafter described from the Xxxxxx
Transferors, and the Corporation has agreed to assume PGI's obligation to pay
the purchase price therefor as set forth in the Xxxxxx Agreement.
H. PGI has entered into certain real estate purchase agreements with (i)
Hawthorn Lakes Associates dated as of September 16, 1996, (ii) Edina Park Plaza
Associates Limited Partnership dated as of September 16, 1996 and (iii) Park
Place General Partnership and Park Place II, L.L.C. dated as of February 20,
1997 (collectively, such purchase agreements are referred to herein as the
"Facility Acquisition Agreements" and the parties thereto other than PGI are
referred to herein as the "Facility Transferors") for the purchase of certain
senior and assisted living facilities owned by the Facility Transferors.
I. PGI has agreed to convey and assign to the Corporation or its designee
all of PGI's rights under the Facility Acquisition Agreements and the
Corporation has agreed to assume PGI's obligations under the Facility
Acquisition Agreements.
J. PGI has entered into certain real estate purchase agreement with (i)
certain trusts and the direct and indirect beneficiaries thereof with respect to
a development site located in Glen Ellyn, Illinois dated as of February 24,
1997, (ii) AC Properties, L.L.C. dated as of February 14, 1997 and (iii) VG
Office Partnership '95, Ltd. dated February 21, 1997, as amended (collectively,
such purchase agreements are referred to herein as the "Development Site
Acquisition Agreements" and the parties thereto other than PGI are referred to
herein as the "Development Site Transferors") for the purchase of certain
parcels of real estate owned by the Development Site Transferors.
K. PGI has agreed to convey and assign to the Corporation or its designee
all of PGI's rights under the Development Site Acquisition Agreements and the
Corporation has agreed to assume PGI's obligations under the Development Site
Acquisition Agreements.
L. The parties desire to enter into this Agreement to set forth their
understanding with respect to the manner in which the Corporation (or its
designee) will acquire interests in the Contributed Projects, the operations
relating thereto and the rights of PGI in the Xxxxxx Agreement, the Facility
Acquisition Agreements and the Development Site Acquisition Agreements in
exchange for shares of Common Stock, cash and the assumption of certain
liabilities.
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AGREEMENT:
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NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto hereby agree as follows:
1. TRANSFER OF CONTRIBUTED PROJECTS AND CERTAIN OTHER ASSETS. As part
of a single plan, on the Closing Date (as hereinafter defined) the Transferors
will convey (x) the Contributed Projects together with (y) the rights of Prime
in the Xxxxxx Agreement, the Facility Acquisition Agreements and the Development
Site Acquisition Agreements, to the Corporation or its designee in connection
with the Corporation's initial public offering, in consideration for the
issuance by the Corporation of its Common Stock to the Transferors as provided
in Section 3, the assumption by the Corporation and Holdings of the liabilities
associated with the Contributed Projects referred to in Section 4 and the cash
payments referred to in Section 4, all in a transaction designed to meet the
requirements of section 351(a) of the Code.
(a) PGI shall transfer to Holdings a 1% general partnership interest
in River Oaks and a 1% general partnership interest in Pembroke.
(b) PGI shall transfer to the Corporation the following:
(i) A 49% general partnership interest in River Oaks.
(ii) A 24% general partnership interest in Pembroke.
(iii) Its rights under the Xxxxxx Agreement, including its rights
to purchase the following partnership interests from the Xxxxxx Transferors
pursuant to the Xxxxxx Agreement:
(A) A 50% general partnership interest in River Oaks.
(B) A 25% limited partnership interest and a 50% general
partnership interest in Pembroke.
(iv) All of its rights and interests in the Facility Acquisition
Agreements and the Development Site Acquisition Agreements.
(v) All of its interests in all other assets and properties of
the senior housing division of PGI and its affiliates, as more fully described
in Exhibit A hereto.
(vi) All of its stock in Holdings.
(c) Xxxxxxx shall transfer to the Corporation all of the remaining
right, title and interest in and to the Contributed Entities, the Contributed
Projects and the senior and assisted living business and operations of the
senior housing division of PGI and its affiliates held by Xxxxxxx pursuant to
that certain Employment and Equity Participation Agreement, dated
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___________, 1997 (the "Employment and Equity Participation Agreement"), between
Xxxxxxx and PGI (which agreement supersedes that certain Compensation Agreement
dated September 13, 1995 between Xxxxxxx and PGI).
