EXHIBIT 10.62
Purchase and Sale Agreement
dated December 19, 2003
PURCHASE AND SALE AGREEMENT
by and among
Riverchase Assisted Living, Ltd.
Senior Lifestyle Heritage, L.L.C.
Integrated Management - Xxxxxxxxxx Pointe, L.L.C.
Integrated Living Communities of West Palm Beach, L.L.C.
Senior Lifestyle Newport Limited Partnership
Senior Lifestyle Pinecrest Limited Partnership
Senior Lifestyle Prosperity Limited Partnership
Integrated Living Communities of Sarasota, L.L.C.
Olympia Fields Senior Housing, L.L.C.
Senior Lifestyle East Bay Limited Partnership
Senior Lifestyle Emerald Bay Limited Partnership
Greenwich Bay, L.L.C.
Senior Lifestyle North Bay Limited Partnership
Senior Lifestyle Sakonnet Bay Limited Partnership
South Bay Manor, L.L.C.
West Bay Manor, L.L.C. and
Integrated Living Communities of Dallas, L.P.
collectively, as Sellers,
and
CNL Retirement Corp., a Florida corporation,
as Purchaser
December 19, 2003
TABLE OF CONTENTS
PAGE
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SECTION 1. DEFINITIONS...................................................................... 2
SECTION 2. PURCHASE-SALE AND LEASE; DUE DILIGENCE; CONDEMNATION AND CASUALTY................ 15
2.1 Purchase-Sale and Lease............................................................... 15
2.2 Diligence Inspections................................................................. 15
2.3 Title Matters......................................................................... 15
2.4 Survey................................................................................ 16
2.5 Environmental Reports................................................................. 16
2.6 Condemnation.......................................................................... 17
2.7 Casualty.............................................................................. 17
SECTION 3. PURCHASE AND SALE; DEPOSIT....................................................... 19
3.1 Closing............................................................................... 19
3.2 Purchase Price........................................................................ 19
3.3 Deposit............................................................................... 19
3.4 Sellers' Closing Documents............................................................ 19
3.5 Purchaser Closing Documents........................................................... 21
SECTION 4. CONDITIONS TO PURCHASER'S OBLIGATION TO CLOSE.................................... 22
4.1 Representations and Warranties of Sellers True........................................ 22
4.2 Sellers' Performance.................................................................. 23
4.3 Title Policies........................................................................ 23
4.4 Permits............................................................................... 23
4.5 No Bankruptcy......................................................................... 23
4.6 Approval of Lenders................................................................... 23
4.7 Approval of Unit Holders.............................................................. 23
SECTION 5. CONDITIONS TO SELLERS' OBLIGATION TO CLOSE....................................... 24
5.1 Representations and Warranties True................................................... 24
5.2 Purchaser's Performance............................................................... 24
5.3 Permits............................................................................... 25
5.4 Approval of Lenders................................................................... 25
SECTION 6. REPRESENTATIONS AND WARRANTIES OF SELLERS; PURCHASER'S INDEPENDENT
INVESTIGATION; ACCESS............................................................ 25
6.1 Representation and Warranties of Sellers.............................................. 25
6.2 Purchaser's Independent Investigation................................................. 29
TABLE OF CONTENTS (CONTINUED)
PAGE
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6.3 Access................................................................................ 31
SECTION 7. REPRESENTATIONS AND WARRANTIES OF PURCHASER...................................... 31
7.1 Organization and Authorization........................................................ 31
7.2 No Consents........................................................................... 31
7.3 No Conflicting Agreements............................................................. 31
7.4 Litigation............................................................................ 31
SECTION 8. INTERIM OPERATION OF THE PROPERTIES.............................................. 32
8.1 Compliance with Laws and Permitted Encumbrances....................................... 32
8.2 Assumption of Loans................................................................... 32
8.3 General Operation..................................................................... 32
8.4 Maintenance and Renovation Contracts.................................................. 32
8.5 Cherry Hills Club Internal Change of Ownership........................................ 33
8.6 Natural Hazard Report for California Properties....................................... 33
8.7 Audits of the Properties and Operations............................................... 33
SECTION 9. COVENANTS OF PURCHASER........................................................... 34
9.1 Property Transferees.................................................................. 34
9.2 Assumption of the Loans............................................................... 34
SECTION 10. APPORTIONMENTS................................................................... 36
10.1 Apportionments........................................................................ 36
10.2 Closing Costs......................................................................... 36
SECTION 11. REMEDIES FOR PRE-CLOSING AND POST-CLOSING DEFAULTS............................... 38
11.1 Purchaser's Remedies for Pre-Closing Default.......................................... 38
11.2 Sellers' Remedy for Pre-Closing Default............................................... 39
11.3 Limitations on Purchaser's Post-Closing Claims........................................ 40
11.4 Survival of Purchaser's Claims........................................................ 40
11.5 Limitations on Sellers' Post-Closing Claims........................................... 41
11.6 Survival of Seller's Claims........................................................... 41
11.7 Limitations on Liability.............................................................. 42
11.8 Survival.............................................................................. 42
SECTION 12. MISCELLANEOUS.................................................................... 42
12.1 Drafts not an Offer to Enter into a Legally Binding Contract.......................... 42
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TABLE OF CONTENTS (CONTINUED)
PAGE
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12.2 Brokerage Commissions................................................................. 42
12.3 Publicity............................................................................. 43
12.4 Notices............................................................................... 43
12.5 Waivers, Etc.......................................................................... 45
12.6 Assignment; Successors and Assigns.................................................... 45
12.7 Severability.......................................................................... 45
12.8 Counterparts, Etc..................................................................... 46
12.9 Governing Law; Jurisdiction; Waiver of Jury Trial..................................... 46
12.10 Performance on Business Days.......................................................... 47
12.11 Attorneys' Fees....................................................................... 47
12.12 Relationship.......................................................................... 47
12.13 Section and Other Headings............................................................ 47
12.14 Disclosure............................................................................ 47
12.15 Acknowledgment of the Financial Condition of the Parties.............................. 47
12.16 Cross-Default with Niles Sale Agreement............................................... 48
12.17 Waiver Regarding California Property.................................................. 48
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LIST OF SCHEDULES
Schedule A Description of Properties and Sellers
Schedule B Allocation of Purchase Price
Schedule C List of Due Diligence Materials
Schedule D FF& E Schedule
Schedule E-1 Form of Lease
Schedule E-2 Form of Memorandum of Lease
Schedule F Allocation of Aggregate Shortfall Reserve Fund
Schedule G List of Lenders and Loan Documents for
each Property, together with Estimated
Principal Balance as of December 31, 2003
under each Loan and Required Reserve/Escrow
Balances and Required Additional Security
Schedule H-1 Form of Management Agreement
Schedule H-2 Form of Manager Subordination
Schedule H-3 Form of Pooling Agreement
Schedule I List of Motor Vehicles and Description of Motor Vehicle Leases
Schedule J-1 through J-19 Legal Description of each Property
Schedule K List of Renovation Contracts
Schedule L Description of Emerald Bay Refinancing Terms
Schedule M-1 Form of Special Warranty Deed - Alabama
Schedule M-2 Form of Special Warranty Deed - Arizona
Schedule M-3 Form of Grant Deed - California
Schedule M-4 Form of Special Warranty Deed - Florida
Schedule M-5 Form of Special Warranty Deed - Illinois
Schedule M-6 Form of Quitclaim Deed - Rhode Island
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Schedule M-7 Form of Special Warranty Deed - Texas
Schedule N Form of Assignment and Assumption of Contracts
Schedule O Form of Assignment and Assumption of Intangible Property
Schedule P Form of Assignment and Assumption of Occupancy Agreements
Schedule Q Form of Xxxx of Sale
Schedule R Form of Cherry Land Sale Contract Assignment and Assumption
Schedule S Schedule of Non-Terminable Contracts
Schedule T Litigation Matters
Schedule U List of Environmental Reports
Schedule V Purchaser and Property Transferees Organizational Chart
v
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is made effective
as of December 19, 2003 (the "Effective Date"), by and among (i) (1) Riverchase
Assisted Living, Ltd., a Texas limited partnership, (2) Senior Lifestyle
Heritage, L.L.C, a Delaware limited liability company, (3) Integrated Management
- Xxxxxxxxxx Pointe, L.L.C., a Delaware limited liability company, (4)
Integrated Living Communities of West Palm Beach, L.L.C. , a Delaware limited
liability company, (5) Senior Lifestyle Newport Limited Partnership, a Delaware
limited partnership, (6) Senior Lifestyle Pinecrest Limited Partnership, a
Delaware limited partnership, (7) Senior Lifestyle Prosperity Limited
Partnership, a Delaware limited partnership, (8) Integrated Living Communities
of Sarasota, L.L.C., a Delaware limited liability company, (9) Olympia Fields
Senior Housing, L.L.C., a Delaware limited liability company, (10) Senior
Lifestyle East Bay Limited Partnership, a Delaware limited partnership, (11)
Senior Lifestyle Emerald Bay Limited Partnership, a Delaware limited
partnership, (12) Greenwich Bay, L.L.C., a Delaware limited liability company,
(13) Senior Lifestyle North Bay Limited Partnership, a Delaware limited
partnership, (14) Senior Lifestyle Sakonnet Bay Limited Partnership, a Delaware
limited partnership, (15) South Bay Manor, L.L.C., a Delaware limited liability
company, (16) West Bay Manor, L.L.C., and (17) Integrated Living Communities of
Dallas, L.P., a Delaware limited partnership (each a "Seller" and collectively,
"Sellers"), and (ii) CNL Retirement Corp., a Florida corporation ("Purchaser").
W I T N E S S E T H:
WHEREAS, Sellers (this and other capitalized terms used and not
otherwise defined in the Preamble having the meanings ascribed to such terms in
Section 1) are the respective owners of the nineteen (19) senior living
facilities more particularly described on SCHEDULE A attached hereto and by this
reference made a part hereof (all defined as "Property" herein); and
WHEREAS, Purchaser is a Florida corporation that serves as advisor to
CNL Retirement Properties, Inc., a Maryland corporation (the "REIT"), and enters
into this Agreement with the interest of assigning its rights hereunder to
Affiliates of the REIT (each a "Property Transferee") that will each purchase
one or more of the Properties and thereby acquire all of Sellers' right, title
and interest in and to the Properties, with each Property Transferee entering
into a lease back to its respective Seller, as tenant, in its capacity as tenant
under such lease (in such capacity as a tenant, each a "Tenant" and
collectively, "Tenants"), with respect to each of the nineteen (19) Properties
pursuant to which each Tenant will be ultimately responsible for services
associated with the independent living, special care and/or skilled nursing, as
applicable, units on the leased Property and with each Tenant, entering into one
of nineteen (19) separate Management Agreements with Manager as to such Tenant's
leased Property pursuant to which Manager will provide property management and
ancillary services to each of the Properties, all pursuant to the terms and
conditions hereinafter set forth; and
WHEREAS, Sellers desire to sell to the Property Transferees the
Properties and thereby convey all of their respective right, title and interest
in the Properties, upon the terms and conditions hereinafter set forth; and
WHEREAS, each Seller desires to lease the Properties back from the
Applicable Property Transferees and to contract with Manager for property
management and ancillary services to each of the Properties.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the mutual receipt and
legal sufficiency of which are hereby acknowledged, Sellers and Purchaser hereby
agree as follows:
SECTION 1. DEFINITIONS.
