PURCHASE AND
SALE AGREEMENT
This Agreement is made and entered into this
9th day of July, 1996, by and between SUNDAY
ESTATES, INC, a Nevada ("Seller"), and EMERITUS
CORPORATION, a Washington corporation
("Purchaser").
PURCHASE AND SALE
1. On the terms and conditions set forth herein,
Seller shall sell to Purchaser and Purchaser shall
purchase from Seller the following:
a. The real property situated in the state of
Nevada, which is more particularly described in
Exhibit A attached hereto (the "Real Property")
and the improvements on the Real Property which
are currently under construction and which upon
completion will constitute the 116-unit assisted
living facility to be known as Concorde Senior
Citizen Residence and located in Las Vegas, Nevada
(the "Facility").
b. All equipment, furniture, fixtures,
inventory (including linens, dietary supplies and
housekeeping supplies but specifically excluding
food and other consumable inventories) and other
tangible and intangible personal property owned or
to be owned as of the Closing Date (as defined
below) by Seller and located or to be located as
of the Closing Date on the Real Property or used
in connection with the operation of the Facility,
including but not limited to, entitlements,
telephone numbers, any right, title or interest
which Seller may have in and to any service marks,
trademarks or trade names owned or employed by
Seller in conjunction with the operation of the
Facility specifically including the name "Concorde
Senior Citizen Residence" and any trade names and
trade marks related thereto and goodwill
associated therewith, and all motor vehicles owned
or leased by Seller and used in conjunction with
the operation of the business conducted at the
Facility, but specifically excluding cash, cash
equivalents and accounts receivable for the period
prior to the Closing Date (as defined below) (the
"Personal Property"), which Personal Property is
more particularly described in Exhibit B.
c. The food and other consumable inventories
located at, and usable in the operation of, the
Facility on the Closing Date (the "Consumables").
Hereinafter the foregoing shall sometimes be
collectively referred to as "Seller's Assets."
PURCHASE PRICE
2. The purchase price payable by Purchase to
Seller for Seller's Assets shall be Eight Million
Four Hundred Thousand and no/100 Dollars
($8,400,000) and shall be payable as follows:
a. Fifty Thousand and no/100 Dollars
($50,000) on execution of this Agreement (the
"First Xxxxxxx Money Payment") shall be delivered
by Purchaser to Fidelity National Title Insurance
Company, 0000 Xxxxxxxxx, Xxxxx 000, Xxx Xxxxx, XX
00000 (the "Escrow Agent") and Two Hundred
Thousand and no/100 Dollars ($200,000) (the
"Second Xxxxxxx Money : Payment" and together with
the First Xxxxxxx Money Payment, the
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"Xxxxxxx Money") in the event Purchaser is
satisfied with the results of its due diligence
investigation conducted pursuant to Paragraph
11(a)(ii). In the event the purchase and sale
contemplated by this Agreement is consummated,
then the Xxxxxxx Money will be credited against
the Purchase Price at Closing. In the event the
purchase and sale contemplated by this Agreement
fails to occur, the Xxxxxxx Money shall be
remitted to Seller or Purchaser, as appropriate,
in accordance with the provisions of Paragraph 17
hereof. The Escrow Agent shall be authorized, at
Purchaser's option, to invest the Xxxxxxx Money in
such manner as Purchaser may direct with Seller's
reasonable written approval; provided, however,
that the Escrow Agent shall invest the Xxxxxxx
Money only in such manner as will allow Escrow
Agent to disperse the Xxxxxxx Money on two (2)
days' notice; and provided, further, that the
Escrow Agent shall be authorized to release the
Xxxxxxx Money to Seller prior to Closing upon
Seller's delivery to Purchaser of security for the
repayment thereof, in the event Purchaser is
entitled to the return thereof in accordance with
the terms of this Agreement, which security shall
be in the form of a second lien on the Real
Property evidenced by a Deed of Trust in form and
substance reasonably acceptable to Purchaser. All
interest or other earnings on the Xxxxxxx Money
shall become part of the Xxxxxxx Money and shall
be dispersed to the party who becomes entitled to
the Xxxxxxx Money pursuant to the provisions of
this Agreement; provided, however, that in the
event Seller requests an early release of the
Xxxxxxx Money in accordance with the terms hereof
and Seller is thereafter required by the terms of
this Agreement to return the same to Purchaser,
Seller shall be required to pay Purchaser interest
thereon at the same rate of interest that
Purchaser was earning or would have earned had the
Xxxxxxx Money been held by Escrow Agent;
b. Two Million One Hundred Fifty Thousand and
no/100 Dollars ($2,150,000), as adjusted by any
costs and prorations provided for in Paragraph 5,
shall be due and payable in cash at Closing (as
defined below); and
c. The balance by execution and delivery at
Closing of Purchaser's Promissory Note in the face
amount of Six Million and no/100 Dollars
($6,000,000) which Note shall (i) be in form and
substance acceptable to Purchaser and Seller, (ii)
shall be due and payable in full 18 months after
the Closing Date, (iii) shall bear no interest
during the first six months of the term thereof,
(iv) shall bear interest at the annual rate of
10"% per annum during the second six months of the
term thereof, with interest only due during said
six month period, (v) shall bear interest at the
rate of 11% per annum during the last six months
of the term thereof, with interest only due during
said six month period and (vi) shall be secured by
a first lien on the Seller' s Assets, with the
documents evidencing such lien to be in form and
substance acceptable to Seller and Purchaser;
provided, however, Seller shall have the right,
subject to Purchaser's consent, to place a first
lien of the Seller's Assets prior to Closing, to
transfer title to the Seller's Assets to Purchaser
subject to said first lien and to enter into an
All-Inclusive Note and Deed of Trust with
Purchaser which would "wrap" the obligations of
Purchaser to Seller around the obligations of
Seller to said lender; provided, however, that
Purchaser shall have no obligation to consent
thereto unless it is fully satisfied with the
terms of the underlying loan and lien documents
and its loan and lien documents with Seller and,
in, particular, with the protections afforded to
Purchaser thereunder to ensure that it will be
provided with notice of and an opportunity to cure
a default by Seller with respect to the underlying
loan and that such cure rights may be exercised by
Purchaser without any additional cost to Purchaser
under the terms hereof.
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d. The purchase price shall be allocated
among Seller's Assets in the manner set forth in
Exhibit C.
Except as specifically provided in this
Agreement, Purchaser does not hereby or in
connection herewith assume any liability of Seller
whatsoever in relation to Seller's Assets, the
Real Property, the Personal Property or the
Facility which relates to the period prior to
Closing.
CLOSING
3. The Closing of the purchase and sale under this
Agreement (the "Closing") shall take place on or
before September 1,1996 (provided all of the
conditions to closing set forth in Paragraphs 13
and 14 have been satisfied or waived) (the
"Closing Date"); provided, however, that Purchaser
shall have the right on written notice to Seller
delivered on or prior to the Closing Date to
extend the Closing Date for a period of up to
thirty (30) days. Closing shall occur at the
offices of Escrow Agent or at such other place as
Purchaser and Seller may mutually agree. Time is
of the essence hereto.