(d) In conjunction with the transfers described in clauses (a), (b)
and (c) of this Section 1,
(i) Xxxxxxx shall transfer to the Corporation all of the
remaining right, title and interest to The Island Facility pursuant to the
Employment and Equity Participation Agreement; and
(ii) The Corporation hereby terminates and waives any and all
right, title and interest to The Island Facility received pursuant to clause (i)
of this Section 1(d), and all agreements and arrangements representing such
interest shall have no further force or effect.
2. CERTAIN DISTRIBUTIONS. On or prior to the Closing Date, the
Transferors shall have the right to receive distributions from the Partnerships,
net of all advances to PGI by the Partnerships, provided, that at the time of
the Closing (as defined below), the Partnerships shall have unrestricted cash in
the aggregate amount of not less than $800,000 after giving effect to such
distributions. Within forty-five (45) days following the Closing Date, the
Corporation shall deliver to the Transferors an accounting prepared by its
independent accountants showing the actual computation of unrestricted cash of
the Corporation as of the Closing Date following the distribution described in
the first sentence of this Section 2, and, within ten days of receipt of such
accounting, either (a) the Transferor shall pay to the Corporation a sum equal
to the amount, if any, by which $800,000 exceeds the amount of unrestricted cash
shown on such accounting or (b) the Corporation shall pay, or cause one or more
of River Oaks or Pembroke to pay, to the Transferors an aggregate sum equal to
the amount, if any, by which the amount of unrestricted cash shown on such
accounting exceeds $800,000. In addition to any distributions made to PGI
pursuant to the first sentence of this Section 2, the Xxxxxxx Money (as defined
in the Xxxxxx Agreement) under the Xxxxxx Agreement shall be returned to PGI
(or, if the Xxxxxxx Money is credited against the purchase price payable to the
Xxxxxx Transferors, the Corporation shall reimburse PGI for such purchase money)
and PGI shall be entitled to reimbursement from the Corporation of all sums
delivered by PGI to the Facility Transferors under Facility Acquisition
Agreements and the Development Site Acquisition Agreements as a deposit,
prepayment or xxxxxxx money.
3. ISSUANCE OF COMMON STOCK. In consideration of the transfer of the
assets provided for in Section 1, on the Closing Date, the Corporation shall
issue an aggregate of 2,078,000 shares of its Common Stock to PGI and PGLP
[(100,000 shares of which PGI has agreed to transfer and assign to Xxxxxx X.
Xxxxxxxx, Xx. pursuant to the terms, and subject to the conditions, of that
certain Employment Agreement dated as of the date hereof by and among the
Corporation, Xxxxxx X. Xxxxxxxx, Xx. and PGI)], and 322,000 shares of its Common
Stock to Xxxxxxx. All such shares of Common Stock shall be fully paid and
nonassessable.
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4. ASSUMPTION OF LIABILITIES; CERTAIN PAYMENTS.
(a) As partial consideration for the transfer of the assets by the
Transferors to the Corporation as provided for in Section 1, on the Closing Date
the Corporation and Holdings will enter into an Assignment and Assumption
Agreement substantially in the form of Exhibit A pursuant to which the
Corporation shall assume all of the outstanding liabilities of each Transferor
with respect to the assets being transferred (including the assets and
operations of River Oaks and Pembroke and the operations of the senior housing
division of PGI) and pursuant to which Holdings will assume certain liabilities
relating to the Partnerships, whether or not reflected on the books and records
of the Transferors or the entity whose ownership is being transferred, and
whether known or unknown, accrued or unaccrued, absolute, contingent or
otherwise.
(b) In addition, on the Closing Date, the Corporation will make cash
payments as described in Schedule 1 to this Agreement which payments shall be in
complete satisfaction of the recipients' obligations hereunder in respect of the
Transferors' right, title and interest in the Contributed Projects and each of
the Partnerships, including reimbursement to PGI of all costs and expenses
incurred by PGI in connection with the Offering and the transactions
contemplated thereby.
(c) On or prior to the Closing Date, the Corporation will pay
directly, or will reimburse PGI for the payment of, all expenses incurred in
connection with the Offering and the transactions contemplated thereby.