Capitalized terms used in this Agreement and not defined elsewhere
herein shall have the meanings set forth below, in the Section of this Agreement
referred to below, or in such other document or agreement referred to below:
"Act of Bankruptcy" shall mean: (i) if a party hereto or any general
partner thereof shall (a) apply for or consent to the appointment of, or the
taking of possession by, a receiver, custodian, trustee or liquidator of itself
or all of or a substantial part of its property; (b) admit in writing its
inability to pay its debts as they become due; (c) make a general assignment for
the benefit of its creditors; (d) file a voluntary petition or commence a
voluntary case or proceeding under the Federal Bankruptcy Code (as now or
hereafter in effect); (e) be adjudicated a bankrupt or insolvent; (f) file a
petition seeking to take advantage of any other law relating to bankruptcy,
insolvency, reorganization, winding-up or composition or adjustment of debts;
(g) fail to controvert in a timely and appropriate manner, or acquiesce in
writing to, any petition filed against it in an involuntary case or proceeding
under the Federal Bankruptcy Code (as now or hereafter in effect); or (h) take
any corporate or partnership action for the purpose of effecting any of the
foregoing; or (ii) if the proceeding or case shall be commenced, without the
application or consent of a party hereto or any general partner thereof in any
court of competent jurisdiction seeking (1) the liquidation, reorganization,
dissolution or winding-up, or the composition or readjustment of debts, of such
party or general partner; (2) the appointment of a receiver, custodian, trustee
or liquidator for such party or general partner or all or any substantial part
of its assets; or (3) other similar relief under any law relating to bankruptcy,
insolvency, reorganization, winding-up or composition or adjustment of debts,
and such proceeding or case shall continue undismissed; or (iii) an order
(including an order for relief entered in an involuntary case under the Federal
Bankruptcy Code, as now or hereinafter in effect), judgment or decree approving
or ordering any of the foregoing shall be entered and continue unstayed and in
effect, for a period of sixty (60) consecutive days.
"Access Agreement" shall mean that certain Access Agreement dated as of
December 1, 2003 by and between WHSLH Realty, L.L.C., on behalf of Sellers, and
Purchaser.
"Additional Deposit" shall mean an additional deposit consisting of a
cash payment in the amount of Thirteen Million Dollars ($13,000,000).
"Additional Exception" shall have the meaning given such term in
Section 2.3(b).
"Affiliate" shall mean any Person owned by, under common control with
or controlled, directly or indirectly, by another Person. For the purposes of
this Agreement, an "Affiliate" shall also mean and include a parent Entity, or
the Person which controls (directly or indirectly) another Person.
"Aggregate Shortfall Reserve Fund" shall mean the sum of Fifteen
Million Dollars ($15,000,000), which represents the aggregate shortfall reserve
balance under the lease
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contemplated by the Niles Sale Agreement and the Leases (defined as the
Aggregate Shortfall Reserve Fund Amount under the Pooling Agreement). Each
Seller and the seller under the Niles Sale Agreement shall fund upon Closing on
its respective Property its allocated portion of the Aggregate Shortfall Reserve
Fund as such amount is allocated in SCHEDULE F. No Seller nor the seller under
the Niles Sale Agreement shall be obligated to fund another Seller's or the
seller's under the Niles Sale Agreement allocated portion of the Aggregate
Shortfall Reserve Fund if the Closing on such other Seller's Property or the
property to be sold under the Niles Sale Agreement does not occur.
"Agreement" shall mean this Purchase and Sale Agreement, together with
all Schedules attached hereto, as it and they may be amended from time to time
as herein provided.
"Alabama Property" shall mean the Property known as The Park at
Riverchase located at 0000 Xxxx Xxxxx, Xxxxxx, XX 00000.
"Allocated Purchase Price" shall mean the purchase price allocated to
each Property as set forth in SCHEDULE B attached hereto. The Allocated Purchase
Price for each Property shall be allocated between Real Property, Improvements,
and Assets, and the parties hereto agree to negotiate in good faith and agree to
such allocation at least seven (7) Business Days prior to the scheduled Closing
Date.
"Applicable Laws" shall mean any and all presently existing and future
judicial decisions, statutes, rulings, rules, regulations, permits,
certificates, requirements or ordinances of any Governmental Authority
applicable to each Property.
"Applicable Property Transferee" shall mean, with respect to each
Property, the Property Transferee that acquires title to such Property at the
Closing. The Applicable Property Transferee for each Property shall be
determined by Purchaser within the time period described in Section 9.1.
"Assignment and Assumption of Contracts" shall have the meaning given
such term in Section 3.4(b).
"Arizona Property" shall mean the Property known as The Heritage
Palmeras located at 00000 X. Xxxxxxxx Xxxxx, Xxx Xxxx, XX 00000.
"As-Built Drawings" shall mean, with respect to each Property, the
final "as-built" plans and specifications for the Improvements located on such
Property, which are to be furnished by Sellers (if available) to the Applicable
Property Transferees pursuant to Section 3.4 of this Agreement.
"Assets" shall mean, with respect to each Property, all of the FF&E,
the Contracts and the Intangible Property, collectively, owned as of the Closing
Date by Seller in connection with or relating to such Property, other than any
Excluded Assets.
"Assumption Documents" shall have the meaning given such term in
Section 9.2(c).
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"Business Day" shall mean any day other than a Saturday, Sunday or any
other day on which banking institutions in the State of New York are authorized
by law or executive action to close.
"California Properties" shall mean collectively, the Xxxxxxxxxx Pointe
Property and the Cherry Hills Club Property.
"Cap Amount" shall have the meaning given such term in Section 11.3.
"Xxxxxxxxxx Pointe Property" shall mean the Property known as
Xxxxxxxxxx Pointe located at 0000 X. Xxxxxxxx, Xxxxxx, XX 00000.
"Casualty Extended Closing Date" shall mean nine (9) months from the
date of the Casualty Notice.
"Casualty Notice" shall have the meaning given such term in Section
2.7(a).
"Change Notice" shall have the meaning given such term in Section 6.1.
"CHCP Seller" shall mean the owner of the Cherry Hills Club Property as
of the Closing Date.
"Cherry Hills Club Property" shall mean the Property known as Cherry
Hills Club located at 00000 Xxxxxx Xxxx., Xxx Xxxx, XX 00000.
"Cherry Land Sale Contract" shall mean that certain Agreement of
Purchase and Sale and Tenant Escrow Instructions (Sun City) dated May 9, 2003 by
and between Integrated Management - Xxxxxxxxxx Pointe, L.L.C., as Seller, and
Stonegate Development I, LLC, as purchaser, as amended by First Amendment to
Agreement of Purchase and Sale and Tenant Escrow Instructions dated June 30,
2003, as such agreement may be amended and/or assigned from time to time after
the Effective Date.
"Cherry Land Sale Contract Assignment and Assumption Agreement" shall
have the meaning given such term in Section 3.4(s).
"Claims" shall have the meaning given such term in Section 11.3.
"Claim Notice" shall have the meaning given such term in Section 11.3.
"Closing" shall have the meaning given such term in Section 3.1.
"Closing Date" shall have the meaning given such term in Section 3.1.
"Closing Documents" shall have the meaning given such term in Section
11.3.
"CNL RHB" shall mean, CNL Retirement HB2, LP, a to-be-formed Delaware
limited partnership, which will be the direct or indirect parent entity of all
the Property Transferees.
"COBRA" shall have the meaning given such term in Section 6.1(l).
4
"Condemnation Notice" shall have the meaning given such term in Section
2.6.
"Confidentiality Agreement " shall mean that certain Confidentiality
Agreement dated as of October 22, 2003 by and between WHSLH Realty, L.L.C., on
behalf of Sellers, and Purchaser.
"Contracts" shall mean, (a) equipment leases relating to any Property
and to which a Seller or its Affiliate is a party, (b) Motor Vehicle Leases, (c)
Renovation Contracts, ), (d) Third-Party Leases, and (e) any service or other
contracts relating to any Property and to which a Seller or its Affiliate is a
party which are disclosed in writing to Purchaser on or before the Closing, are
acceptable to Purchaser in Purchaser's reasonable discretion, and are to survive
the Closing; provided that Purchaser shall not require any Seller to terminate
any Motor Vehicle Lease, Renovation Contract or Third-Party Lease, and Purchaser
shall be responsible for any termination fees incurred by Sellers relating to
any Contract which Purchaser requires a Seller to terminate at Closing. The
Contracts shall be assigned to the Applicable Property Transferees, but such
assignment shall be effective only upon the Applicable Property Transferee's
election following the occurrence of an Event of Default as defined in the
Leases, all as described in and subject to the terms of the Assignment and
Assumption of Contracts. Each Contract payment incurred in respect of Contract
performance after Closing shall be paid by Manager as a pass-through expense
under the applicable Management Agreement but all payments under the Renovation
Contracts due on or after Closing shall be funded from the RC Escrow Account and
shall be the sole liability of the applicable Tenant, subject to the terms of
Section 8.4.
"Controlling Interest" shall mean: (a) as to a corporation, the right
to exercise, directly or indirectly, more than fifty percent (50%) of the voting
rights attributable to the shares of the Entity (through ownership of such
shares or by contract), and (b) as to an Entity not a corporation, the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of the Entity.
"Damaged Property" shall have the meaning given such term in Section
2.7(a).
"Deposit" shall mean collectively, the Initial Deposit and the
Additional Deposit.
"Due Diligence Commencement Date" shall mean November 26, 2003.
"Due Diligence Materials" shall mean all of the documents and other
materials delivered, or otherwise made available for inspection, including at
Sellers' offices, to Purchaser and its Representatives and on-site materials and
financial statements delivered to Purchaser and its Representatives for
inspection, under the Confidentiality Agreement, including the materials
described or listed in SCHEDULE C hereto which may be supplemented on or before
the Closing Date to reflect any additional materials delivered to Purchaser and
its Representatives.
"Due Diligence Payment" shall mean One Million Dollars ($1,000,000.00).
"Due Diligence Period" shall mean the period commencing on the Due
Diligence Commencement Date and ending at 5 p.m. EST on December 30, 2003.
5
"East Bay Manor Property" shall mean the Property known as East Bay
Manor located at 0000 Xxxxxxxxx Xxxxx, Xxxx Xxxxxxxxxx, XX 00000.
"Effective Date" shall have the meaning set forth in the preamble to
this Agreement.
"Emerald Bay Manor Property" shall mean the Property known as Emerald
Bay Manor located at 00 Xxx Xxxxxxx Xxxx Xxxx, Xxxxxxxxxx, XX 00000.
"Entity" shall mean any corporation, general or limited partnership,
limited liability company, partnership, stock company or association, joint
venture, company, trust, bank, trust company, land trust, business trust,
cooperative, any government or agency or political subdivision thereof or any
other entity.
"Environmental Reports" shall have the meaning given such term in
Section 2.5.
"Excluded Assets" shall mean, with respect to each Property: (i) any
right, title or interest in the names "Horizon Bay" or "Horizon Bay Senior
Communities" or any combination or variation thereof or any other trademark or
trade name filed by Manager (and Manager and its Affiliates shall have the right
to remove any such name or xxxx appearing on any signage or other property
pursuant and subject to the terms of the Management Agreement); (ii) all
property owned by Seller or any of its Affiliates, not normally located at the
Property and used, but not exclusively, in connection with the operation of the
Properties; (iii) all items, tangible or intangible, consisting of Proprietary
Information; (iv) computer software and accompanying documentation (including
all future upgrades, enhancements, additions, substitutions and modifications
thereof), which are used by Seller or any Affiliate thereof in connection with
the property management system and all future electronic systems developed by
Seller or any of its Affiliates for use with respect to the Property; (v) all
books, ledger sheets, files and records, but not any information therein
relating to the Properties except as otherwise excluded hereunder; (vi) all
contracts pertaining to the operation of the Property other than the Contracts;
and (vii) any software, manuals, brochures or directives used by Seller or any
of its Affiliates, in the operation of the Property (not including data
regarding the Properties as opposed to Property operations), and (viii) any
Motor Vehicles owned, rather than leased, by Sellers or its Affiliates provided
that such Motor Vehicles shall be delivered to the Applicable Property
Transferee or its designee upon the election of the Applicable Property
Transferee following an Event of Default (as defined in the Lease) under the
terms and conditions specified in the Lease.
"Extended Casualty Security Amount" shall have the meaning given such
term in Section 2.7(a).