CONVEYANCE
4. Conveyance of the Seller's Assets to Purchaser
shall be effected by a Warranty Deed and Xxxx of
Sale in form and substance substantially the same
as those attached hereto as Exhibits D and E. Fee
simple insurable title to the Real Property and
indefeasible title to the Personal Property shall
be conveyed from Seller to Purchaser free and
clear of all liens, charges, easements and
encumbrances of any kind, other than the
following:
a. Liens for real estate taxes not yet due
and payable;
b. Such items of record as described in the
Title Report (as defined below) which are not
objected to by Purchaser in accordance with the
terms of Paragraph 11(a)(ii);
c. All laws, ordinances and governmental
regulations, including, but not limited to, all
applicable building, zoning, land use and
environmental ordinances and regulations;
provided, however, that the provisions of this
clause (c) shall be subject to Purchaser's right
to object thereto and Seller's agreement to take
corrective action in response to said objections
all as specified more fully in Paragraph
11(a)(ii);
d. The rights of the residents or prospective
residents of the Facility under written rental
agreements; and
e. Any liens related to the financing
described in Paragraph 2(c).
COSTS. PRORATIONS AND AI)JUSTMENTS
5. The costs of the transaction and the expenses
related to the ownership and operation of the
Seller's Assets shall be allocated among Seller
and Purchaser as follows:
a. Seller shall pay any transfer or
documentary stamp tax due on the recording of the
Deed.
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b. Purchaser shall pay any sales tax due on
the sale of the Personal Property.
c. Seller shall pay the cost of the Title
Report and title insurance policy issued pursuant
thereto and the ALTA surrey required to deliver
the same; provided, however, Purchaser shall pay
the cost of any title endorsements requested by
Purchaser.
d. Purchaser shall pay for any Phase I
Assessment of the Seller's Assets which it elects
to secure.
e. Any revenues (including but not limited to
rent due from the residents of the Facility) and
expenses (including but not limited to payroll and
employee benefits) related to the ownership or
operation of the Seller's Assets shall be prorated
as of the Closing Date, with Seller responsible
therefore for the period prior to the Closing Date
and with Purchaser responsible therefor for the
period from and after the Closing Date, it being
understood and agreed that the Facility is under
construction and is to be delivered to Purchaser
at Closing in a turnkey condition and as such none
of the residents of the Facility may have
commenced occupancy thereof as of the: Closing
Date.
f. 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.
g. 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 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.
h. Purchaser and Seller shall each pay their
own attorney's fees.
i. Purchaser and Seller shall share recording
fees related to the recording of the Deed and any
escrow fees on a 50-50 basis.
j. In the event Seller elects to cure any
objections Purchaser makes to the items described
in the Title Report or the UCC-1 search report,
then Seller shall pay the cost of obtaining and
recording any releases necessary to deliver title
to the Seller's Assets in accordance with the
terms of this Agreement.
POSSESSION
6. At Closing, Purchaser shall be entitled to
possession of the Seller's Assets, subject only to
the rights of the residents of the Facility under
the Facility Leases (as defined below), if
applicable.
REPRESENTATIONS AND WARRANTIES
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7. Seller hereby warrants and represents to
Purchaser that:
a. STATUS OF SELLER. Seller is a corporation
duly organized, validly existing and in good
standing under the laws of the State of Nevada.
b. SELLER'S AUTHORITY. Seller has full power
and authority to execute and to deliver this
Agreement and all related documents, and to carry
out the transaction contemplated herein. This
Agreement is valid, binding and enforceable
against Seller in accordance with its terms,
except as such enforceability may be limited by
creditors' rights laws and applicable principles
of equity. The execution of this Agreement and the
consummation of the transaction contemplated
herein do not result in a breach of the terms and
conditions of nor constitute a default under or
violation of Seller's charter documents or 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.
c. TITLE. Seller has good and insurable fee
simple title to the Real Property, and the
Facility, subject only to the easements,
reservations and encumbrances, if any, permitted
under Paragraph 4, and good and indefeasible title
to the Personal Property free and clear of all
leases, liens and encumbrances. The Personal
Property is, or as of Closing will be, all of the
furniture, fixtures and equipment necessary to
operate the Facility at full capacity unless
Purchaser elects to waive the requirement that
Seller furnish the bedrooms of the resident units
located within the Facility (the "Bedroom
Furnishings") in which case the Personal Property
shall include all furniture, fixtures and
equipment necessary for the operation of the
Facility at full capacity other than the Bedroom
Furnishings and all of such Personal Property is,
and at Closing will be, in good operating
condition and repair and accordingly in the same
or better condition and repair, as on the date of
Purchaser's inspection thereof pursuant to
Paragraph 11(a)(ii).
d. THE REAL PROPEZTY. The Facility is located
on that certain parcel of land more particularly
described in Exhibit A attached hereto. The
Facility, including, the roof and all major
mechanical systems at the Facility, including, but
not limited to, the Air Conditioning, Electrical
and Heating and Ventilating Systems at Closing
shall be in the good operating condition and
repair and the construction of the Facility will
be completed as of the Closing Date to the
satisfaction of Purchaser and all necessary
approvals from the City of Las Vegas and the State
of Nevada related thereto have been or shall have
been secured by Seller and. delivered to Purchaser
as and when received.
e. NECESSARY ACTION. Seller will proceed with
all due diligence to take all action and obtain
all consents prior to Closing necessary for it to
lawfully enter into and carry out the terms of
this Agreement.
f. TAXES AND TAX RETURNS. All tax returns,
reports and filings of any kind or nature required
to be filed by Seller prior to Closing with
respect to its ownership and, if applicable,
operation of the Facility and its ownership of the
Real Property and the Personal Property have been
properly completed and timely filed in material
compliance with all applicable requirements and
all taxes or other obligations which are due and
payable by Seller have been timely paid.
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g. LITIGATION. There is no litigation,
investigation, or other proceeding pending or, to
the best of Seller's knowledge, threatened against
or relating to Seller, its properties or business,
which is material to Seller's Assets, the
Facility, the Real Property or the Personal
Property or to this Agreement, or which would
prevent Seller from performing its obligations
hereunder, and 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 litigation, investigation or other
proceeding. For purposes hereof, litigation, an
investigation or other proceeding shall be deemed
to be pending if the same has been served on
Seller or Seller has otherwise been advised either
orally or in writing of the pendency thereof.
h. BOOKS AND RECORDS. All of the books and
records maintained by Seller with respect to its
ownership and/or, if applicable, operation of the
Seller's Assets are true and correct in all
material respects.
i. THE FACILITY LEASES. In the event Seller
enters into any leases with residents or
prospective residents of the Facility prior to the
Closing Date, they shall be in the form of that
rental or admission agreement attached hereto as
Exhibit F (the "Facility Leases") and a true and
correct copy of each such Facility Lease, as and
when executed, shall be provided by Seller to
Purchaser. If applicable, at Closing Seller shall
deliver to Purchaser duly executed assignments of
the Facility Leases.