5. CLOSING DATE. The closing of the transactions contemplated by this
Agreement (the "Closing") shall occur on the day (the "Closing Date")
immediately following the day that all of the conditions precedent of the
Transferors and the Corporation under this Agreement have been met or waived by
the party entitled to the benefit thereof, but in any event no later than the
date of closing of the Offering.
6. REPRESENTATIONS AND WARRANTIES.
(a) Each of PGI and PGLP hereby represents and warrants to the
Corporation and Holdings as follows:
(i) It is a corporation or limited partnership duly organized
and validly existing under the laws of its jurisdiction of organization.
(ii) It has the full corporate or partnership power and authority
to execute and deliver this Agreement and to consummate the transactions
contemplated hereby.
(iii) This Agreement constitutes its valid and legally binding
obligation, enforceable against it in accordance with its terms.
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(iv) It owns the partnership interests and other assets to be
transferred by it to the Corporation pursuant to the terms of this Agreement
free and clear of all liens and encumbrances, other than restrictions contained
in the partnership agreement with respect to a particular Partnership.
(v) Each of the Partnerships is duly organized and validly existing.
(vi) The Contributed Projects have been operated in the ordinary
course since December 31, 1996.
(b) Xxxxxxx hereby represents and warrants to the Corporation and Holdings
as follows:
(i) This Agreement constitutes his valid and legally binding
obligation, enforceable against him in accordance with its terms.
(ii) He owns the interests to be transferred by him to the
Corporation pursuant to the terms of this Agreement free and clear of all liens
and encumbrances.
(c) Except as specifically warranted in Sections 6(a) and 6(b), the
Transferors make no representations and warranties to the Corporation or
Holdings whatsoever regarding the Contributed Projects, the assets or properties
to be acquired under the Facility Acquisition Agreements and the Development
Site Acquisition Agreements, or the assets of the Contributed Entities,
including, but not limited to, the warranty of merchantability or fitness for a
particular use, which is specifically disclaimed. The Corporation acknowledges
that all of the assets to be conveyed by the Transferors to the Corporation (and
all of the assets of the Contributed Entities) will be conveyed "as is, where
is." Transferors make no representation or warranty with respect to any asset
which is the subject of any of the Facility Acquisition Agreements or the
Development Site Acquisition Agreements.
(d) Each of the Corporation and Holdings hereby represents, warrants and
covenants with and to the Transferors as follows:
(i) It is a corporation duly organized and validly existing under
the laws of the State of Delaware.
(ii) It has the full corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
(iii) This Agreement constitutes its valid and legally binding
obligation, enforceable against it in accordance with its terms.
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(e) The Corporation hereby represents, warrants and covenants with and to
the Transferors as follows:
(i) The Common Stock to be issued by the Corporation to the
Transferors pursuant to the terms of this Agreement will be duly authorized,
fully paid and nonassessable.
(ii) The Corporation will not take any action which would cause the
transfers provided for in Section 1 not to qualify for tax-free treatment under
section 351 of the Code.
(iii) On the Closing Date, the Corporation will hire all of the
employees of the Transferors associated with the Contributed Projects and will
assume all liabilities and obligations to or with respect to such employees,
including any accrued but unpaid benefits, bonuses and vacation pay.
(f) All of the representations and warranties provided for in this Section
6 shall survive the Closing Date and the delivery of the closing documents on
the Closing Date.
7. CONDITIONS PRECEDENT.
(a) The obligation of the Transferors to consummate the transactions
contemplated hereby is subject to the satisfaction of the following conditions
(any of which may be waived by the Transferors in writing):
(i) All the terms, covenants and conditions of this Agreement to be
complied with and performed by the Corporation and Holdings on or before the
Closing Date shall have been fully complied with and performed in all respects.
(ii) All the representations and warranties made by the Corporation
and Holdings herein shall be true and correct in all material respects on and as
of the Closing Date.
(iii) All consents required for the valid and effective transfer of
the assets to be transferred in accordance with Section 1 shall have been
obtained and the consent to the assumption by the Corporation of the debts to be
assumed by the Corporation and Holdings pursuant to Section 4 shall have been
obtained, except for any approvals and consents described in Schedule 2 to this
Agreement.