"FAS" means supply items included within "Property and Equipment" under
GAAP, including, but not limited to, linen, china, glassware, silver, uniforms,
and similar items, whether used in connection with public space or in resident
rooms.
"FF&E" shall mean, with respect to each Property, all appliances,
machinery, devices, fixtures, appurtenances, equipment, furniture, furnishings
and articles of tangible personal property of every kind and nature whatsoever
owned by each applicable Seller or any of their Affiliates, and located in or
at, or used in connection with the ownership, operation or maintenance of, such
Property, other than Motor Vehicles, but in any event excluding any
6
Excluded Assets. FF&E shall include, but not limited to: (a) all equipment,
machinery, fixtures, and other items of property, now or hereafter permanently
affixed to or incorporated into each Property, including, without limitation,
all furnaces, boilers, heaters, electrical equipment, heating, plumbing,
lighting, ventilating, refrigerating, incineration, air and water pollution
control, waste disposal, air-cooling and air-conditioning systems and apparatus,
sprinkler systems and fire and theft protection equipment, all of which, to the
maximum extent permitted by law, are hereby deemed by the parties hereto to
constitute real estate, together with all replacements, modifications,
alterations and additions thereto; (b) all furniture, furnishings, movable walls
or partitions, moveable machinery, moveable equipment, computers or trade
fixtures or other personal property of any kind or description used or useful in
the business on or in each Property, and located on or in each Property, and all
modifications, replacements, alterations and additions to such personal
property; (c) the FAS; and (d) and all other tangible personal property used in
connection with the operation, ownership, or maintenance of each Property (as
such terms are customarily used and defined in the most broad and inclusive
sense).
"FF&E Schedule" shall mean the schedule of all FF&E (excluding fixtures
and the FAS) at each Property owned by each Seller and which FF&E is intended to
be part of the Assets to be transferred to and owned by the Applicable Property
Transferees upon and following the Closing as further described in SCHEDULE D
attached hereto, which schedule shall be prepared by Sellers based on an
internal inventory to be performed by the Property-based employees and delivered
by Sellers not less than five (5) Business Days prior to Closing.
"Florida Properties" shall mean collectively: (i) the Heron's Run
Property, (ii) the Newport Place Property, (iii) the Pinecrest Place Property,
(iv) the Prosperity Oaks Property, (v) The Pointe at Newport Place Property, and
(vi) the Waterside Retirement Estates Property.
"Final Extended Closing Date" shall mean June 30, 2004.
"GAAP" means Generally Accepted Accounting Principles as adopted by the
American Institute of Certified Public Accountants, consistently applied.
"Governmental Authority" shall mean any federal, state, county or
municipal government, or political subdivision thereof, any governmental agency,
authority, board, bureau, commission, department, instrumentality, or public
body, or any court or administrative tribunal.
"Greenwich Bay Manor Property" shall mean the Property known as
Greenwich Bay Manor located at 000 Xxxx Xxxxxx, Xxxxxxxxx, XX 00000.
"Hazardous Materials" shall mean materials, wastes or substances that
are (i) included within the definition of any one or more of the terms
"hazardous substances," "hazardous materials," "toxic substances," "toxic
pollutants" and "hazardous waste" in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (42 U.S.C. Sections 9601, et
seq.), the Resource Conservation and Recovery Act of 1976 (42 U.S.C. Section
6901, et seq.), the Clean Water Act (33 U.S.C. Section 1251, et seq.), the Safe
Drinking Water Act (14 U.S.C. Section 1401, et seq.), the Hazardous Materials
Transportation Act (49 U.S.C. Section 1801, et seq.) and the Toxic Substance
Control Act (15 U.S.C. Section 2601, et seq.) and the regulations promulgated
pursuant to such laws, (ii) regulated, or classified as hazardous or
7
toxic, under federal, state or local environmental laws or regulations, (iii)
petroleum or petroleum by-products, including gasoline and diesel, (iv) asbestos
or asbestos-containing materials, (v) polychlorinated biphenyls, (vi) flammable
explosives (vii) radioactive materials.
"Heron's Run Property" shall mean the Property known as Heron's Run
located at 0000 X. Xxxxxxxxx Xxxx, Xxxx Xxxx Xxxxx, XX 00000.
"Illinois Property" shall mean Park at Olympia Fields Property.
"Immaterial Taking" shall mean a taking of any portion of the land or
Improvements constituting a portion of the Real Property that would cost more
than the greater of One Million Dollars ($1,000,000) or seven and one-half
percent (7.5%) of the Allocated Purchase Price to rebuild the Improvements as
nearly as possible to the same (but not less than) economic unit as it
represented prior to the taking, and does not materially adversely affect access
to the Improvements (any taking which results in the loss of the primary access
route to the Improvements, whether such access is vehicular or pedestrian, is
materially adverse), or compliance with applicable zoning or building
requirements, including parking (any taking which results in the Improvements
not being able to be rebuilt upon the occurrence of a casualty is materially
adverse).
"Improvements" shall mean, with respect to each Property, all
buildings, fixtures, walls, fences, landscaping and other structures and
improvements situated on, affixed or appurtenant to the Real Property,
including, but not limited to, all pavement, access ways, curb cuts, parking,
kitchen and support facilities, meeting and conference rooms, swimming pool
facilities, recreational amenities, office facilities, drainage system and
facilities, air ventilation and filtering systems and facilities and utility
facilities and connections for sanitary sewer, potable water, irrigation,
electricity, telephone, cable television and natural gas, if applicable, to the
extent the same form a part of such Property and all appurtenances thereto
acquired by the Applicable Property Transferee in connection with Applicable
Property Transferee's acquisition of such Property pursuant to the terms of this
Agreement.
"Initial Deposit" shall mean a cash payment in escrow to the Title
Company in the amount of Four Million Dollars ($4,000,000).
"Intangible Property" shall mean, with respect to each Property, all
transferable or assignable (a) Permits, and (b) certificates, licenses,
warranties, guarantees and Contracts held by each Seller, as owner, and/or its
Affiliates, other than (x) the Excluded Assets and (y) such Permits which are to
be held by, or transferred to, each Seller, a tenant, and/or Manager in order to
permit each Tenant, and/or Manager, respectively, to operate or manage, as the
case may be, such Property in accordance with the terms of the Lease and the
Management Agreement.
"Inventories" shall mean "Inventories" as defined by GAAP such as, but
not limited to, provisions in storerooms, refrigerators, pantries and kitchens;
medical supplies; other merchandise intended for sale; fuel; mechanical
supplies; stationery; and other expensed supplies and similar items.
8
"Lease" shall mean, with respect to each Property, the "triple net"
lease agreement to be entered into at the Closing by the Applicable Property
Transferee and the applicable Tenant, substantially in the form attached hereto
as Schedule E-1.
"Lender" shall mean, with respect to each Property, the lender
identified on SCHEDULE G attached hereto.
"Lender Consent" shall have the meaning given such term in Section 4.6.
"Licensing Condition" shall have the meaning given such term in Section
4.4.
"Loan" means the loan evidenced by the Loan Documents relating to each
Property.
"Loan Assumption Costs" shall mean any and all costs, expenses or other
fees, including, without limitation, any review fees, transfer fees, assumption
fees, attorneys' fees and other costs, expenses and fees provided for in the
Loan Documents or charged by any Lender and/or any Rating Agency in connection
with such Lender's or Rating Agency's consent to the sale of the applicable
Property and the assignment and assumption of each Loan to Purchaser and/or the
Applicable Property Transferees.
"Loan Documents" shall mean the loan documents described in SCHEDULE G
attached hereto with respect for each Property.
"Manager" shall mean Horizon Bay Management, L.L.C., a Delaware limited
liability company.
"Manager Subordination" shall mean a form of Subordination Agreement of
Management Agreement and Management Fees to be executed by Manager in favor of
the landlord under each Lease, subordinating the Management Agreement and
Manager's right to receive management fees thereunder, but only if the
Properties' and the property to be sold under the Niles Sale Agreement cash flow
and the Aggregate Shortfall Reserve Fund are insufficient to pay the Leases' due
and accrued rent and any other amounts due landlord and only to the extent of
sixty percent (60%) of the total dollar value of the due and accrued management
fees, substantially in the form attached hereto as SCHEDULE H-2.
"Management Agreement" shall mean the applicable Management Agreement
to be entered into as of the Closing Date with respect to each Property, between
each Tenant, and Manager, pursuant to which Manager shall provide property
management and ancillary services to the applicable Property and shall receive a
management fee of five percent (5%) of the gross revenues of such Property,
substantially in the form attached hereto as SCHEDULE H-1. The Management
Agreement shall not be terminated or materially amended without the prior
written approval of the Applicable Property Transferee subject to and in
accordance with the terms of the Lease and the Manager Subordination.
"Memorandum of Lease" shall mean the applicable Memorandum of Lease to
be entered into as of the Closing Date with respect to each Property, between
the Applicable Property Transferee and the applicable Tenant, substantially in
the form attached hereto at SCHEDULE E-2
9
and if consented to by the Applicable Property Transferee and the applicable
Tenant, recorded among the applicable public records.
"Motor Vehicles" shall mean those motor vehicles, regardless of whether
leased or owned and described in SCHEDULE I attached hereto.
"Motor Vehicle Leases" shall mean the leases described on SCHEDULE I
pursuant to which certain Sellers and/or their respective Affiliates lease motor
vehicles in connection with the operation of their respective Properties.
"Natural Hazard Expert" shall have the meaning given such term in
Section 8.6.
"Newport Campus" shall mean, collectively, the Newport Place Property
and the Pointe at Newport Place Property.
"Newport Place Property" shall mean the Property known as Newport Place
located at 0000 X.X. Xxxxxxx Xxxxx, Xxxxxxx Xxxxx, XX 00000.
"Niles Sale Agreement" shall mean that certain Purchase and Sale
Agreement dated as of the Effective Date by and between Niles Lifestyle Limited
Partnership and Purchaser.
"Non-Performing Party" shall have the meaning given such term in
Section 11.7(a).
"Non-Terminable Contracts" shall have the meaning given such term in
Section 6.1(c).
"North Bay Manor" shall mean the Property known as North Bay Manor
located at 000 Xxxxxxxx Xxxx Xxxxxx, Xxxxxxxxxx, XX 00000.
"North Bay View Parcel" shall mean that certain parcel of vacant land
which is approximately three/fourths (3/4) of an acre (.74 acres) acquired by
Senior Lifestyle North Bay Limited Partnership on December 23, 2002 for Thirty
Two Thousand Five Hundred Dollars ($32,500) for the purpose of controlling North
Bay Manor's water view and which constitutes part of the North Bay Manor Real
Property.
"Occupancy Agreements" shall mean those leases, rental agreements,
license agreements and occupancy agreements pursuant to which an Occupant has a
possessory right or license with respect to any portion of the Real Property.
Occupancy Agreements shall not include Third-Party Leases.
"Occupant(s)" shall mean the non-commercial tenant(s), licensee(s) or
occupant(s) under any lease (other than the Lease relating to each Property),
license agreement or occupancy agreement in effect at any Real Property.
"Operating Statements" shall mean for each Property, the Property
statements of income and expenses of the Property for calendar year 2002, and
year-to-date quarterly statements of income and expenses for 2003 (including any
such subsequent statements issued prior to closing hereunder, including the
Property statements of income and expense for calendar year 2003, as soon as
they are available according to normal business practices).
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"Park at Olympia Fields Property" shall mean the Property known as The
Park at Olympia Fields located at 0000 Xxxxxxxx Xxxxx, Xxxxxxx Xxxxxx, XX 00000.
"Permits" shall mean, with respect to each Property, all governmental
permits and approvals, including licenses and authorizations, required for the
ownership and operation of the senior living facilities within and on the
Improvements, including without limitation healthcare regulatory licenses,
skilled nursing facility licenses, residential care for the elderly licenses,
assisted living licenses, occupational licenses and/or qualifications to do
business, certificates of need, certificates of authority, certificates of
occupancy, building permits, signage permits, site use approvals, zoning
certificates, environmental and land use permits, and any and all necessary
approvals from state or local authorities and other approvals granted by any
public body.