j. RENT ROLL. In the event Seller enters into
any Facility Leases prior to the Closing Date, it
shall provide 1'urchaser with a true and correct
rent roll on a monthly basis from the date
executed to the Closing Date, which identifies
each of the residents of the Facility, the monthly
rent currently being paid by each such tenant and
the date to which said rent has been paid and, in
the event of any rent delinquencies, an
explanation of the reason therefor and the efforts
being undertaken by Seller to collect said rent.
k. LIENS. There are no mechanics',
materialmen's or similar liens presently claimed-.
against the Seller's Assets for work performed or
commenced prior to the date hereof at the request
of Seller or of which Seller has knowledge in
connection with the construction and equipping of
the Facility, Seller having made or caused to be
made arrangements for payment of all those
improvements now under construction or development
and there will : be no such claims or liens at
Closing, it being understood and agreed that
Seller shall make arrangements for the full and
timely payment at or prior to Closing for all work
related to the construction of the Facility and
shall deliver to Purchaser at Closing duly
executed and filed unconditional lien waivers
executed by the contractor, all subcontractors,
suppliers and materialmen.
l. ENVIRONMENTAL MATTERS. Except in
accordance with, and in full compliance with, any
and all applicable governmental laws, regulations
and requirements (collectively, the "Environmental
Laws") relating to environmental and occupational
health and safety matters and hazardous materials,
substances or wastes (as defined from time to time
under any. applicable federal, state or local
laws, regulations or ordinances), Seller has not
released into the environment, or discharged,
placed or disposed of any such hazardous
materials, substances or wastes or caused the same
to be so released into the environment or
discharged, placed or disposed of at, on or under
the Seller's Assets, Seller has not installed any
underground storage tanks on the Real Property and
Seller
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has not used the Real Property as a dump for waste
material. To the best of Seller's knowledge, no
hazardous materials, substances or wastes are
located on the Real Property or the Facility or
have been released into the environment or
discharged, placed or disposed of in, on or under
the Real Property or the Facility; no underground
storage tanks are located on the Real Property;
the Real Property has never been used as a dump
for waste material and the Real Property and the
Facility and the prior uses of the Real Property
and the Facility at all times complied with all
Environmental Laws.
m. EMPLOVEES: UNIONS. As of the date hereof,
there are no employees of the Facility. In the
event Seller hires any such employees prior to
Closing, it will permit Purchaser to participate
in the hiring of any and all needed Facility
employees and it will ensure that none of such
employees will be members of a labor union or
subject to a collective bargaining agreement with
respect to their employment at the Facility.
n. COMPLIANCE WITH LAW
(i) The Seller's Assets are, and upon
completion of the construction thereof, will be in
compliance with all currently applicable
municipal, county, state and federal laws, regula
tions, ordinances, standards and orders and with
all municipal, health, building and zoning by-laws
and regulations (including, without limitation,
the Americans with Disabilities Act and building
and zoning codes) where the failure to comply
therewith or to obtain a waiver therefrom could
have a material adverse effect on the business,
property, condition (financial or otherwise) or
operation of the Seller's Assets;
(ii) There are no, and as of the Closing Date
there will not be, any outstanding: deficiencies
or work orders, of any authority having
jurisdiction over the Seller's Assets requiring
conformity to any applicable statute, regulation,
ordinance or by-law pertaining thereto; and
(iii) Seller is not aware of any claim,
requirement or demand of any agency supervising or
having authority over the Facility to rework or
redesign it or to provide additional furniture,
fixtures or equipment so as to confirm to or
comply with any existing law, code or standard
which has not been fully satisfied prior to the
date hereof or which will not be satisfied prior
to the Closing Date.
o. OPERATING CONTRACTS. Seller is not
currently a party to an operating contract in
connection with the operation of the Facility (the
"Operating Contracts"). In the event Seller
intends to enter into any such Operating Contracts
prior to Closing, it will (i) provide Purchaser
with a copy thereof, (ii) secure Purchaser's
consent thereto prior to executing the same, (iii)
provide a fully executed copy thereof to Purchaser
and (iv) assign the same to Purchaser at Closing.
p: THE FACILITY. Upon completion of the
construction thereof, the Facility will be an
assisted living facility licensed by the State of
Nevada as a group care facility with a total of
116 units and shall not at Closing be certified to
participate in Medicare or Medicaid. Seller has no
reason to believe that the Facility will not be
fully qualified for licensure and, if applicable,
for Medicare and/or Medicaid certification upon
the completion of the construction thereof on or
prior to the Closing Date.
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q. INVENTORY. All inventories of central
supplies, linen, housekeeping and other supplies
located at the Facility on the Closing Date will
be in sufficient condition and quantity to operate
the Facility under applicable state and federal
law as of the Closing Date.
r. DISCLOSURE. No representation or warranty
by Seller contained in this Agreement and no
statement contained in any certificate, list,
exhibit, or other instrument furnished or to be
furnished to Purchaser pursuant hereto, or in
connection with the transaction contemplated
hereby, contains or will contain any untrue
statement of a material fact, or omits or will
omit to state any material facts which are
necessary in order to make the statements
contained herein or therein not misleading.
The representations and warranties of Seller in
this Paragraph 7 shall be true and correct in all
respects, are made by Seller both as of the date
hereof and as of the date of Closing.
8. Purchaser hereby warrants and represents to
Seller that:
a. STATUS OF PURCHASER. Purchaser is a
corporation duly organized and validly existing
under the laws of the state of Washington and is
in good standing under the laws thereof and is, or
prior to Closing will be, duly qualified to do
business in the State of Nevada.
b. AUTHORITY. Subject to obtaining the
approval of its Board of Directors, which prior to
the end of the Due Diligence Period Purchaser
shall either have obtained or advised Seller that
it is not able to obtain the same, Purchaser has
full power and authority to execute and to deliver
this Agreement and all related documents, and to
carry out the transactions contemplated herein.
This Agreement is valid, binding and enforceable
as against Purchaser in accordance with its terms,
except as such enforceability may be limited by
creditors' rights laws and applicable principles
of equity. The execution of this Agreement and the
consummation of the transaction contemplated
herein do not result in a breach of the terms and
conditions of nor constitute a default under or
violation of Purchaser's Articles of Incorporation
or By-laws or any law, 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 or Purchaser may be bound or
affected.
c. LITIGATION. There is no litigation,
investigation or other proceeding pending or, to
the best of Purchaser's knowledge, threatened
against or relating to Purchaser, its properties
or business which is material to this Agreement,
or which would prevent Purchaser from performing
its obligations hereunder, nor does Purchaser know
or have reasonable grounds to know of any basis
for any such action. For purposes hereof,
litigation, an investigation or a proceeding shall
be deemed to be pending if the same has been
served on Purchaser or Purchaser has been advised
either orally or in writing of the pendency
thereof.
d. NECESSARV ACTION. Purchaser will proceed
with all due diligence to take all action and
obtain all consents prior to Closing necessary for
it to lawfully enter into and carry out the terms
of this Agreement, including, but not limited to,
using its best efforts to obtain the consent of
its Board of Directors within the time period
provided for in this Agreement.