(iv) There shall be no pending or threatened litigation against any
of the parties hereto concerning or relating to the transactions contemplated
hereby.
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(v) The approval of all administrative agencies, if any, whose
approval of the transactions contemplated hereby is necessary or desirable shall
have been obtained.
(vi) Each of the transactions contemplated by the Xxxxxx Agreement
shall close at or prior to the time of Closing of the transactions contemplated
hereby.
(vii) PGI and the Corporation shall have entered into a Space Sharing
Agreement substantially in the form of Exhibit B attached hereto and made a part
hereof.
(viii) The Corporation, PGI and PGLP shall have entered into a
Registration Rights Agreement substantially in the form of Exhibit C attached
hereto and made a part hereof.
(ix) The Corporation, PGLP, Xxxxxxx X. Xxxxxxx and PGI shall have
entered into a Non-Compete Agreement substantially in the form of Exhibit D
attached hereto and made a part hereof.
(x) PGI, PGLP and the Corporation shall have entered into a Voting
Agreement substantially in the form of Exhibit E attached hereto and made a part
hereof.
(xi) The Corporation and The Island on Lake Xxxxxx, Ltd., an
affiliate of PGI, shall have entered into a Management Agreement substantially
in the form of Exhibit F attached hereto and made a part hereof.
(xii) PGI and Xxxxxxx shall have entered into an Indemnity
Agreement substantially in the form of Exhibit G attached hereto and made a part
hereof.
(b) The obligations of the Corporation and Holdings to consummate the
transactions contemplated hereby are subject to the satisfaction of the
following conditions (any of which may be waived by the Corporation and Holdings
in writing):
(i) All the terms, covenants and conditions of this Agreement to be
complied with and performed by the Transferors on or before the Closing Date
shall have been fully complied with and performed in all respects.
(ii) All the representations and warranties made by the Transferors
herein shall be true and correct in all material respects on and as of the
Closing Date.
(iii) All required consents necessary for the valid and
effective transfer of the assets to be transferred to the Corporation in
accordance with the provisions of
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Section 1 shall have been obtained, except for any approvals and consents
described in Schedule 2 to this Agreement.
(iv) The Corporation shall have obtained title insurance (or
endorsed commitment) insuring that all real property owned by the Contributed
Entities, are vested in the respective entities free and clear of all mortgages,
liens and encumbrances except those reasonably acceptable to the Corporation.
(v) The conditions referred to in Sections 7(a)(iv) through
7(a)(xii) shall have been complied with or otherwise satisfied.
8. INDEMNIFICATION
(a) Each Transferor hereby agrees to indemnify the Corporation and
Holdings for, and to hold the Corporation and Holdings harmless from, the
following:
(i) Any and all liabilities, damages, losses, costs or
deficiencies resulting from any misrepresentation, breach of any warranty or
nonfulfillment of any agreement or covenant on the part of that Transferor,
whether contained in this Agreement or in any document furnished in connection
with the transactions contemplated hereby; and
(ii) Any and all actions, suits, proceedings, demands,
assessments, judgments, costs and expenses incident to the foregoing, including
reasonable attorney's fees.
(b) Each of the Corporation and Holdings hereby agrees to indemnify
each Transferor for, and to hold each Transferor harmless from, the following:
(i) Any and all indebtedness, lease, contract or other
liabilities and obligations assumed by the Corporation and Holdings in
accordance with the terms hereof;
(ii) Any and all liabilities, losses, costs, damages or
deficiencies resulting from any misrepresentations, breach of any warranty or
nonfulfillment of any agreement or covenant on the part of the Corporation or
Holdings, whether contained in this Agreement or in any document furnished in
connection with the transactions contemplated hereby;
(iii) Any and all liabilities, damages, losses, costs or
deficiencies resulting from any act or circumstance relating to any of the
assets transferred (including the assets and operations of the Contributed
Entities and operations of PGI's senior housing division) whenever occurring;
(iv) Any loss, claim, damage, or liability, including any
loss, claim, damage, or liability under the Securities Act of 1933, as amended,
or any applicable state
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securities laws, arising out of, or attributable to the Offering, except for
losses, claims, damages or liabilities arising from the inaccuracy of
information supplied in writing by PGI for inclusion in the prospectus relating
to the Offering; and
(v) Any and all actions, suits, proceedings, demands, assessments,
judgments, costs and expenses incident to any of the foregoing, including
reasonable attorneys' fees.