"Permitted Encumbrances" shall mean, with respect to each Property: (a)
any exceptions, exclusions and other matters set forth in or disclosed by the
Title Commitments in their form on the last day of the Due Diligence Period and
any other exceptions to title that would be disclosed by a survey of such Real
Property, including those disclosed on the Surveys in their form on the last day
of the Due Diligence Period; (b) liens for taxes, assessments and governmental
charges with respect to the Property not yet due and payable or due and payable
but not yet delinquent (provided the same are paid at Closing); (c) applicable
zoning regulations and ordinances and other governmental laws, ordinances and
regulations provided the same do not prohibit or impair in any material respects
the use of the Property either as it is currently being used or otherwise as an
senior living facility, as contemplated by this Agreement; (d) the Loan
Documents evidencing and securing the Loans; (e) any utility, drainage or other
easements which are customary in connection with (or which reasonably serve) the
Improvements (provided that the same do not lie under any building unless the
easements are not in use and not necessary for the Property or any adjacent or
other benefited property and can be vacated) and with respect to which there are
no material violations as of the Closing Date; (f) the Lease, Memorandum of
Lease, Management Agreement and Memorandum of Management Agreement for each
Property; and (g) with respect to the North Bay View Parcel, the unavailability
of title insurance only in the event Title Company declines to issue an owner's
title insurance policy in favor of Purchaser with respect to the North Bay View
Parcel (the applicable Seller covenants to join Purchaser's request for the
issuance of such title insurance), and (h) the Occupancy Agreements and
Third-Party Leases.
"Person" shall mean any natural person or Entity, and the heirs,
executors, administrators, legal representatives, successors and assigns of such
Person where the context so admits.
"Pinecrest Place Property" shall mean the Property known as Pinecrest
Place located at 0000 0xx Xxxxxx, X.X. Xxxxx, XX 00000.
"Pointe at Newport Place Property" shall mean the Property known as The
Pointe at Newport Place located at 0000 X.X. Xxxxxxx Xxxxx, Xxxxxxx Xxxxx, XX
00000.
"Pooling Agreement" shall mean the Pooling Agreement to be entered into
as of the Closing Date between Purchaser, and each Tenant and the seller under
the Niles Sale Agreement, as tenant, with the written joinder and consent of
Manager, solely as paying agent, pursuant to which (i) the revenues of all
Properties and the property to be sold under the Niles Sale Agreement and the
Aggregate Shortfall Reserve Fund will be available to pay all Properties'
11
operating expenses, including rent and any other amounts due landlord under the
Leases and management fees (subject to the Manager Subordination), (ii) the
Aggregate Lease Coverage Ratio (as defined in the Lease) will be calculated on
an aggregate basis across all Properties and the property to be sold under the
Niles Sale Agreement, (iii) each Tenant's net cash flow from the Properties,
after payment of all bona fide operating expenses (including required reserves
and management fees subject to the Manager Subordination) and rent and other
payments under the Leases shall, under certain circumstances be deposited to
replenish the Aggregate Shortfall Reserve Fund, (iv) the Aggregate Shortfall
Reserve Fund shall be held by Purchaser and disbursed for the benefit of
Purchaser and Manager, and (v) sixty percent (60%) of the management fees due to
Manager under the Management Agreements shall under the terms and conditions
specified in the Manager Subordination be subordinated to payment of other bona
fide operating expenses or rent due for the applicable Property and the property
to be sold under the Niles Sale Agreement, substantially in the form attached
hereto as SCHEDULE H-3.
"Property" shall mean any of the Real Property, Improvements and
Assets, inclusive, with respect to each of the Alabama Property, the Arizona
Property, the California Properties, the Florida Properties, the Illinois
Property, the Rhode Island Properties and the Treemont Property, as the case may
be and/or the context shall require. For the purposes of this Agreement, the
term "Properties" shall mean and refer to all of the foregoing collectively.
"Property Transferee" shall have the meaning given such term in the
Recitals.
"Proprietary Information" shall mean (a) all computer software and
accompanying documentation (including all future upgrades, enhancements,
additions, substitutions and modifications thereof), other than that which is
commercially available, which are used by any Seller or the Manager or any
Affiliate thereof in connection with the property management system and all
future electronic systems developed by any Seller or the Manager or any
Affiliate thereof for use with respect to any Property, (b) all manuals,
brochures and directives used by any Seller or the Manager or any Affiliate
thereof with respect to the procedures and techniques to be used in operating
any Property, and (c) employee records which must remain confidential either
under applicable legal requirements or under reasonable corporate policies of
any Seller or the Manager or any Affiliate thereof.
"Prosperity Oaks Property" shall mean the Property known as Prosperity
Oaks located at 00000 Xxxxxxxxxx Xxxxx Xxxx, Xxxx Xxxxx Xxxxxxx, XX 00000.
"Purchase Price" shall mean Five Hundred Thirteen Million Eight Hundred
Thousand Dollars ($513,800,000) which is the amount to be paid by Purchaser to
Sellers for the Properties, which shall be allocated amongst the Properties by
their Allocated Purchase Prices and between Real Property, Improvements and
Assets for each Property, all as set forth on SCHEDULE B hereto. The Purchase
Price also shall be subject to adjustments, credits and prorations as provided
herein.
"Purchaser" shall mean CNL Retirement Corp., a Florida corporation, and
its permitted successors and assigns.
"Purchaser Closing Documents" shall have the meaning given such term in
Section 11.5.
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"Rating Agency" shall mean Fitch, Inc., Xxxxx'x Investors Service, Inc.
and S&P, or any successor entity of the foregoing, or any other nationally
recognized statistical rating organization to the extent that any of the
foregoing have been or will be engaged by Lender or its designees in connection
with the assumption of a Loan.
"RC Escrow Account" shall have the meaning given such term in Section
8.4.
"Real Property" shall mean, with respect to each Property, the real
property described in the applicable SCHEDULES J-1 THROUGH J-19 hereto, together
with all easements, rights of way, privileges, licenses and appurtenances which
Seller may now own or hereafter acquire with respect thereto, less any portion
or portions thereof taken by way of an Immaterial Taking.
"REIT" shall have the meaning given such term in the Recitals.
"Renovation Contract" shall mean those contracts identified on SCHEDULE
K hereto between a Seller or an Affiliate thereof and a contractor pursuant to
which the contractor is performing renovations under the Horizon Bay Senior
Communities renovation program which is contemplated to be completed or paid
after the Closing.
"Rent Rolls" shall mean those certain rent rolls delivered or made
available to Purchaser or its Representatives as part of the Due Diligence
Materials, and as updated by Sellers as of the Closing Date.
"Representatives" shall mean an Entity's respective officers,
directors, partners, members, trustees, shareholders, controlling persons,
employees, agents, advisors, attorneys, potential lenders, Affiliates or
representatives.
"Rhode Island Properties" shall mean collectively: (i) East Bay Manor
Property, (ii) Emerald Bay Manor Property, (iii) Greenwich Bay Manor Property,
(iv) North Bay Manor Property, (v) Sakonnet Bay Manor Property, (vi) South Bay
Manor Property, and (vii) West Bay Manor Property.
"Sakonnet Bay Manor" shall mean the Property known as Sakonnet Bay
Manor located at 0000 Xxxx Xxxx, Xxxxxxxx, XX 00000.
"Second Security Amount" shall mean the lesser of (i) twenty percent
(20%) of the Allocated Purchase Price of any applicable Property, the sale of
which occurs after the initial Closing, (ii) Twenty Million Dollars
($20,000,000), or (iii) Seventeen Million Dollars ($17,000,000), provided that
this clause (iii) shall be operative only if Closing has not occurred under the
Niles Sale Agreement and the Title Company is holding a deposit of not less than
Three Million Dollars ($3,000,000) under the Niles Sale Agreement.
"Seller" shall mean, with respect to each Property, the Seller
identified on SCHEDULE A attached hereto. "Sellers" shall mean and refer to all
of Sellers identified on SCHEDULE A attached hereto.
"Sellers' Broker" shall have the meaning given such term in Section
12.2.
13
"Schedule of Non-Terminable Contracts" shall have the meaning given
such term in Section 6.1(c).
"South Bay Manor Property" shall mean the Property known as South Bay
Manor located at 0000 Xxxxxxxxx Xxxx, Xxxxx Xxxxxxxxx, XX 00000.
"Survey(s)" shall have the meaning given such term in Section 2.4.
"Survival Date" shall have the meaning given such term in Section 11.4.
"Tenant" shall have the meaning given such term in the Recitals.
"Termination Notice" shall have the meaning given such term in Section
2.2.
"Threshold Amount" shall have the meaning given such term in Section
11.3.
"Third-Party Costs" shall have the meaning given such term in Section
10.2(c).
"Third-Party Leases" shall mean leases, rental agreements, license or
other agreements between a Seller and third-party non-residential tenants or
licensees related to occupancy and use of a portion of the Properties, but shall
not include Occupancy Agreements.
"Title Commitments" shall have the meaning given such term in Section
2.3(a).
"Title Company" shall mean Fidelity National Title Insurance Company or
such other title insurance company as shall have been approved by Purchaser and
Sellers.
"Transaction Documents" have the meaning given such term in Section
12.15.
"Transfer Taxes " have the meaning given such term in Section 10.2(c).
"Treemont Property" shall mean the Property known as Treemont
Retirement Community located at 0000 Xxxxxxx Xxxx, Xxxxxx, XX 00000.
"Two Closing Extension Conditions " shall have the meaning given such
term at the end of Section 4.
"Two Closing Extension Right " shall have the meaning given such term
in Section 4.
"Unit Holder Consent" shall have the meaning given such term in Section
4.7.
"WARN Act " shall have the meaning given such term in Section 6.1(l).
"Waterside Retirement Estates Property" shall mean the Property known
as Waterside Retirement Estates located at 0000 Xxx Xxxxx Xxxx, Xxxxxxxx, XX
00000.
"West Bay Manor Property" shall mean the Property known as West Bay
Manor located at 0000 Xxxx Xxxxx Xxxx, Xxxxxxx, XX 00000.
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SECTION 2. PURCHASE-SALE AND LEASE; DUE DILIGENCE; CONDEMNATION AND CASUALTY.
2.1 Purchase-Sale and Lease. Purchaser hereby agrees to purchase from
Sellers and Sellers hereby agree to sell to Purchaser, the Properties for the
Purchase Price, subject to and in accordance with the terms and conditions of
this Agreement. Further, in consideration of the mutual covenants herein
contained, upon, and subject to, acquisition by Purchaser of the Properties,
Purchaser hereby agrees to simultaneously lease to Tenant, and Tenant, hereby
agrees to simultaneously lease back from Purchaser, each of such Properties
purchased by Purchaser, on the terms and conditions of the Lease applicable
thereto, and in accordance with the terms of this Agreement. Finally, in
consideration of the mutual covenants herein contained, Sellers hereby agree to
convey at the Closing to Purchaser the existing FAS associated with the
Properties and the existing Inventories located at the Properties, on the terms
and conditions set forth herein, provided that Sellers shall retain and the
Applicable Property Transferee shall have no obligation to fund or replace the
working capital associated with or set aside associated with the Properties at
the Closing, subject to the rights of the Tenants under the Leases to use the
Aggregate Shortfall Reserve Fund to fund Property post-Closing operating
expenses and utility and other deposits required at Closing (other than security
amounts described in the Assumption Documents or otherwise contemplated by the
Loan Documents) and provided that the Tenants shall have the benefit of the
prorations applicable to the period from and after the Closing Date.