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e. DISCLOSURE. No representation or warranty
by Purchaser contained in this Agreement and no
statement contained in any certificate, list,
exhibit, or other instrument furnished or to be
furnished to Seller pursuant hereto, or in
connection with the transaction contemplated
hereby, contains or will contain any untrue
statement of a material fact, or omits or will
omit to state any material facts which are
necessary in order to make the statements
contained herein or therein not misleading.
9. BROKER
Each party hereby represents and warrants to
the other party that it has not contacted or
entered into any agreement with any real estate
broker, agent, finder, or any other party in
connection with this transaction and that it has
not taken any action which would result in any
real estate broker's, finder or other fees or
commissions being due and payable to any other
party with respect to the transaction contemplated
by this Agreement, other than Xxxxxxxx Xxxxxx of
Empire Investments, who has been retained and
shall be compensated by Seller. Each xxxxx hereby
indemnifies and agrees to hold the other party
harmless from any loss, liability, damage, cost,
or. expense (including reasonable attorney's fees)
resulting to the other party by reason of a breach
of the representation and warranty made by the
indemnifying party in this paragraph.
Notwithstanding anything to the contrary contained
in this Agreement, the indemnity set forth in this
paragraph and any sums due pursuant to such
indemnity shall constitute separate agreements in
causes of action in addition to any liquidated
damages provided for in this Agreement.
COVENANTS
10. SELLER
a. PRE-CLOSING. Between the date hereof and
the Closing Date, except as contemplated by this
Agreement or with the consent of Purchaser:
i. Other than as set forth in Paragraph 4
Seller will satisfy and discharge all claims,
liens, security interests, tenancies (other than
the Facility Leases and any Operating Contracts
which Purchaser assumes at Closing pursuant to the
terms hereof, and encumbrances on Seller's Assets;
ii. Seller will file all tax returns, reports
and filings of any kind or nature required to be
filed by Seller and will timely pay all taxes or
other obligations which are due and payable with
respect to Seller's Assets;
iii. 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, and Seller will continue until the
Closing to fulfill any obligations which it may
have under the Facility Leases;
iv. Seller will operate the Facility only in
the ordinary course and with due regard to the
proper maintenance and repair of the Facility and
the Personal Property; provided, however, this
covenant shall not be applicable unless Seller has
commenced operations at the Facility prior to the
Closing Date;
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v. Seller will take all reasonable action to
preserve the goodwill of the residents of the
Facility; provided, however, this covenant shall
not be applicable unless Seller has commenced
operations at the Facility prior to the Closing
Date;
vi. Seller will not make any material change
in the operation of the Facility; provided,
however, this covenant shall not be applicable
unless Seller has commenced operations at the
Facility prior to the Closing Date; and Seller
will not sell or agree to sell any of the items
which comprise the Personal Property nor otherwise
enter into an agreement materially- affecting any
of the Seller's Assets;
vii. Seller will use its reasonable efforts
to retain the services and goodwill of the
employees located at or connected with the
operation of the Facility; provided, however, this
covenant shall not be applicable unless Seller has
commenced operations at the Facility or hired
employees for the Facility prior to the Closing
Date;
viii. Seller will maintain in force the
existing hazard and liability insurance policies,
or comparable coverage, for the Seller's Assets as
now in effect,
ix. Seller will not increase the compensation
or other benefits or bonuses payable or to become
payable to any of the Seller's employees connected
with the operation of the Facility, except for
increases substantially in accordance with
existing employment practices disclosed to and
approved by Purchaser, if any or except for
increases which will not affect Purchaser's
operations at the Facility after closing;
provided, however, this covenant shall not be
applicable unless Seller has commenced operations
at the Facility prior to the Closing Date;
x. Subject to Seller's obligations under
Paragraph 7(o) with respect to the Operating
Contracts and such contracts or commitment as
Seller may need to enter into in connection with
the completion of the construction of the Facility
and for which Purchaser shall have no liability
after the Closing, Seller will not enter into any
contract or commitment affecting the Seller's
Assets except in the ordinary course of business
and Seller will advise Purchaser of any contracts
or commitments which it enters, whether in the
ordinary course of business or otherwise;
xi. During normal business hours, Seller will
provide Purchaser and its agents with access (in
the company of a representative of Seller) on 24
hours notice to the Real Property and the
Facility, provided Purchaser does not, if
applicable, interfere with the operation of the
Facility and provided Purchaser uses its best
efforts not to disturb any residents of the
Facility during the course of such inspections and
at such times Seller shall permit Purchaser to
inspect the books and records and the physical and
structural condition of the Facility, the Real
Property and the Personal Property;
xii. Seller will timely pay all obligations
which are due and payable with respect to the
Seller's Assets;
xiii. Seller will operate the Facility in
substantial compliance with all applicable
municipal, county, state and federal laws,
regulations, ordinances, standards and orders as
now in effect (including without limitation, the
building and zoning codes as currently
10
applied with respect thereto) and with the
Environmental Laws, 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 or on the
Seller's Assets; provided, however, this covenant
shall not be applicable unless Seller has
commenced operations at the Facility prior; to the
Closing Date;
xiv. Seller will take all reasonable action
to achieve substantial compliance in the
construction, equipping and, if applicable,
operation of the Facility with any laws,
regulations, ordinances, standards and orders
applicable to the Seller's Assets which are
enacted after execution of this Agreement and
prior to Closing;,
xv. Seller will proceed with all due
diligence to secure any consents which may be
necessary for the assignment of the Facility
Leases; provided, however, this covenant shall not
be applicable unless Seller has commenced
operations at the Facility prior to the Closing
Date;
xvi. As soon as practicable after the date
hereof but in no event later than twenty (20) days
following full execution of this Agreement, Seller
will (a) deliver to Purchaser a UCC-I search
report (herein so called), (b) shall cause Chicago
Title Insurance Company to furnish to Purchaser a
current title commitment (the "Title Report") for
the issuance to Purchaser of an extended coverage
Owner's title insurance policy with a value equal
to the purchase price (the "Title Policy"),
insuring Purchaser's interest in the Real Property
and the Facility, . subject to no exceptions other
than those of the usual printed exceptions, which
are acceptable to Purchaser and the Permitted
Exceptions (hereafter defined) and (c) arrange
with a survey firm acceptable to Purchaser for the
preparation and delivery of an ALTA Survey of the
Real Property and the Facility (the "Survey");
xvii. Seller will provide Purchaser within
ten (10) days after execution of this Agreement
with copies of any environmental reports,
structural report or geological reports which may
be in Seller's possession with respect to the
Facility and the Real Property;
xviii. Seller will cooperate with Purchaser
in any efforts which it may undertake to audit
Seller's financial statements with respect to the
Facility for the periods prior to the Closing if
and to the extent such an audit is required for
Purchaser's compliance with applicable securities
laws;
xix. In the event Purchaser has not
terminated this Agreement as of the end of the Due
Diligence Period, Seller shall permit Purchaser
(A) to assume responsibility for the marketing of
the Facility in anticipation of the completion of
the construction thereof and (B) to request
changes in the design of the Facility or the
proposed furnishings, fixtures and equipment
therein if either the same will not increase the
cost of the completion thereof or Purchaser agrees
to assume said additional cost;
xx. In the event Seller requests a release of
the Xxxxxxx Money in accordance with Paragraph 2,
Seller will execute any and all documents
reasonably requested by Purchaser to evidence the
security described in Paragraph 2(a); and
11
xxi. Seller will proceed with all due
diligence to complete the construction of the
Facility in a timely and professional manner, in
accordance with all applicable requirements of and
the State of Nevada, including, but not limited
to, the requirements of Nevada law applicable to
the licensure of the Facility as a group care
home, and subject to those design modifications
requested by Purchaser and agreed to by Seller
which are more fully described in Exhibit G
hereto.