(c) Any party seeking indemnification ("Indemnitee") pursuant to this
Section 8 shall promptly (within 20 days of service to the Indemnitee if a third
party has commenced actual litigation against the Indemnitee) give written
notice to the party from which indemnification is sought ("Indemnitor") after
the Indemnitee has knowledge of any claim against the Indemnitor as to which
recovery may be sought against the Indemnitee pursuant to this Section 8, or of
the commencement of any legal proceedings against the Indemnitee as to such
claim after the Indemnitee has knowledge of such proceedings, whichever shall
first occur, and shall permit the Indemnitor to assume the defense of any such
claim or any litigation resulting from such claim. Such notice shall specify in
reasonable detail the facts known to the Indemnitee giving rise to such
indemnification rights and, if possible, an estimate of the amount of liability
which could result therefrom. The right of the Indemnitee to indemnification
hereunder shall be deemed agreed to unless, within ten days after the receipt of
such notice, the Indemnitee is notified in writing by the Indemnitor that it
disputes the right to indemnification as set forth in such notice. Failure by
the Indemnitor to notify the Indemnitee of the Indemnitor's election to defend
such action within ten days after notice thereof shall have been given to the
Indemnitor, or failure to deliver notification to the Indemnitee by the
Indemnitor that the Indemnitee's right to indemnification is being disputed,
shall be deemed an acknowledgment by Indemnitor that Indemnitee is entitled to
indemnification hereunder and shall be deemed to be an election by Indemnitor to
defend such action. The Indemnitor shall not, in the defense of such claim or
any litigation resulting therefrom, consent to entry of any judgment (except
with the consent of the Indemnitee) or enter into any settlement (except with
the consent of the Indemnitee) which does not include as an unconditional term
thereof the giving by the claimant or the plaintiff to the Indemnitee of a full,
absolute and unconditional release from all liability in respect of such claim
or litigation.
(d) If the Indemnitor shall not assume the defense of any such claim
or litigation resulting therefrom, the Indemnitee may defend against such claim
or litigation in such manner as it may deem appropriate. The Indemnitee may
settle such claim or litigation on such terms as it may deem appropriate and the
Indemnitor shall promptly reimburse the Indemnitee for the amount of such
settlement, and all expenses, legal or otherwise, incurred by the Indemnitee in
connection with the defense against, or settlement of, such claim or litigation.
If no settlement of such claim or litigation is made, the Indemnitor shall
promptly reimburse the Indemnitee for the amount of any judgment rendered with
respect to such claim or in such litigation, and of all expenses, legal or
otherwise, incurred by the Indemnitee in the defense against such claim or
litigation. Notwithstanding the foregoing, if the Indemnitor has disputed the
Indemnitee's right to indemnification in accordance with the provisions of
Section 8(c), the
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Indemnitor shall not be obligated to pay the Indemnitee the amount provided for
in this Section 8(d) until such dispute has been resolved and it has been
determined that the Indemnitor is required to make such indemnification payment.
(e) The right of any party to seek indemnification hereunder shall
expire as to any claim not made on or prior to the first anniversary of the
Closing whether or not the basis for any such claim was known on such date.
9. MISCELLANEOUS.
(a) Each of the parties hereto hereby covenants and agrees that
subsequent to the Closing Date they will, at any time, and from time to time,
upon the request and at the expense of the Corporation, do, acknowledge and
deliver, or cause to be done, executed, acknowledged and delivered, all such
further acts, deeds, assignments, transfers, conveyances, powers of attorney and
assurances as may reasonably be required to fully effectuate the transactions
contemplated by this Agreement. Each of the Transferors and Xxxxxxx hereby
constitutes and appoints the Corporation as its true and lawful attorney-in-
fact, with full power of substitution, to collect for the account of the
Corporation or Holdings, as applicable, any receivables and other items conveyed
to the Corporation or Holdings, as applicable, pursuant to the provisions of
Section 1, to endorse in the name of the Transferor, the Corporation or
Holdings, or any of them, any check received on account of any receivable, claim
or other item, to institute and prosecute in the name of a Transferor or
otherwise, any and all proceedings which the Corporation or Holdings may deem
proper in order to collect, assert or enforce any claim, right or title of any
kind in and to any of such transferred assets.