2.2 Diligence Inspections. During the Due Diligence Period, Purchaser
shall conduct its due diligence investigations regarding the purchase of the
Properties. At any time prior to the expiration of the Due Diligence Period,
Purchaser shall have the right, in its sole and absolute discretion, and for any
or no reason whatsoever, to terminate this Agreement by written notice to
Sellers (the "Termination Notice") delivered on or prior to the expiration of
the Due Diligence Period and Purchaser shall receive a return of the Deposit. If
the Termination Notice is not delivered on or prior to the expiration of the Due
Diligence Period, Purchaser shall be deemed to have reviewed, accepted and
approved all of the Due Diligence Materials.
2.3 Title Matters.
(a) During the Due Diligence Period, Purchaser shall obtain
from the Title Company, at its sole cost and expense, a current title commitment
for an ALTA extended owner's policy with respect to each Property including the
North Bay View Parcel, together with complete and legible copies of all
instruments and documents referred to as exceptions to title (collectively, the
"Title Commitments"). Purchaser shall provide (or shall cause the Title Company
to provide) Sellers with a copy of the initial Title Commitments and all updates
thereto, including, within three (3) Business Days after the expiration of the
Due Diligence Period, the Title Commitments dated most recently prior to the
expiration of the Due Diligence Period. If Purchaser does not deliver the
Termination Notice during the Due Diligence Period, Purchaser will be deemed to
have approved all Permitted Encumbrances. Notwithstanding the foregoing, each
Seller shall cause all monetary liens not relating to the Loans or the Loan
Documents encumbering its Property (e.g., mechanics' liens) to be released at or
prior to the Closing; provided, however, such liens may continue to encumber the
Property at Closing if the Title Company is willing to insure over such liens in
a manner reasonably acceptable to Purchaser and such liens are released promptly
following the Closing. Each Seller's obligation to
15
cause the release of any such liens pursuant to the immediately preceding
sentence shall survive the Closing.
(b) In the event that any Seller decides to encumber its
Property with an additional title matter, such Seller shall give Purchaser
written notice thereof together with a copy of the document, instrument or other
matter to be imposed against or on the Property ("Additional Exception"). Within
five (5) Business Days after receipt of a notice (and a copy) of any Additional
Exception with respect to any Property, Purchaser shall give Seller notice of
its approval or disapproval thereof. Purchaser shall not withhold its approval
of any such Additional Exception which would qualify as a Permitted Encumbrance
specified in the definition of Permitted Encumbrance which does not have a
material adverse effect on the value or use of the Property by Purchaser, Tenant
or Manager. If Purchaser fails to respond within said five (5) Business Day
period, Purchaser shall be deemed to have approved such Additional Exception.
Notwithstanding any language to the contrary herein, Purchaser hereby consents
to the refinancing of Emerald Bay Manor provided (i) such refinancing conforms
to the terms set forth in SCHEDULE L and (ii) Purchaser receives notice of such
refinancing within three (3) Business Days of consummation and in any event
within the Due Diligence Period. Upon consummation of the Emerald Bay Manor
Property refinancing as contemplated by the terms of the immediately preceding
sentence or as otherwise reasonably approved by Purchaser, all Loan Documents in
connection therewith shall be deemed Permitted Exceptions. Notwithstanding
anything herein to the contrary, an Additional Exception shall not include any
monetary encumbrance not relating to the Loans or the Loan Documents encumbering
its Property (e.g., mechanics' liens) and the applicable Seller shall discharge
or cause the Title Company to insure over in a manner reasonably acceptable to
Purchaser all such monetary encumbrances on or before the Closing Date. No
consent or approval to any Additional Exception by Purchaser shall constitute an
agreement by Purchaser to pay any special assessment or other tax or levy
arising under such Additional Exception that would otherwise be payable by the
applicable Seller under this Agreement.
2.4 Survey. During the Due Diligence Period, Purchaser shall endeavor
to obtain, at its sole cost and expense, current as-built ALTA surveys with
respect to each Property (individually, a "Survey" and collectively, the
"Surveys"), by a licensed surveyor in the jurisdiction in which each such
Property is located. Purchaser shall provide (or shall cause the surveyors to
provide) Sellers with a copy of the initial Surveys and all updates thereto,
including, within five (5) Business Days after the expiration of the Due
Diligence Period, the surveys as most recently updated prior to the expiration
of the Due Diligence Period. If Purchaser does not deliver the Termination
Notice, Purchaser will be deemed to have accepted all matters set forth on the
Surveys.
2.5 Environmental Reports. During the Due Diligence Period, Purchaser
shall have the option to obtain, at its sole cost and expense, Phase I
environmental reports in respect of the Properties (collectively, "Environmental
Reports"). In the event Purchaser terminates this Agreement, Purchaser agrees to
provide Sellers with a copy of the initial Environmental Reports and all updates
thereto. If Purchaser does not deliver the Termination Notice, Purchaser will be
deemed to have accepted all matters set forth in the Environmental Reports.
16
2.6 Condemnation. If prior to Closing, any proceedings, judicial,
administrative or otherwise, which relate to a taking or proposed taking of any
portion of a Real Property by eminent domain, the applicable Seller shall
promptly notify Purchaser of the same (the "Condemnation Notice"). If such Real
Property is subject to an Immaterial Taking, the applicable Seller shall so
notify Purchaser pursuant to the Condemnation Notice and this Agreement will
remain in full force and effect, but at Closing the applicable Seller shall
assign all condemnation proceeds payable (but not yet paid as of Closing) to
Purchaser and to the extent that the applicable Seller has received any
condemnation proceeds prior to Closing, Seller shall xxxxx the Purchase Price by
an amount equal to the award paid to Seller on account of such taking. If such
condemnation is not an Immaterial Taking, Purchaser may elect within ten (10)
Business Days of its receipt of the Condemnation Notice, and the Closing Date
shall, if necessary, be extended to give Purchaser the benefit of the entire ten
(10) Business Day period, either (i) to terminate this Agreement as to the
affected Property only, in which event the Purchase Price shall be reduced by
the Allocated Purchase Price of the affected Property and Purchaser shall
proceed to Closing on the remaining Properties, subject to the other terms and
conditions of this Agreement, or (ii) to consummate the transactions
contemplated hereby, notwithstanding such condemnation, without any abatement or
reduction in the Purchase Price on account thereof except as herein provided,
but at Closing the applicable Seller shall assign all condemnation proceeds
payable (but not yet paid as of Closing) to Purchaser and to the extent that the
applicable Seller has received any condemnation proceeds prior to Closing,
Seller shall xxxxx the Purchase Price by an amount equal to the award paid to
Seller on account of such taking, less the amount of Seller's costs and
expenses, including reasonable attorneys' fees and expenses, in establishing and
collecting such award. In addition, if Purchaser elects to proceed in accordance
with clause (ii) above, Purchaser shall have the right to appear and defend at
such condemnation proceedings. Purchaser shall make any such election by written
notice to Sellers given on or prior to the fifth (5th) day after Purchaser's
receipt of the Condemnation Notice. Failure of Purchaser to give such notice
within the time prescribed by the preceding sentence shall be deemed an election
by Purchaser to proceed in accordance with clause (ii) above. For purposes of
this Section 2.6, the Newport Campus shall constitute a single Property.
2.7 Casualty.
(a) If prior to the Closing, any Property is damaged or
destroyed by fire or other casualty (the "Damaged Property"), the applicable
Seller shall promptly, but in any event within five (5) Business Days, notify
Purchaser of the same (the "Casualty Notice"). If the cost of restoring the
damage to such Property is greater than seven and one-half percent (7.5%) of the
Allocated Purchase Price of the affected Property, but less than Two Million
Dollars ($2,000,000), Seller shall state in its Casualty Notice if it elects to
postpone Closing on the affected Property only for a reasonable time, but no
later than the Casualty Extended Closing Date, in which event Purchaser shall
proceed to Closing on the remaining Properties subject to the other terms and
conditions of this Agreement and at such initial Closing Purchaser shall post
with the Title Company a deposit (separate from the Deposit) in the amount of
five percent (5%) of the affected Property's Allocated Purchase Price ("Extended
Casualty Security Amount"). In the event that the applicable Seller makes the
election under the immediate preceding sentence, the applicable Seller shall
restore the affected Property as nearly as possible to the same economic unit as
it represented prior to the casualty using the insurance proceeds (but the
applicable Seller shall pay any insurance deductible) and Purchaser shall be
obligated to proceed
17
to Closing on the affected Property upon its restoration subject to the other
terms and conditions of this Agreement only if the affected Property's trailing
three (3) months net operating income before the extended Closing Date is at
least ninety-five percent (95%) of the Property's trailing three (3) months net
operating income before the date on which the casualty occurred. If Closing on
the affected Property has not occurred by the Casualty Extended Closing Date,
then this Agreement shall terminate and be of no further force and effect,
except with respect to provisions hereof which by their express terms survive a
termination of this Agreement, Purchaser shall receive a return of the Extended
Casualty Security Amount, and each party to this Agreement shall pay for its own
out-of-pocket expenses incurred in respect of the transactions contemplated by
this Agreement.
(b) If the cost of restoring the damage to such Property is
the lesser of (i) the greater of (A) One Million Dollars ($1,000,000) or (B)
seven and one-half percent (7.5%) of the Allocated Purchase Price or greater, or
(ii) Ten Million Dollars ($10,000,000) with respect to casualties affecting two
or more Properties, and such Seller did not exercise its option to postpone
Closing specified in Section 2.7(a), Purchaser shall have the right, upon notice
to the applicable Seller in writing within ten (10) Business Days of receipt of
the Casualty Notice, and the Closing Date shall, if necessary, be extended to
give Purchaser the benefit of the entire ten (10) Business Day period, to
terminate this Agreement as to the affected Property only, in which event the
Purchase Price shall be reduced by the Allocated Purchase Price(s) of the
affected Property and Purchaser shall proceed to Closing on the remaining
Properties subject to the other terms and conditions of this Agreement .
(c) If Purchaser does not elect to terminate this Agreement as
to the affected Property pursuant to Section 2.7(b), or if the cost of restoring
the damage is less than the greater of (A) One Million Dollars ($1,000,000) or
(B) seven and one-half percent (7.5%) of the Allocated Purchase Price, then (i)
Purchaser shall receive at the Closing, to the extent such sums have not been
expended on repair work with the reasonable approval of Purchaser (except for
emergency repairs for which no approval shall be required), the amount of the
deductible plus the amount necessary to repair any uninsured loss plus an
assignment of all insurance proceeds payable (but not yet paid) as a result of
such loss, plus all insurance proceeds received by Seller as a result of such
casualty loss, (ii) this Agreement shall continue in full force and effect with
no reduction in the Purchase Price and (iii) the applicable Seller shall have no
obligation to repair such damage.
(d) The risk of loss to each Property shall remain with the
applicable Seller until the Closing.
(e) For purposes of this Section 2.7, the Newport Campus shall
constitute a single Property.
(f) In the event of a disagreement between a Seller and
Purchaser as to whether a casualty satisfies a threshold set forth in this
Section 2.7, the determination of the independent insurance adjuster pursuant to
the applicable Seller's casualty insurance policy shall be binding.
18
SECTION 3. PURCHASE AND SALE; DEPOSIT.
3.1 Closing. The purchase, sale and lease of the Properties and other
transactions contemplated hereby shall be consummated on a date (the "Closing
Date") that is mutually agreeable to all of the parties but no later than
February 3, 2004, as such date may be extended pursuant to the express terms and
conditions of this Agreement (the "Closing"). The Closing shall be held in
escrow with the Title Company at the offices of Arent Fox Xxxxxxx Xxxxxxx &
Xxxx, PLLC, 0000 Xxxxxxxxxxx Xxxxxx, XX, Xxxxxxxxxx, XX 00000, or at such other
location as Sellers and Purchaser may agree.