b. CLOSING. On the Closing Date, Seller
agrees that it will:
i. Execute and deliver to Purchaser a good
and sufficient Warranty Deed to the Real Property
(including the Facility) and Xxxx of Sale with
respect to the Personal Property and such
endorsements, assignments and other instruments of
transfer and conveyance as shall be necessary to
transfer and assign Seller's Assets to Purchaser
as herein provided;
ii. Deliver to Purchaser a certificate dated
as of the Closing Date, certifying in such detail
as Purchaser may reasonably specify the
fulfillment of the conditions set forth in
Paragraph(s) 13(a) and (b) subject to the
limitations set forth in Paragraph 26 and setting
forth the incumbency of the officers executing
documents on behalf of Seller; a copy of the
resolutions adopted by Seller's Board of Directors
authorizing the transaction provided for herein
and the execution of this Purchase Agreement and
the other documents contemplated herein and
attaching a certificate of good standing issued by
the Nevada Secretary of State within no more than
thirty (30) days prior to Closing;
iii. Deliver the tangible property included
in the Seller's Assets to Purchaser in the
condition and repair required by the terms of this
Agreement;
iv. Deliver to Purchaser a duly executed
assignment of the Facility Leases (the "Facility
Lease Assignment Agreement"); provided, however,
this covenant shall not be applicable unless
Seller has executed any Facility Leases prior to
the Closing Date;
v. Pay its share of the Closing costs,
including, but not limited to, the Title Report,
Title Policy and Survey described in Paragraph
10(a)(xvi);
vi. Deliver to Purchaser an Assignment and
Assumption Agreement with respect to any of the
Operating Contracts which Purchaser elects to
assume at Closing pursuant to Paragraph 11 (a)(v)
(the "Operating Contract Assumption Agreement");
provided, however, this covenant shall not be
applicable unless Seller has executed any
Operating Contracts in accordance with the terms
hereof prior to the Closing Date;
vii. Deliver to Purchaser the Resident
Deposits (as defined in Paragraph 20); provided,
however, this covenant shall not be applicable
unless Seller has executed any Facility Leases and
accepted any resident funds prior to the Closing
Date;
viii. Deliver to Purchaser the Benefits
Schedule (as defined in Paragraph 19) and pay the
Vacation Pay to Purchaser in accordance with the
provisions of Paragraph 19 provided, however, this
covenant shall not be applicable unless Seller has
hired any employees prior to the Closing Date;
12
ix. Deliver to Purchaser an Assignment and
Assumption Agreement with respect to all written
or oral warranties or indemnity agreements issued
to Seller by, and any rights which Seller may have
against any, third parties in connection with the
design and construction of the Facility; and :
x. Deliver to Purchaser evidence of the
designation of a duly authorized representative to
act with full power and authority on behalf of
Seller with respect to any post-closing
obligations imposed on Seller hereunder.
c. POST-CLOSING. After the Closing of this
Agreement, Seller agrees that, at Purchaser's sole
cost and expense, it will take such actions and
properly execute and deliver to Purchaser such
further instruments of assignment, conveyance and
transfer as, in the reasonable opinion of counsel
for Purchaser and Seller, may be reasonably
necessary to assure, complete and evidence the
full and effective transfer and conveyance of
Seller's Assets and cooperate with Purchaser in
any efforts which it may undertake to audit
Seller's financial statements with respect to the
Facility for the periods prior to the Closing if
and to the extent such an audit is required for
Purchaser's compliance with applicable securities
laws.
11. PURCHASER
a. PRE-CLOSING. Between the date hereof and
the Closing Date, 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;
ii. Within ten ( 10) days after its receipt
of the UCC- I Search Report, the Title Report and
the Survey, Purchaser shall advise Seller in
writing of its objections, if any, to each of the
UCC-1 Search Report, the Title Report and the
Survey. In the event Purchaser fails to notify
Seller in writing of Purchaser's objections within
said ten (10) day period, Purchaser shall be
deemed to have waived its right to object. Within
five (5) days of Seller's receipt of Purchaser's
objections, Seller shall advise Purchaser whether
it intends to correct the defects to which
Purchaser has objected. Seller shall be obligated
to act in good faith in responding to Purchaser's
title objections. For purposes hereof, Seller
shall be deemed to have failed to act in good
faith if its refuses to correct any matter which
is the subject of such title objections where the
only costs to it in doing are normal filing or
recording fees or delivery charges and where the
objections relate to liens which appear of record
but relate to previously discharged debt or other
minor defects in record title. If Seller refuses
to correct some or all of such defects, Purchaser
shall have five (5) days to advise Seller of its
decision to close, notwithstanding the defects, or
to terminate this Agreement, in which case neither
party shall have any further rights or obligations
hereunder, other than Seller's obligation to
return or to direct the return of Purchaser's
Xxxxxxx Money. Any matter reflected in the UCC1
Search Report, the Title Report or the Survey not
objected to in accordance with the terms hereof
shall be deemed accepted by Purchaser and to be
"Permitted Exceptions" (herein so called).
Notwithstanding anything contained herein to the
contrary, in the event Seller requires additional
time to prepare
13
either the Survey or the Title Report, then Seller
shall have such additional time to deliver the
same to Purchaser, however, in no event shall such
extension be longer than fifteen (I5) additional
days;
iii. Purchaser will proceed with all due
diligence to obtain all consents and approvals
necessary to permit the consummation of the
transaction contemplated by this Agreement and/or
necessary to permit Purchaser to own and to
operate the Facility, including, but not limited
to, a license from the Nevada State Division of
Health; and
iv. Purchaser will proceed with all due
diligence and at its sole cost and expense to
conduct such investigations and to complete the
same on or before August 1,1996, with respect to
Seller's Assets as it deems to be reasonably
necessary in connection with its purchase thereof,
including, but not limited to, zoning
investigations, soil studies, environmental
assessments, seismic assessments, wetlands reports
and investigations of Seller's and the Facility's
books and records and operations, including a
review of the licensure or permitting files
maintained by the City of Las Vegas or the State
of Nevada with respect to the Facility to the
extent the same are publicly available, and
structural inspections, provided no investigations
will be physically intrusive on the Real Property
or the Facility unless Seller consents thereto,
which consent shall not be unreasonably withheld
(the "Due Diligence Review"); provided, however,
nothing herein shall be construed as amending or
modifying in any manner the representations or
warranties of Seller set forth in this Agreement,
which representations and warranties shall be
separate from and unaffected by Purchaser's Due
Diligence Review; and provided, further, that
Purchaser shall maintain the confidentiality of
any documents or information obtained by it during
the course of its Due Diligence Review and shall
return the same to Seller in the event the
transaction provided for herein fails close for
any reason whatsoever Purchaser shall indemnify,
defend and hold Seller and the Seller's Assets
harmless of and from any and all losses,
liabilities, costs, expenses (including without
limitation, reasonable attorney's fees and costs
of court at trial and on appeal), damages, liens,
claims (including, without limitation mechanics'
or materialmans' liens or claims of liens),
actions and causes of action arising from or
relating to Purchaser's (or Purchaser's Agents,
employees, or representatives) entering on the
Real Property and/or the Facility to test, study,
investigate or inspect the same or any part
thereof, whether pursuant to this paragraph or
otherwise or breach of its confidentiality
obligations hereunder. The foregoing indemnity
shall expressly survive the Closing or the earlier
termination of this Agreement.