(b) All notices, requests, demands or other communications required
or permitted under this Agreement shall be in writing and be personally
delivered against a written receipt, delivered to a reputable messenger service
(such as FedEx, DHL Courier, United Parcel Service, etc.) for overnight
delivery, transmitted by confirmed telephonic facsimile (fax) or transmitted by
mail, registered, express or certified, return receipt requested, postage
prepaid, addressed as follows:
If to the Corporation or Holdings:
Brookdale Living Communities, Inc.
00 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: President
Fax: (000) 000-0000
With a copy to:
Winston & Xxxxxx
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00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx
Fax: (000) 000-0000
If to Xxxxxxx:
Xxxx X. Xxxxxxx
000 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Fax:
-------------------
If to PGI or PGLP:
c/o The Prime Group, Inc.
00 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
Fax: (000) 000-0000
With a copy to:
The Prime Group, Inc.
00 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx
Fax: (000) 000-0000
All notices, demands and requests shall be effective upon being properly
personally delivered, upon being delivered to a reputable messenger service,
upon transmission of a confirmed fax, or upon being deposited in the United
States mail in the manner provided in this Section 9. However, the time period
in which a response to any such notice, demand or request must be given shall
commence to run from the date of personal delivery, the date of delivery by a
reputable messenger service, the date on the confirmation of a fax, or the date
on the return receipt, as applicable. If any party refuses delivery, the notice,
demand or request shall be deemed received (i) one business day after personal
delivery of the notice, demand or request was attempted or the notice, demand or
request was delivered to a reputable messenger service or was transmitted by fax
or (ii) three business days after the notice, demand or request was deposited in
the United States mail.
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(c) This Agreement may be modified or amended from time to time only
by a written instrument executed by all of the parties hereto.
(d) Captions contained in this Agreement are inserted only as a
matter of convenience and reference, and in no way define, limit, extend or
describe the scope of this Agreement, or the intent of any provision hereof. All
references to Sections herein shall refer to Sections of this Agreement unless
the context clearly requires otherwise.
(e) This Agreement shall be binding upon, and inure to the benefit
of, the parties hereto and their respective successors and assigns.
(f) This Agreement shall be governed by, and construed in accordance
with, the internal laws of the State of Illinois without regard to its conflicts
of laws rules.
(g) This Agreement represents the entire agreement of the parties
hereto with respect to the subject matter hereof.
(h) This Agreement may be executed in counterparts which, taken
together, shall constitute one and the same instrument.
[signature page follows]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the day and year first above written.
CORPORATION AND HOLDINGS:
BROOKDALE LIVING COMMUNITIES, INC.
By:
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Name:
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Title:
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BROOKDALE HOLDINGS, INC.
By:
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Name:
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Title:
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TRANSFERORS:
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XXXX X. XXXXXXX
THE PRIME GROUP, INC.
By:
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Name:
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Title:
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PRIME GROUP LIMITED PARTNERSHIP
By:
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Xxxxxxx X. Xxxxxxx
Managing General Partner
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SCHEDULE 1
TO
FORMATION AGREEMENT
CERTAIN PAYMENTS
Amount Payee's Wire Instructions
------ -------------------------
[$ ] [PGI wire information]
[$ ] [KILICO/Xxxxxx wire information]
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SCHEDULE 2
TO
FORMATION AGREEMENT
POST-CLOSING CONSENTS
[to be supplied]
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EXHIBIT A
TO
FORMATION AGREEMENT
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT
FOR TRANSFER OF CONTRIBUTED ASSETS
-----------------------------------
FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which are
hereby acknowledged, XXXX X. XXXXXXX, THE PRIME GROUP, INC., an Illinois
corporation, and PRIME GROUP LIMITED PARTNERSHIP, an Illinois limited
partnership (collectively, "Assignors") do hereby assign, transfer and convey to
BROOKDALE LIVING COMMUNITIES, INC., a Delaware corporation (the "Corporation"),
and BROOKDALE HOLDINGS, INC., a Delaware corporation ("Holdings" and, together
with the Corporation, "Assignees"), the assets (collectively, the "Contributed
Assets") described on Schedule A attached hereto and made a part hereof,
together with any and all right, title and interest in any property, both real
and personal, to which the Contributed Assets relate and any other rights,
privileges and benefits appertaining thereto.