3.2 Purchase Price. At Closing, Purchaser shall pay Sellers the
Purchase Price provided that the parties acknowledge that a portion of the
Purchase Price shall be paid by Purchaser's and/or the Applicable Property
Transferee assuming at Closing each of the Loans made by the applicable Lender
to the applicable Seller, as borrower, (except for the Loan secured by Sakonnet
Bay Manor which shall be paid off at Closing pursuant to the provisions of
Section 9.2(f)), which Loans are evidenced and secured by the applicable Loan
Documents. Accordingly, except with respect to the Loan secured by Sakonnet Bay
Manor, Purchaser shall receive a credit against the Purchase Price at Closing in
the amount of (i) the outstanding principal balance and (ii), to the extent
unpaid by the applicable Seller, as borrower, interest for the month of Closing
from the most recent payment date through the Closing Date (an estimate of the
outstanding principal balance under each Loan as of December 31, 2003 is
included in SCHEDULE G) due under each of the Loans on the Closing Date,
together with any past due interest or other sums then due and payable by the
applicable Seller to the applicable Lender other than the Loan Assumption Costs
payable by Purchaser pursuant to Section 10. The balance of the Purchase Price
shall be payable by Purchaser by wire transfer of immediately available funds on
the Closing Date to an account or accounts to be designated by Sellers prior to
the Closing, subject to any adjustments and apportionments of the Purchase Price
set forth in Section 10.
3.3 Deposit. Prior to the Effective Date, Purchaser deposited the
Initial Deposit by wire transfer of immediately available funds in escrow with
the Title Company. Prior to the end of the Due Diligence Period, Purchaser shall
deposit the Additional Deposit by wire transfer of immediately available funds
in escrow with the Title Company. The Deposit shall be held in an insured money
market account, certificates of deposit, US Treasury Bills or such other
instruments reasonably designated by Purchaser and all interest thereon shall be
deemed a part of the Deposit. If the purchase and sale of the Properties as
contemplated hereunder is consummated, then the Deposit (including the interest
accrued on the Deposit) shall be paid to Sellers at the Closing and credited
against the Purchase Price.
3.4 Sellers' Closing Documents. On the Closing Date, Sellers, in their
capacity as seller and as tenant, the Manager, or their respective Affiliates,
as applicable, shall have delivered (or cause to be delivered) to Purchaser,
with respect to each Property, the following:
(a) A Special Warranty Deed, in the case of each California
Property, a Grant Deed, and in the case of each Rhode Island Property, a
Quitclaim Deed, duly executed by the applicable Seller, conveying to the
Applicable Property Transferee good and marketable title to such Property, free
from all liens, encumbrances, security interests, options and adverse claims
19
of any kind or character, subject to the Permitted Encumbrances, in the forms
set forth in SCHEDULE M attached hereto;
(b) An Assignment and Assumption of Contracts duly executed by
the applicable Seller (or its Affiliate, as applicable), and the Applicable
Property Transferee with respect to each Property in the form set forth in
SCHEDULE N attached hereto, pursuant to which each applicable Seller (or its
Affiliate, as applicable) shall assign its Contracts to the Applicable Property
Transferee, but such assignment shall be effective only upon the occurrence of
an Event of Default (as defined in the Lease) and delivery of the notice
described in SCHEDULE N;
(c) An Assignment and Assumption of Intangible Property duly
executed by the applicable Seller and the Applicable Property Transferee with
respect to each Property in the form set forth in SCHEDULE O attached hereto;
(d) Updated Rent Rolls and an Assignment and Assumption of
Occupancy Agreements duly executed by the applicable Seller and the Applicable
Property Transferee with respect to each Property in the form set forth in
SCHEDULE P, attached hereto (provided, however, the Applicable Property
Transferee's sole liability relating to Occupancy Agreements shall be to refund
Occupants' security deposits (including, in the case of the Waterside Retirement
Estates Property, deposits under life care contracts) actually transferred to it
pursuant to the applicable Lease), pursuant to which each applicable Seller
shall assign its Occupancy Agreements to the Applicable Property Transferee, but
such assignment shall be effective only upon the occurrence of an Event of
Default (as defined in the Lease) and delivery of the notice described in
SCHEDULE P;
(e) Copies of letters duly executed by the applicable Seller
and approved by Purchaser (which approval shall not be unreasonably withheld,
conditioned or delayed), advising each of the residents under the Occupancy
Agreements of the change in ownership of each of the Properties and advising of
the Seller's change in status from owner to tenant (and that Seller, as tenant,
continues to hold any security deposit under an Occupancy Agreement including,
in the case of Waterside Retirement Estates Property, deposits under life care
contracts);
(f) A Xxxx of Sale duly executed by the applicable Seller and
the Applicable Property Transferee with respect to each Property in the form set
forth in SCHEDULE Q, attached hereto;
(g) A copy of the Management Agreement for such Property duly
executed by the Manager and Tenant, and a Manager Subordination for each
Property duly executed by the Manager, both of which are in full force and
effect as of Closing;
(h) The Lease for such Property duly executed by each Tenant,
and the Applicable Property Transferee and a Memorandum of Lease for such
Property in recordable form, which is in full force and effect as of Closing;
(i) To the extent a Lender Consent has been obtained for an
applicable Loan, the applicable Assumption Documents with respect to such Loan;
20
(j) Certified copies of all organizational documents,
applicable resolutions, certificates of incumbency, and good standing
certificates with respect to each Seller, in its capacity as seller and tenant,
and such other Persons as Purchaser may reasonably require;
(k) A certificate of a duly authorized officer of each of
Sellers confirming the continued truth and accuracy of its representations and
warranties in this Agreement (subject to such changes as the applicable Seller
has given notice of to Purchaser pursuant to Section 6);
(l) The "As-Built" Drawings (if available) and an original (or
if not available, a copy) of the final certificate of occupancy for such
Property;
(m) Copies of the Permits;
(n) Copies of the Contracts;
(o) The original (or if not available, copies) of any and all
warranties and guarantees pertaining to the Improvements;
(p) The FF&E Schedule;
(q) An owner's affidavit executed by each Seller in the form
mutually agreeable to each Seller and Title Company for the purpose of
satisfying any request for the same in the applicable Title Commitments;
(r) A settlement statement;
(s) The Cherry Land Sale Contract Assignment and Assumption
Agreement;[
(t) With respect to each of the California Properties,
California Form 597-W as required by California Revenue and Taxation Code
Section 18662;
(u) With respect to each of the Rhode Island Properties, a
Residency Affidavit (regarding Rhode Island withholding taxes);
(v) The Pooling Agreement duly authorized and executed by all
the parties thereto; and
(w) Such other documents, certificates and other instruments
as may be reasonably required to consummate the transaction contemplated hereby.
3.5 Purchaser Closing Documents. On the Closing Date, Purchaser and the
Applicable Property Transferee, as the case may be, shall have delivered to
Sellers the following:
(a) Duly executed and acknowledged counterparts of the
documents described in Subsections 3.4(b), (c), (d), (h), (i), (r), (s), and
(v);
(b) A certificate of a duly authorized officer of Purchaser
and the Applicable Property Transferees confirming the continued truth and
accuracy of the representations and warranties of Purchaser in this Agreement;
21
(c) Certified copies of applicable resolutions, certificates
of good standing, and certificates of incumbency with respect to Purchaser, the
Applicable Property Transferees, and such other Persons as Sellers may
reasonably require;
(d) Assignments of Purchase and Sale Agreement by Purchaser to
each of the Applicable Property Transferees as it relates to the applicable
Property; and
(e) Such other documents, certificates and other instruments
as may be reasonably required to consummate the transaction contemplated hereby.
SECTION 4. CONDITIONS TO PURCHASER'S OBLIGATION TO CLOSE.
The obligation of Purchaser to acquire the Properties on the Closing Date shall
be subject to the satisfaction or written waiver of the following conditions
precedent on and as of the Closing Date:
4.1 Representations and Warranties of Sellers True. The representations
and warranties of Sellers set forth in Section 6.1 (as the same may have been
changed by the Change Notice from Sellers as provided therein) shall be true,
correct and complete in all material respects (without duplication as to the
materiality qualifications contained therein) on and as of the Closing Date
(except that any representations or warranties made as of a specified date shall
be true and correct in all material respects (without duplication as to the
materiality qualifications contained therein) as of such specified date);
provided, however, that notwithstanding anything contained herein to the
contrary, this condition shall be deemed to have been satisfied even if such
representations were not true and correct in all material respects (without
duplication as to the materiality qualifications contained therein) on the
Effective Date but are so true and correct in all material respects (without
duplication as to the materiality qualifications contained therein) on the
Closing Date. In the event the representations and warranties are deemed
modified by the changes set forth in the Change Notice, and (a) if the
applicable Seller agrees to indemnify Purchaser against any loss that may be
suffered by Purchaser as a result of such changes and so notifies Purchaser in
the Change Notice, then Purchaser will be required to close hereunder without
any abatement of Purchase Price or changes in any other condition, and (b) if
the applicable Seller elects not to so indemnify Purchaser and the applicable
Seller does not extend the Closing Date pursuant to an express right to do so
under this Agreement, Purchaser may elect (i) to terminate this Agreement and
receive a return of the Deposit, in which event this Agreement shall terminate
and be of no further force or effect, except with respect to provisions hereof
which by their express terms survive a termination of this Agreement and, only
if all Change Notice circumstances relate solely to events or circumstances
arising following the Due Diligence Period, the applicable Seller shall pay
Purchaser its actual out-of-pocket expenses incurred in respect of the
transaction contemplated by this Agreement not to exceed the Due Diligence
Payment, and in all other circumstances each party shall bear its own
out-of-pocket expenses incurred in respect of the transactions contemplated by
this Agreement, or (ii) to consummate the transactions contemplated hereby,
notwithstanding such change in the representations and warranties, without any
abatement or reduction in the Purchase Price on account thereof. Purchaser shall
make any such election by written notice to Sellers given on or prior to the
fifth (5th) day after Purchaser's receipt of the Change Notice and time shall be
of the essence with respect to the giving of such notice. Failure of Purchaser
to give such notice of its
22
election in accordance with clause (i) above shall be deemed an election
Purchaser to proceed in accordance with clause (ii) above.
4.2 Sellers' Performance. Sellers shall have performed all covenants,
agreements and delivered all documents required by this Agreement to be
performed or delivered by them on or before the Closing Date.
4.3 Title Policies. The Title Company shall be unconditionally
obligated and prepared, subject only to payment of the applicable premium and
other related charges and delivery of all conveyance documents, to issue the
title policies pursuant to the Title Commitments in their form at the end of the
Due Diligence Period; provided that Purchaser shall have ordered and delivered
to Purchaser, the Title Commitments and all updates thereto in accordance with
the requirements of Section 2.3.
4.4 Permits. Each Tenant and Manager shall hold all Permits necessary
for such Tenant and Manager to perform its obligations to provide the services
and operate the Properties as required under its respective Lease, and
Management Agreement, as applicable ("Licensing Condition").
4.5 No Bankruptcy. No Act of Bankruptcy on the part of any Seller or
Manager shall have occurred and remain outstanding as of the Closing Date.
4.6 Approval of Lenders. Each Lender shall have approved in writing the
sale of the applicable Property, except the Heron's Run Property (which is not
financed) and Sakonnet Bay Manor (the Loan for which will be paid off at
Closing) to Purchaser and/or Applicable Property Transferee, the Leases of the
Properties back to the Tenants, Management Agreements with Manager and
assumption by Purchaser and/or Applicable Property Transferee of the applicable
Loan (each, a "Lender Consent") pursuant to applicable Assumption Documents.
4.7 Approval of Unit Holders. The unit holder of the other condominium
unit located adjacent to the Heron's Run Property and the Treemont Property,
respectively, shall have granted its consent to the sale of the Heron's Run
Property and the Treemont Property, respectively, to Purchaser or its Affiliated
designee (each, a "Unit Holder Consent").