b. CLOSING. On the Closing Date, Purchaser
agrees that it will:
i. Pay the balance of the cash portion of the
Purchase Price due at Closing;
ii. Deliver the executed Note at Closing and
related loan documents all in accordance with
Paragraph 2(c);
iii. Pay its share of the Closing costs as
herein provided;
14
iv. Deliver to Seller a certificate of a
responsible officer dated as of the Closing Date,
certifying in such detail as Seller may reasonably
specify the fulfillment of the conditions set
forth in Paragraph(s) 14(a) and (b) subject to the
limitations set forth in Paragraph 26 and setting
forth the incumbency of the officers executing
documents on behalf of Purchaser, a copy of the
resolutions adopted by Purchaser's Board of
Directors authorizing the transaction provided for
herein and the execution of this Purchase
Agreement and the other documents contemplated
herein and attaching a certificate of good
standing issued by the Washington and Nevada
Offices of the Secretary of State within no more
than thirty (30) days prior to Closing;
iv. Execute the Operating Contract Assumption
Agreement, if applicable;
v. Execute the Facility Lease Assignment
Agreement, if applicable; and
vi. Release and/or return any security
delivered to it by Seller in consideration for the
early release of the Xxxxxxx Money.
c. POST-CLOSING. After the Closing of this
Agreement, Purchaser agrees that it will:
i. Provide Seller with access during normal
business hours to any books or records which
Seller may need to file or to defend tax returns
or other filings filed prior or subsequent to the
Closing Date which relate to periods prior to the
Closing Date; and
ii. Take such actions and properly execute
and deliver such further instruments as Seller may
reasonably request to assure, complete and
evidence the transaction provided for in this
Agreement.
12. MUTUAL
Following the execution of this Agreement,
Purchaser and Seller agree:
a. If any event should occur, either within
or without the knowledge or control of Purchaser
or Seller, which would prevent fulfillment of the
conditions to the obligations of any party hereto
to consummate the transaction contemplated by this
Agreement, to use its or their reasonable efforts
to cure the same as expeditiously as possible; and
b. To cooperate fully with each other in
preparing, filing prosecuting, and taking any
other actions which are or may be reasonable and
necessary to obtain the consent of any
governmental instrumentality or any third party or
to accomplish the transaction contemplated by this
Agreement. .
CONDITIONS
13. All obligations of Purchaser under this
Agreement are subject to fulfillment, prior to or
at Closing, of each of the following conditions,
any one or all or which may be waived in writing
by Purchaser:
15
a. SELLER'S REPRESENTATIONS AND WARRANTIES
TRUE AT CLOSING. Seller's representations and
warranties contained in this Agreement or in any
certificate delivered in connection with this
Agreement or the transactions contemplated herein
shall be true in all material respects at and as
of the date of Closing as though such
representations and warranties were then again
made.
b. SELLER'S PERFORMANCE. 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.
c. NO DEFAULTS. Seller shall not be in
default, where said default cannot be cured by
Closing, under any mortgage, contract, lease or
other agreement to which Seller is a party or by
which Seller is bound and which affects or relates
to the Real Property, the Personal Property or the
Facility, including, but not limited to, the
Facility Leases.
d. DUE DILIGENCE REVIEW. Purchaser shall be
satisfied with the results of its Due Diligence
Review, including, but not limited to the results
of an EPA Phase I Assessment of the Real Property
and the Facility within the period specified in
Paragraph 11 (a) (iv); provided, however, nothing
herein shall be construed as amending or modifying
in any manner the representations or warranties of
Seller set forth in this Agreement, which
representations and warranties shall be separate
from and unaffected by Purchaser's Due Diligence
Review except as to any representations or
warranties which, during the course of Purchaser's
Due Diligence Review, Seller demonstrates
Purchaser obtained knowledge of falsity or
inaccuracy thereof. In the event Purchaser elects
to terminate this Agreement within the period
specified in Paragraph 11 (a)(iv) and this
Paragraph 13(d), the parties shall have no further
rights or obligations hereunder, other than
Purchaser's right to the return of its Xxxxxxx
Money and Seller's obligation to pay any title
cancellation and UCC search fees incurred as a
result of such termination.
e. TITLE. The Title Insurer shall issue to
Purchaser as of the date of Closing, an Owner's
extended coverage policy of title insurance for
the Real Property and the Facility in accordance
with the requirements of Paragraph 4.
f. SURVEY. Purchaser shall be satisfied as
to the results of the ALTA Survey in accordance
with the provisions of Paragraph 1 I (a)(ii).
g. UCC SEARCH. Purchaser shall be satisfied
with- the results of the UCC search conducted by
Seller pursuant to Paragraph 10(a)(xvi) in
accordance with the provisions of Paragraph 11
(a)(ii).
i. APPROVALS. Purchaser shall have received
all consents, and approvals as may be necessary
for it to own and to operate the Facility,
including, but not limited to, the issuance by the
Nevada State Division of Health to Purchaser of a
license to operate the Facility.
16
j. FACILITY CONSTRUCTION. Construction of the
Facility shall be complete to the Purchaser's
satisfaction in accordance with the requirements
of this Agreement and Seller shall have delivered
to Purchaser written evidence that it has received
all necessary city and state approvals related
thereto, including, but not limited to, licensure
approval with respect to the beds included
therein, and lien waivers from all contractors and
subcontractors providing goods or services in
connection therewith and shall have delivered the
Facility to Purchaser in accordance with the
requirements of Exhibit H.
Subject to the limitations set forth in the
foregoing Paragraph 13, in the event any of the
foregoing conditions is not satisfied by Seller or
Purchaser, as appropriate, or waived by Purchaser
prior to Closing, Purchaser shall have the right
to terminate this Agreement in accordance with the
provisions of Paragraph 17.