Assignees hereby (i) accept the assignment and transfer of the
Contributed Assets and expressly assume (but in the case of Holdings, only with
respect to the Contributed Assets consisting of the interests in the
Partnerships (as hereinafter defined) assigned, transferred and conveyed to
Holdings by Assignors) any and all duties, obligations and liabilities, whether
arising prior to or after the date hereof, with respect to the Contributed
Assets and the properties and assets owned by the Partnerships as further
described on Schedule A (collectively the "Assumed Obligations") and (ii) agree
to indemnify and hold harmless Assignors, and Assignors' respective partners,
directors, officers, employees and agents, and its and their respective heirs,
legal representatives, successors and assigns, from and against any liability,
demand, claim or action in relation to any and all duties, obligations and
liabilities so assumed (it being understood by the parties hereto that Holdings'
assumption of duties, obligations and liabilities is limited as set forth in
clause (i) of this sentence).
Assignors hereby certify that they have full power to make this
Assignment, that this Assignment is being made in compliance with applicable law
and agreements and that the Contributed Assets have not otherwise been conveyed,
sold, transferred, encumbered, pledged, hypothecated or assigned. Except as
expressly set forth herein, and except for warranties made by Assignors in that
certain Formation Agreement dated as of the date hereof (the "Formation
Agreement"), among Assignors and Assignees, this Assignment is made without
representation or warranty. All capitalized terms used in this Assignment and
any Exhibit or Schedule hereto without definition have the meanings assigned to
them in the Formation Agreement.
IN WITNESS WHEREOF, Assignors and Assignees have executed this
Assignment as of the _____ day of ____________, 1997.
ASSIGNORS:
-------------------------------------------
XXXX X. XXXXXXX
THE PRIME GROUP, INC., an Illinois corporation
By:
----------------------------------------
Name:
--------------------------------------
Its:
---------------------------------------
PRIME GROUP LIMITED PARTNERSHIP, an
Illinois limited partnership
By:
----------------------------------------
Xxxxxxx X. Xxxxxxx,
Managing General Partner
ASSIGNEES:
BROOKDALE LIVING COMMUNITIES, INC.,
a Delaware corporation
By:
----------------------------------
Name:
--------------------------------
Its:
---------------------------------
BROOKDALE HOLDINGS, INC., a Delaware
corporation
By:
----------------------------------
Name:
--------------------------------
Its:
---------------------------------
-2-
SCHEDULE A
TO ASSIGNMENT AND ASSUMPTION AGREEMENT
I. ASSUMED OBLIGATIONS
X. Xxxxxx Agreement
The obligation to pay the purchase price under the Xxxxxx Agreement.
B. Facility Acquisition Agreements and Development Site Acquisition
Agreements
All obligations of Assignors under the Facility Acquisition Agreements
and the Development Site Acquisition Agreements.
C. Current Liabilities
[to be supplied by PGI]
II. CONTRIBUTED ASSETS
All business assets of the Assignors which are used in connection with (i)
the ownership, operation and management of the Contributed Projects owned,
operated or managed prior to the dated hereof and (ii) the senior and
assisted living business of PGI's senior housing division (the "Assigned
Business"), including, without limitation, the following:
A. Partnership Interests
The interests in each of the Partnerships as specified in Section 1 of
the Formation Agreement.
B. Stock
All of the outstanding capital stock of each of (i) BLC Property,
Inc., a Delaware corporation, and (ii) [__________________________], a
[Delaware] corporation.
X. Xxxxxx Agreement
All of the rights of PGI under the Xxxxxx Agreement, including the
rights of PGI to purchase certain interests in River Oaks and Pembroke
under the Xxxxxx Agreement, as specified in Section 1 of the Formation
Agreement.
A-1
D. Facility Acquisition Agreements and the Development Site Acquisition
--------------------------------------------------------------------
Agreements
----------
All of the rights of PGI under the Facility Acquisition Agreements and
the Development Site Acquisition Agreements, including the rights of
PGI to purchase certain assets under the Facility Acquisition
Agreements and the Development Site Acquisition Agreements.