To the extent that (i) (A) Lender Consents have not been obtained with
respect to all financed Properties and/or (B) the Licensing Condition is not
satisfied with respect to all Properties, (ii) the Allocated Purchase Price with
respect to all Properties for which the Lender Consent and/or the Licensing
Condition is not satisfied is not in excess of One Hundred Eighty Million
Dollars ($180,000,000), (iii) all other conditions precedent with respect to
such Properties (for which the Lender Consent and/or the Licensing Condition is
not satisfied) are satisfied, and (iv) all conditions precedent with respect to
the remaining Properties are satisfied (collectively, the "Two Closing Extension
Conditions"), then either Purchaser or Sellers may, by notice to the other party
given before the scheduled Closing Date extend the Closing Date with respect
only to any such Property until five (5) Business Days after the failed Lender
Consent and/or Licensing Condition has been satisfied with respect to all such
Property(ies) for which the Closing Date has been delayed from the initial
Closing Date, but no later than the Final Extended Closing Date ("Two Closing
Extension Right"). In the event either Purchaser or Sellers exercise
23
the Two Closing Extension Right, Purchaser shall provide the Title Company at
the initial Closing with a deposit of the Second Security Amount. If the Closing
on the Property(ies) for which the Two Closing Extension Right has been
exercised has not occurred by the Final Extended Closing Date, then this
Agreement shall terminate and be of no further force and effect, except with
respect to provisions hereof which by their express terms survive a termination
of the Agreement, Purchaser shall (subject to the terms of Section 11.2 to the
contrary) receive a return of the Second Security Amount, and each party to this
Agreement shall (subject to the terms of Section 11.1 to the contrary) pay for
its own out-of-pocket expenses incurred in respect of the transactions
contemplated by this Agreement. Notwithstanding the terms of the previous
sentence, the applicable Seller shall reimburse Purchaser for its out-of-pocket
expenses incurred in respect of the Property(ies) for which the Two Closing
Extension Right has been exercised, not to exceed the Due Diligence Payment, if
the Closing on the Property(ies) for which the Two Closing Extension Right has
been exercised fails to occur due to such Seller's failure to cooperate in
satisfying the Licensing Condition or breach of its covenants set forth in
Section 8.2.
If the Two Closing Extension Conditions are not satisfied in their entirety and
any of the following conditions to Closing are not satisfied as of the scheduled
Closing Date, Section 4.3 (Title Policies), Section 4.4 (Permits) or Section 4.6
(Approval of Lenders), Sellers or Purchaser may, by notice to the other party
given before the scheduled Closing Date, extend the Closing Date with respect to
all Properties until five (5) Business Days after all conditions precedent with
respect to all Properties have been satisfied, but no later than the Final
Extended Closing Date. If Closing has not occurred by the Final Extended Closing
Date, then this Agreement shall terminate and be of no further force and effect,
except with respect to provisions hereof which by their express terms survive a
termination of this Agreement, Purchaser shall (subject to the terms of Section
11.2 to the contrary) receive a return of the Deposit, and each party to this
Agreement shall (subject to the terms of Section 11.1 to the contrary) pay for
its own out-of-pocket expenses incurred in respect of the transactions
contemplated by this Agreement.
SECTION 5. CONDITIONS TO SELLERS' OBLIGATION TO CLOSE.
The obligation of Sellers to convey and transfer to Purchaser the Properties on
the Closing Date is subject to the satisfaction or written waiver of the
following conditions precedent on and as of the Closing Date:
5.1 Representations and Warranties True. The representations and
warranties made by Purchaser pursuant to Section 7 shall be true and correct in
all material respects (without duplication as to materiality qualifications
contained therein) on the Effective Date and shall be true and correct in all
material respects (without duplication as to materiality qualifications
contained therein) on and as of the Closing Date with the same force and effect
as if such representations and warranties had been made on and as of the Closing
Date.
5.2 Purchaser's Performance. Purchaser shall have performed all
covenants, agreements and delivered all documents required by this Agreement to
be performed or delivered by it on or before the Closing Date.
24
5.3 Permits. The Licensing Condition shall be satisfied with respect to
each of the Properties.
5.4 Approval of Lenders. Subject to the provisions of the end of
Section 4, each Lender shall have given a Lender Consent (except with respect to
the Heron's Run Property and Sakonnet Bay Manor), which shall include (i)
Lender's approval in writing of the sale of the applicable Property to the
Applicable Property Transferee and assumption by the Applicable Property
Transferee and/or Purchaser of the applicable Loan encumbering the applicable
Property, and (ii) executed releases in form and substance reasonably
satisfactory to the applicable Seller releasing the applicable Seller, its
Representatives and any of Seller's Affiliates that may be obligated under any
of the Loan Documents relating to the applicable Property, including any
guaranty or indemnity, from any and all liability under or in respect of each
Loan relating to the applicable Property from and after the Closing Date, and
(iii) authorization of the return to the applicable Seller of all funds, letters
of credit or other security held by or for the benefit of the applicable Lender
under any reserve or escrow accounts (the nature and amount of any
reserve/escrow balances required by Lenders and a list of any additional
security required by Lenders is included in SCHEDULE G).
SECTION 6. REPRESENTATIONS AND WARRANTIES OF SELLERS; PURCHASER'S INDEPENDENT
INVESTIGATION; ACCESS.
6.1 Representation and Warranties of Sellers. To induce Purchaser to
enter into this Agreement, each Seller represents and warrants to Purchaser as
follows:
(a) Organization and Authorization. Each Seller is an entity
duly organized and in good standing in the state of its organization and is duly
qualified to do business and in good standing in the state in which its
applicable Property is situated. Each Seller has taken all necessary action to
authorize the execution, delivery and performance of this Agreement, and upon
the execution and delivery of any document to be delivered by each Seller on or
prior to the Closing Date, such document shall constitute the valid and binding
obligation and agreement of each Seller enforceable against each Seller in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws of general
application affecting the rights and remedies of creditors and general
principles of equity. The person or persons executing and delivering this
Agreement or any other document to be delivered by each Seller on or prior to
the Closing Date is or shall have been prior to the Closing Date, duly
authorized to execute and deliver such documents on behalf of each Seller.
(b) FF&E. Each Seller has good and marketable title to the
FF&E described on the FF&E Schedule provided to Purchaser. The FF&E Schedule
accurately describes in all material respects the FF&E owned by each Seller and
located at the applicable Property.
(c) Contracts. To each of Seller's knowledge, the only
Contracts and amendments thereto that will be in effect on the Closing Date that
are not terminable without cause or penalty within sixty (60) days with respect
to any Property owned by such Seller (the "Non-Terminable Contracts") are as set
forth in SCHEDULE S (the "Schedule of Non-Terminable Contracts") or as entered
into in accordance with Section 2.3(b). To each of Seller's knowledge, each
Seller has performed in all material respects all of its obligations under each
Contract to
25
which such Seller is a party or is subject and, to each of Seller's knowledge,
no fact or circumstance has occurred, which by itself or with the passage of
time or the giving of notice or both would constitute a default by Seller under
any such Contract. Further, to each Seller's knowledge, all other parties to
such Contracts have performed all of their obligations thereunder in all
material respects and are not in default thereunder.
(d) Compliance with Laws. As of the Effective Date, no Seller
has received any notice (whether written or oral) from any Governmental
Authority or possess any actual knowledge that all or any portion of any of the
Properties is or was at any time within the one-year period immediately prior to
the Effective Date in material violation of any of the Applicable Laws relating
to the Properties, which material violation has not been cured or remedied in
accordance with and so complies in all material respects with such Applicable
Law prior to the Effective Date.
(e) No Consents. No consents from third parties, subject to
satisfaction of the Lender Consent condition for each financed Property (other
than Sakonnet Bay Manor) and the Unit Holder Consents condition, are required
for the performance of any of Seller's obligations hereunder.
(f) Litigation. Except as set forth in SCHEDULE T attached
hereto, none of the Sellers have received written notice of and, to each of
Seller's knowledge, no investigation, action or proceeding is pending or, to
each of Seller's knowledge, threatened, and each Seller has not received written
notice of and, to each of Seller's knowledge, no investigation looking toward
such an action or proceeding has begun, which (a) questions the validity of this
Agreement or any action taken or to be taken pursuant hereto, or (b) may result
in or subject any Property to a material liability which is not covered by
insurance, whether or not Purchaser is indemnified by any of Sellers with
respect to the same, or (c) involves condemnation or eminent domain proceedings
against any material part of any Property.
(g) FIRPTA. Each Seller is not a "foreign person" within the
meaning of Section 1445(f)(3) of the Internal Revenue Code of 1986, as amended,
and each Seller shall certify its taxpayer identification number at Closing.
(h) Operating Statements. The Operating Statements for each
Property are the operating statements used in each Seller's ordinary course of
business and, to each of Seller's knowledge, are in accordance with the books
and records of each Seller. To each of Seller's knowledge, the Operating
Statements state in all material respects the applicable Property's income and
expenses for the applicable periods set forth therein.
(i) Permits. To each Seller's knowledge, as of the Effective
Date, the respective Sellers hold all material Permits necessary for the current
use, occupancy and operation of the respective Properties.
(j) Environmental Matters. Each Seller has delivered to
Purchaser copies of all final environmental reports or studies and final indoor
air quality reports prepared for each Seller by third party consultants in
Seller's possession relating to the Properties, which reports are listed on
SCHEDULE U attached hereto. To Seller's actual knowledge and except for any
26
matters which are disclosed in the reports listed on SCHEDULE U, Sellers are not
aware that any of the Properties are not in compliance with any Applicable Laws
relating to environmental conditions or Hazardous Materials. Each Seller has not
received any written notice of any pending or, to the best of each Seller's
knowledge, threatened action or proceeding arising out of the environmental
condition of any of the Properties, Hazardous Materials located on any of the
Properties, or any alleged violation of environmental statutes, ordinances or
regulations.
(k) No Conflicting Agreements. Subject to satisfaction of the
Lender Consent condition for each financed Property (other than Sakonnet Bay
Manor) and the Unit Holder Consents condition, the transfer and delivery by
Sellers of the Properties to Purchaser as provided hereunder and the performance
by each Seller of its obligations under this Agreement will not conflict with or
result in the breach of any of the terms of any agreement or instrument to which
any Seller is a party.
(l) Employees. Each Seller shall be responsible for payment of
all wages and salaries payable to, and all vacation pay, pension and welfare
benefits and other fringe benefits accrued and required by Applicable Law, with
respect to all individuals employed by such Seller at its Property relating to
the period prior to the Closing, and Manager, on behalf of Tenant, pursuant to
the terms of the Management Agreement, shall be responsible for payment of all
such wages, salaries and vacation pay, pension, welfare and other benefits
relating to the period commencing on and from and after the Closing to the
extent required by Applicable Law. All of the employees at each Property prior
to the Closing Date are employees of the Seller of the applicable Property or
such Seller's affiliate and such Seller or affiliate shall continue to employ
such employees immediately after the Closing Date except for those employees
that may be terminated in the ordinary course of business unrelated to the sale
of the Property. At no time hereunder, upon the Closing or under the applicable
Lease, shall any of the employees at the Property, including employees of
Manager, be or be deemed to be the employees of Purchaser or any Applicable
Property Transferee and upon and after the Closing, be or be deemed to be
transferred to Purchaser or any Applicable Property Transferee. If required,
each Seller or the Manager, as applicable, will comply with the notice and other
requirements under the Worker Adjustment Retraining and Notification Act ("WARN
Act"), the Consolidated Omnibus Budget Reconciliation Act ("COBRA") or any
similar state or local legislation with respect to such employee matters, and
such obligation shall survive the Closing, notwithstanding anything to the
contrary in the WARN Act. Because neither Purchaser nor any Applicable Property
Transferee at no time will be or be deemed to be the employer of employees at
any Property, it is expressly understood and agreed that Purchaser is not and
shall not be responsible or liable, directly or indirectly, for payment of any
benefits, severance liability, compensation, pay or other obligations, of
whatever nature, due or alleged to be due to any employee at any Property
including employees of Manager, or of any Seller attributable to any time period
up to, upon and after the Closing Date. Similarly, there shall be no union
agreements, pension plans, health plans, benefit plans, deferred compensation
plans, bonus plans or vacation plans or similar agreements for or concerning
such employees which shall be binding upon Purchaser. Nothing contained in this
Section 6.1(l) shall be construed to affect any of the rights and obligations of
the parties under the Lease or the Management Agreement.