14. CONDITIONS TO SELLER'S OBLIGATIONS.
All obligations of Seller under this
Agreement are subject to the fulfillment, prior to
or at Closing, of each of the following
conditions, any one or all of which may be waived
by Seller in writing:
a. PURCHASER'S REPRESENTATIONS AND WARRANTIES
TRUE AT CLOSING. Purchaser's representations and
warranties contained in this Agreement or in any
certificate or document delivered in connection
with this Agreement or the transactions
contemplated herein shall be true in all material
respects at and as of the date of Closing as
though such representations and warranties were
then again made.
b. PURCHASER'S PERFORMANCE. Purchaser shall
have performed its obligations under this
Agreement that are to be performed prior to or at
Closing to the extent the same have not been
waived by Seller in accordance with the terms
hereof.
Subject to the limitations set forth in the
foregoing Paragraph 14, in the event any of the
foregoing conditions is not satisfied by Seller or
Purchaser, as appropriate, or waived by Purchaser
prior to Closing, Purchaser shall have the right
to terminate this Agreement in accordance with the
provisions of Paragraph 17.
INDEMNIFICATION
15. Seller shall indemnify and hold Purchaser
harmless from and against:
a. Except as otherwise provided in this
Agreement, any and all obligations relating to the
design and construction of the Facility, the
ownership of Seller's Assets and, if applicable,
the operation of the Facility which exist at the
Closing Date, including, but not limited to (i)
any obligations under any Facility Leases or
Operating Contracts executed by Seller in
accordance with the terms of this Agreement and
assumed by Purchaser at Closing and (ii) any
obligations with respect to any Resident Deposits;
provided, however, that with respect to the
construction of the Facility, Seller shall be
deemed to have fulfilled its obligations hereunder
with respect to claims which Purchaser may have
against third parties involved therein, if Seller
has assigned to Purchaser its rights against and
any warranties and indemnities received from any
third parties involved therein..
17
b. Subject to the limitations set forth in
Paragraph 26, 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 to Purchaser hereunder;
c. Any and all liability or loss arising out
of or relating to any failure iii connection with
the transaction contemplated herein to comply with
the requirements of any laws or regulations
relating to bulk sales or transfers; and
d. Any and all actions, suits, proceedings,
demands, assessments, judgments, reasonable costs,
and other reasonable expenses, including, but not
limited to, reasonable attorney's fees, incident
to any of the foregoing.
For purposes of Paragraph 15(a), an
obligation shall be deemed to "exist" as of the
Closing Date if it relates to the period prior to
the Closing Date even if it is not asserted until
after the Closing Date.
16. Purchaser shall indemnify and hold Seller
harmless from and against:
a. 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 Facility Leases or Operating Contracts
assumed by Purchaser at Closing and any
obligations with respect to any Resident Deposits
delivered to Purchaser at Closing;
b. Subject to the limitations set forth in
Paragraph 26, 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
Purchaser under this agreement or from any
misrepresentation in any certificate furnished or
to be furnished to Seller hereunder;
c. Any and all damage, loss or liability
resulting from the conduct by or the negligence or
willful misconduct of Purchaser in performing its
Due Diligence Review; and
d. Any and all actions, suits, proceedings,
demands, assessments, judgments, reasonable costs
and other reasonable expenses, including, but not
limited to, reasonable attorney's fees, incident
to any of the foregoing.
TERMINATION
17. a. This Agreement may be terminated
and the transaction contemplated herein abandoned
at any time prior to Closing:
i. By mutual agreement of the parties;
ii. By Seller, if any of the conditions set
forth in Paragraph 14 shall have become incapable
of fulfillment prior to the Closing Date or such
earlier date as may be specifically provided for
the performance thereof (as the same may be
extended) through no fault of Seller and as a
result of a material breach by Purchaser of its
obligations hereunder and the same shall not have
been waived by Seller;
18
iii. By Purchaser, if any of the conditions
set forth in Paragraph 13 shall have become
incapable of fulfillment prior to the Closing Date
or such earlier date as may be specifically
provided for the performance thereof (as the same
may be extended) through no fault of Purchaser and
as a result of a material breach by Seller of its
obligations hereunder and the same shall not have
been waived by Purchaser;
iv. By either Seller or Purchaser in the
event of a material breach by the other party of
its obligations hereunder;
v. If the Closing has not occurred by
October 1,1996 (the "Outside Closing Date"),
unless extended by mutual agreement of the
parties; provided, however, that in the event all
of the conditions to Closing provided for in
Paragraph 13 have been satisfied or waived by the
Outside Closing Date other than the Purchaser's
receipt of the License pursuant to Paragraph
13(i), provided Purchaser is diligently pursuing
the issuance of the License by the Nevada State
Division of Health, the Outside Closing Date shall
automatically be extended: for such additional
period of time as may be necessary to permit
Purchaser to secure the License; provided, further
that in the event Purchaser has not secured the
License by December 1,1996, this Agreement shall
thereafter terminate in accordance with the terms
hereof and the parties shall have no further
rights or obligations hereunder other than
Purchaser's right to the return of its Xxxxxxx
Money.
b. In the event that prior to the Closing
Date, a material portion of the Real Property, the
Facility or the Personal Property shall have been
damaged or destroyed by fire or other casualty, or
shall have been taken or condemned by any: public
or quasi-public authority under the power of
eminent domain, Purchaser shall have the right to
terminate this Agreement on written notice to
Seller which notice must be delivered within ten
(10) days after Purchaser receives notice of such
damage, destruction or condemnation. In the event
Purchaser fails to exercise its termination rights
hereunder, then it shall be conclusively deemed to
have waived said right and Seller shall assign to
Purchaser all of its rights to any insurance
proceeds or condemnation award and all claims in
the connection therewith. In the event Purchaser
exercises its termination rights hereunder, the
parties shall have no further rights or
obligations hereunder other than Purchaser's right
to the return of its Xxxxxxx Money.
c. Neither party to this Agreement may claim
termination or pursue any other remedy referred to
in Paragraph I 7(a) on account of a breach of a
condition, covenant or warranty by the other,
without first giving such other party written
notice of such breach and not less than ten (10)
days within which to cure such breach; provided,
however, in no event shall the Closing Date be
postponed beyond the Outside Closing Date.
d. In the event of the termination of this
Agreement by Seller under Paragraphs 17(a)(ii) or
(iv) or under Paragraph 17(a)(v) in the event the
Closing has failed to occur as a result of a
material breach by Purchaser of its obligations
hereunder, Seller's sole remedy shall be to
terminate this Agreement and to retain Purchaser's
Xxxxxxx Money as full and complete liquidated
damages, the parties acknowledging and agreeing
that the amount of damages which Seller may incur
as a result of such termination may be difficult
to ascertain and that the amount of the Xxxxxxx
Money is a reasonable and fair estimate thereof,
after which the parties shall have no further
rights or obligations hereunder.
19
e. In the event of the termination of this
Agreement by Purchaser under Paragraphs 17(a)(iii)
or (iv) or under Paragraph 17(a)(v) in the event
the Closing has failed to occur as of a material
breach by Seller of its obligations hereunder,
Purchaser shall have the right as Purchaser's sole
and exclusive remedies either to (i) terminate
this Agreement and demand the return of its
Xxxxxxx Money after which neither party shall have
any further rights or obligations hereunder or
(ii) seek specific performance of Seller's
obligations hereunder.