E. Machinery and Equipment
-----------------------
All machinery, equipment, office equipment, computers, supplies, tools
and other personal property, if any, owned or leased by Assignors and
used or held exclusively for use in connection with the Assigned
Business including, without limitation, all such items which are
located at the Assignors' offices at 00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxxx, 00000, and the items listed on Schedule 1 attached
hereto;
F. Furniture and Fixtures
----------------------
The furniture and fixtures, if any, owned by Assignors and used or
held for use exclusively in connection with the Assigned Business
including, without limitation, all such items which are located at the
Assignors' offices at 00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx,
Xxxxxxxx, 00000, and the items listed on Schedule 1 attached hereto;
G. Contract Rights
---------------
All of Assignors' right, title and interest, if any, in and to all
contracts, agreements, commitments and leases, whether oral or
written, exclusively related to the Assigned Business, including
without limitation, office facilities, machinery, equipment, furniture
and fixtures, and all licenses (to the extent each is assignable)
including, without limitation, any items listed on Schedule 1 attached
hereto;
H. Business Records
----------------
All business records necessary for the operation of the Assigned
Business, wherever located, including, without limitation, all rent
rolls, customer lists, sales records, customer files, account
histories, sales literature, promotion materials, personnel records,
operating papers, contracts, proprietary software, computer programs,
software products, data bases and data processing media and research
and development records, unless any of the foregoing shall be
prohibited by the terms of applicable vender licenses;
A-2
I. Trade Names and Intangibles
---------------------------
Those patents, service marks, copyrights, trademarks and trade names,
and applications therefor, if any, listed on Schedule 2 attached
hereto, and the goodwill associated therewith relating to the Assigned
Business;
J. Prepaids
--------
All of Assignors' prepaid expenses and deposits (if any);
K. Permits
-------
To the extent transferable or assignable to Assignees by operation of
law or with the consent or approval of, or notice to, or filing with,
the appropriate governmental agency or entity, all approvals,
authorizations, consents, licenses and other permits, if any, of or
from governmental agencies or entities required for the operation of
the Assigned Business and held for use by Assignors exclusively in
connection with the Assigned Business;
L. Receivables
-----------
All of Assignors' accounts receivable and notes receivable (if any)
exclusively relating to the Assigned Business;
M. Other Assets
------------
Except as specifically excluded on Schedule 3 attached hereto, all of
Assignors' other assets, properties, rights and claims, if any, which
are exclusively used or held for use or sale in connection with, or
appertain to, the Assigned Business, of every kind and description,
wherever located, tangible or intangible, vested or unvested,
contingent or otherwise, whether or not specifically enumerated or
identified herein and whether or not carried or reflected on the books
of Assignors including, without limitation, all such items which are
located at the Assignors' offices at 00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxxx 00000.
N. Excluded Assets
---------------
Notwithstanding any provision of this Assignment and Assumption
Agreement for Transfer of Contributed Assets to the contrary, the
Contributed Assets and Obligations shall not include and Assignors
shall not assign, but shall retain, the assets listed on Schedule 3
attached hereto; if any.
A-3
SCHEDULE 1
TO ASSIGNMENT AND ASSUMPTION AGREEMENT
FIXED ASSET SCHEDULE
--------------------
[to be supplied by PGI]
SCHEDULE 2
TO ASSIGNMENT AND ASSUMPTION AGREEMENT
TRADE NAMES AND INTANGIBLES
---------------------------
[to be supplied by PGI]
SCHEDULE 3
TO ASSIGNMENT AND ASSUMPTION AGREEMENT
EXCLUDED ASSETS
---------------
[to be supplied by PGI]
EXHIBIT B
TO
FORMATION AGREEMENT
FORM OF SPACE SHARING AGREEMENT
EXHIBIT C
TO
FORMATION AGREEMENT
FORM OF REGISTRATION RIGHTS AGREEMENT
EXHIBIT D
TO
FORMATION AGREEMENT
FORM OF NON-COMPETE AGREEMENT
EXHIBIT E
TO
FORMATION AGREEMENT
FORM OF VOTING AGREEMENT
EXHIBIT F
TO
FORMATION AGREEMENT
FORM OF MANAGEMENT AGREEMENT
EXHIBIT G
TO
FORMATION AGREEMENT
FORM OF INDEMNITY AGREEMENT