EMPLOYEE BENEFITS
18. At Closing, Seller shall terminate all of the
Facility employees and pay to Purchaser or, at the
option of Purchaser, directly to the employees of
the Facility, all earned and accrued vacation pay,
sick pay, holiday pay and other benefits due to
and/or coming due to any such employees of the
Facility as of or subsequent to the Closing Date,
but only in the case of those employees hired by
Purchaser effective as of the day after the
Closing Date, and Purchaser shall pay the same to
such employees after Closing as and when due. In
order to facilitate Purchaser's compliance with
the provisions of this Paragraph 18, at Closing,
Seller shall deliver to Purchaser a schedule which
reflects by employee earned and accrued vacation,
sick pay, holiday pay and other benefits (the
"Benefits Schedule"). In the case of any of the
employees not hired by Purchaser, Seller shall be
obligated to pay any and all earned and accrued
vacation pay, sick pay, holiday pay and other
benefits due to and/or coming due to any such
employees.
Seller and Purchaser acknowledge and agree
that the provisions of this Paragraph 18 shall not
be applicable in the event Seller has not hired
any employees as of the Closing Date.
RESIDENT SECURITY DEPOSITS
19. 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.
20. On the Closing Date, Seller shall transfer the
Resident Deposits to the bank account designated
by the Purchaser and Purchaser shall in writing
acknowledge 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.
21. 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 Paragraph
21 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.
20
Seller and Purchaser acknowledge and agree
that the provisions of Paragraphs 19-21 shall not
be applicable in the event Seller has not admitted
any residents or accepted deposits from
prospective residents as of the Closing Date.
NOTICES
22. Any notice, request or other communication to
be given by any party hereunder shall be in
writing and shall be sent by registered or
certified mail, postage prepaid, by overnight
courier. guaranteeing overnight delivery or by
facsimile transmission (if confirmed verbally or
in writing by mail as aforesaid), to the following
address:
To Seller: Sunday Estates
c/o LSP Incorporated
000 X. Xxxxxx Xxxxx Xxxxx 0000
Xxx Xxxxx, XX 00000
Attn: Xx. Xxxxx Jariv
Phone No.: (000) 000-0000
FAX No. : (702) 00 0-000 0
To Purchaser: Emeritus Corporation
Market Place One
0000 Xxxxxxx Xxxxxx Xxxxx 000
Xxxxxxx, XX 00000
Phone No.: (000) 000-0000
FAX No.: (000) 000-0000
Notice shall be deemed given three (3)
business days after deposit in the mail, on the
next day if sent by overnight courier and on
receipt if sent by facsimile (and confirmed
verbally or by mail as aforesaid).
SOLE AGREEMENT
23. 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.
SUCCESSORS
24. The terms of this Agreement shall be binding
upon and inure to the benefit of and be
enforceable by and against the heirs and
successors of the parties hereto, it being
specifically understood and agreed that Purchaser
shall have the right to assign in whole or in part
its rights and obligations hereunder to an
affiliate; provided no such assignment shall
relieve Purchaser of its obligations hereunder and
provided, further, that Purchaser shall provide
Buyer with notice of any such assignment and such
assignee shall assume all of Purchaser's
obligations hereunder in writing. In addition,
Purchaser shall have the right, on written notice
to Seller, to assign its rights hereunder to a
real estate investment trust (the "REIT") in
connection with its financing of the transaction
provided for herein, it being understood and
agreed that in the event of such an assignment,
the only right
21
which the REIT will assume is Purchaser's right to
take title to the Seller's Assets and the only
obligation which the REIT will assume is
Purchaser's obligation to pay the purchase price
in accordance with the terms hereof and that, in
any event, Purchaser shall not be relieved of any
of its obligations hereunder in the event of such
an assignment.
CAPTIONS
25. The captions of this Agreement are for
convenience of reference only and shall not define
or limit any of the terms or provisions hereof.
SURVIVAL/LIMITATION OF ACTIONS
26. All covenants, warranties and representations
of Purchaser and Seller herein other than Seller's
representation and warranty in Paragraph 7(I),
which shall survive for the applicable statute of
limitations period, shall survive for two years
after Closing after which they shall automatically
expire; provided, however, that in the event
notice of a claim is delivered by Seller or
Purchaser prior to expiration of said two year
period or applicable statute of limitation period
in the case of a claim brought under Paragraph
7(1), the representation, warranty or covenant
which is the subject of said claim shall survive
until the final, non-appealable resolution
thereof.
GOVERNING LAW
27. This Agreement shall be governed by and
construed in accordance with the laws of the State
of Nevada.
SEVERABILITY
28. Should any one or more of the provisions of
this Agreement be determined to be invalid,
unlawful or unenforceable in any respect, the
validity, legality and enforceability of the
remaining provisions hereof shall not in any way
be affected or impaired thereby.
COUNTERPARTS
29. 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. This
Agreement may be executed (i) on an original, (ii)
a copy of an original, or (iii) by a facsimile
transmission copy of an original followed within
five (5) calendar days with execution of an
original.
THIRD PARTY BENEFICIARY
30. The provisions of this Agreement are not
intended to confer any benefits upon any person or
entity not a party to this Agreement.
22
ACCOUNTS RECEIVABLE
31. Within ten days prior to the Closing Date,
Seller shall provide Purchaser with a detailed
listing of Seller's accounts receivable which are
anticipated to be outstanding on the Closing Date.
32. From and after the Closing Date, Purchaser
shall assume responsibility for the billing for
and collection of payments on account of services
rendered or goods sold by it on and after the
Closing Date and Seller shall retain all right,
title and interest in and to and all
responsibility for the collection of its accounts
receivable for services rendered or goods sold
prior to the Closing Date.
33. Any payments received by Purchaser after the
Closing Date from residents with balances due for
the period prior to and after the Closing Date,
shall be applied by Purchaser first to reduce any
post-Closing Date balances, with the excess, if
any, remitted to Seller to reduce any pre-Closing
Date balances due.
34. Seller shall have the right during normal
business hours and on reasonable notice to
Purchaser to inspect Purchaser's books and records
with respect to the accounts receivable received
by it after the Closing Date from residents with
balances due as of the Closing Date.
Seller and Purchaser acknowledge and agree
that the provisions of Paragraphs 31-34 shall not
be applicable in the event Seller has not admitted
any residents or accepted deposits from
prospective residents as of the Closing Date:
IN WITNESS WHEREOF, the parties hereby
execute this Agreement as of the day and year
first set forth above.
SELLER: SUNDAY
ESTATES, INC.
By: /s/ Xxxxx Jariv
--------------------------------------
Its: Vice President
PURCHASER: EMERITUS
CORPORATION
By: /s/ Xxxxxxx X. Brandstom
---------------------
------------------
Its: President
By: /s/ Xxxxxx X. Xxxx
---------------------
------------------
Its: Chairman
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