(m) Tax Returns. All privilege, gross receipts, excise, sales
and use, personal property and franchise taxes with respect to each Property
resulting from its operations prior to
27
the Closing will be paid by the applicable Seller as and when due and payable,
and all tax returns for such taxes shall be prepared and duly filed by such
Seller prior to the Closing Date, or will be prepared and duly filed by such
Seller prior to the due date (including extensions thereof) under Applicable
Law.
(n) Construction Contracts: Mechanics' Liens. At the Closing,
there will be no outstanding Contracts, including Renovation Contracts, made by
any Seller for the construction or repair of any Improvements relating to the
applicable Property which have not been fully paid for or provision for the
payment of which has not been made by each Seller and each Seller shall
discharge and have released of record or bonded all mechanics' or materialmen's
liens, if any, arising from any labor or materials furnished to its Property
prior to the Closing to the extent any such lien is not insured over by the
Title Company or bonded over pursuant to Applicable Law.
(o) Insurance. Sellers have received no written notice from
any insurance carrier of defects or inadequacies in any Property which, if
uncorrected, would result in a termination of insurance coverage or a material
increase in the premiums charged therefor.
(p) Loan Documents. The Loan Documents described in SCHEDULE G
that encumber each Property constitute all of the loan documents in each of
Seller's possession and all of the material loan documents and related
instruments in effect with respect to each of the Loans and have not been
modified except as set forth in SCHEDULE G. The Loan Documents relating to each
applicable Property are in full force and effect. Each Seller has received no
written notice of default under the Loan Documents relating to the applicable
Property that has not been cured and each Seller has no actual knowledge of any
state of facts that, with the giving of notice or passage of time or both, would
give rise to a material default by each Seller under the Loan Documents relating
to the applicable Property.
The representations and warranties made in this Agreement by each Seller, in
Sections 6.1 (a), (c), (d), (e), (f), (g), (h), (i), (j) (k), (l), (m) and (o),
are made as of the Effective Date and shall be deemed remade by each Seller as
of the Closing Date, with the same force and effect as if made on, and as of,
the Closing Date; and the representations and warranties made in this Agreement
by each Seller in Sections 6.1(b), (n) and (p), shall be made as of the Closing
Date. Notwithstanding the foregoing, each Seller shall have the right, from time
to time prior to the Closing Date, to modify the representations and warranties
made in Section 6.1(d) (Compliance with Laws), Section 6.1(f) (Litigation),
Section 6.1(i) (Permits), Section 6.1(j) (Environmental Matters), Section 6.1(k)
(No Conflicting Agreements) and Section 6.1(o) (Insurance) as a result of
changes in applicable conditions beyond the control of any Seller, by notice to
Purchaser ("Change Notice").
As used in this Agreement, the phrases "to Sellers' knowledge," "to Seller's
knowledge," or words of similar import shall mean the actual (and not
constructive or imputed) knowledge, without independent investigation or
inquiry, of Thilo D. Best, Xxx X. XxXxxx, and Xxxxxxx Xxxxxxxx. The Persons
named in the immediately preceding sentence shall not have any personal
liability hereunder. Notwithstanding any language to the contrary herein and
without limiting Purchaser's due diligence rights hereunder, Purchaser shall
have the right to make inquiry of the executive directors of each Property
during the Due Diligence Period with respect
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to each of the representations and warranties which relate to a Property's
operations, which representations and warranties comprise Section 6.1(b), (c),
(d), (f), (i), (j), (k), (l), (n), and (o).
6.2 Purchaser's Independent Investigation.
(a) Purchaser, for itself, any Property Transferee and any of
their successors or assigns acknowledges and agrees that it is being given the
full opportunity during the Due Diligence Period to inspect and investigate each
and every aspect of each Property, either independently or through
Representatives or experts of Purchaser's choosing, as Purchaser considers
necessary or appropriate, and the funding of the Additional Deposit will
conclusively evidence Purchaser's complete satisfaction with such independent
investigation except to the extent and only for the period specified in a fully
executed amendment to this Agreement. Such independent investigation by
Purchaser shall include, without limitation:
(i) all matters relating to title to the Properties;
(ii) all matters relating to governmental and other
legal requirements with respect to the Properties, such as taxes, assessments,
zoning, use permit requirements and building codes;
(iii) all zoning, land use, building, environmental
and other statutes, rules, or regulations applicable to each Real Property;
(iv) the physical condition of each Real Property,
including the interior, the exterior, the square footage of the Improvements,
the structure, the roof, the paving, the utilities, and all other physical,
structural and functional aspects of such Real Property;
(v) reports, studies, assessments, investigations and
other materials related to the presence of Hazardous Materials at, on or under
each Real Property and the compliance of each Real Property with all
environmental laws, including environmental assessment reports;
(vi) any easements and/or access rights affecting
such Real Property;
(vii) the Occupancy Agreements with respect to such
Real Property and all matters in connection therewith, including the ability of
the Occupants thereto to pay the rent;
(viii) the Contracts (including the Renovation
Contracts) and any other documents or agreements of significance affecting such
Property;
(ix) all matters that would be revealed by an ALTA
as-built survey, a physical inspection or an environmental site assessment of
such Real Property;
(x) the Operating Statements provided by Sellers and
all matters relating to the income and operating or capital expenses of the
Properties and all other financial matters which Purchaser chooses to
investigate;
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(xi) the Due Diligence Materials heretofore delivered
or made available to Purchaser and/or its Representatives for their review and
approval; and
(xii) all other matters of significance affecting or
otherwise deemed relevant by Purchaser with respect to such Property.
(b) Purchaser acknowledges and agrees that (i) on or prior to
the expiration of the Due Diligence Period it will have completed its
independent investigation of the Properties and the Due Diligence Materials,
(ii) it is acquiring the Properties based on such independent investigation as
well as the Seller's representations and warranties hereunder, and subject to
all information disclosed in the Due Diligence Materials and (iii) shall have no
right after the expiration of the Due Diligence Period to terminate this
Agreement based on any further investigations of the Properties or the Due
Diligence Materials except as provided in Section 11.1. The failure of Purchaser
to send a Termination Notice prior to the expiration of the Due Diligence Period
shall conclusively constitute Purchaser's approval of each and every aspect of
such Properties. The preceding sentence is not intended to relieve, and shall
not relieve, any Seller from any representations set forth in Section 6.1.
(c) EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, IT IS
UNDERSTOOD AND AGREED THAT SELLERS ARE NOT MAKING AND HAVE NOT AT ANY TIME MADE
ANY WARRANTIES OR REPRESENTATIONS OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED,
WITH RESPECT TO THE PROPERTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OR
REPRESENTATIONS AS TO HABITABILITY, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR
PURPOSE OR ANY OTHER MATTER OR THING REGARDING THE PROPERTIES. PURCHASER
ACKNOWLEDGES AND AGREES THAT UPON CLOSING SELLER SHALL SELL AND CONVEY TO
PURCHASER AND PURCHASER SHALL ACCEPT THE PROPERTIES "AS IS, WHERE IS, WITH ALL
FAULTS". EXCEPT TO THE EXTENT EXPRESSLY PROVIDED OTHERWISE IN THIS AGREEMENT,
PURCHASER IS NOT RELYING ON ANY ORAL UNDERTAKING OR WRITTEN STATEMENT WHICH IS
NOT EXPRESSLY SET FORTH IN THIS AGREEMENT WITH RESPECT TO ITS DUE DILIGENCE
CONCERNING THE PROPERTIES. PURCHASER ACKNOWLEDGES THAT IT HAS ENTERED INTO THIS
AGREEMENT WITH THE INTENTION OF MAKING AND RELYING UPON ITS OWN INVESTIGATION OR
THAT OF THIRD PARTIES WITH RESPECT TO THE PHYSICAL, ENVIRONMENTAL, ECONOMIC AND
LEGAL CONDITION OF EACH PROPERTY, EXCEPT AS EXPRESSLY PROVIDED IN THIS
AGREEMENT. PURCHASER FURTHER ACKNOWLEDGES THAT IT HAS NOT RECEIVED FROM OR ON
BEHALF OF ANY SELLER, MANAGER, OR ANY AFFILIATE OF THE FOREGOING, ANY
ACCOUNTING, FEASIBILITY, MARKETING, ECONOMIC, TAX, LEGAL, ARCHITECTURAL,
ENGINEERING, PROPERTY MANAGEMENT OR OTHER ADVICE WITH RESPECT TO THIS
TRANSACTION AND IS RELYING SOLELY UPON THE ADVICE OF THIRD PARTY ACCOUNTING,
TAX, LEGAL, ARCHITECTURAL, ENGINEERING, PROPERTY MANAGEMENT AND OTHER ADVISORS.
30
6.3 Access.
The provisions of the Access Agreement are incorporated herein by
reference.
SECTION 7. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
To induce Sellers to enter into this Agreement, Purchaser represents and
warrants to Sellers as follows:
7.1 Organization and Authorization. Purchaser is an entity duly
organized and in good standing in the state of its organization. Purchaser has
taken all necessary action to authorize the execution, delivery and performance
of this Agreement, and upon the execution and delivery of any document to be
delivered by Purchaser or any Applicable Property Transferee on or prior to the
Closing Date, such document shall constitute the valid and binding obligation
and agreement of Purchaser or any Applicable Property Transferee enforceable
against Purchaser or any Applicable Property Transferee in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws of general application affecting the
rights and remedies of creditors and general principles of equity. The person or
persons executing and delivering this Agreement or any other document to be
delivered by Purchaser or any Applicable Property Transferee on or prior to the
Closing Date is or shall have been prior to the Closing Date, duly authorized to
execute and deliver such documents on behalf of Purchaser or any Applicable
Property Transferee. On and as of the Closing Date, the Property Transferees
shall each be duly organized and in good standing in the state of its
organization and shall be duly qualified to do business and in good standing in
the state in which the applicable Property situated.
7.2 No Consents. No consents, subject to satisfaction of the Lender
Consent condition, from third parties are required for the performance of
Purchaser's obligations hereunder.
7.3 No Conflicting Agreements. The acquisition of the Properties by
Purchaser as provided hereunder and the performance by Purchaser of its
obligations under this Agreement will not conflict with or result in the breach
of any of the terms of any agreement or instrument to which Purchaser is a
party.
7.4 Litigation. Purchaser has received no written notice of and, to
Purchaser's knowledge, no investigation, action or proceeding is pending and, to
Purchaser's knowledge, no action or proceeding is threatened and Purchaser has
received no notice of, and to Purchaser's knowledge, no investigation looking
toward such an action or proceeding has begun, which questions the validity of
this Agreement or any action taken or to be taken pursuant hereto.
The representations and warranties made in this Agreement by Purchaser
are made as of the Effective Date and shall be deemed remade by Purchaser as of
the Closing Date with the same force and effect as if made on, and as of, such
date. As used in this Agreement, the phrase "to Purchaser's knowledge," or words
of similar import shall mean the actual (and not constructive or imputed)
knowledge, without independent investigation or inquiry, of Xxxxxx Xxxxxxx,
Xxxxxxx Xxxxxxx, Xxxxx XxXxxxx, Xxxxxxx Xxxxxxxx and Xxxxx Xxxxxxxxxx.
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SECTION 8. INTERIM OPERATION OF THE PROPERTIES.
Each Seller hereby covenants with Purchaser as follows:
8.1 Compliance with Laws and Permitted Encumbrances. From the Effective
Date to the Closing Date, each Seller shall use commercially reasonable efforts
to comply in all material respects with (i) all Applicable Laws affecting its
Property and (ii) all terms, covenants and conditions of instruments of record
affecting its Property.
8.2 Assumption of Loans. Promptly following the Effective Date, each
Seller which owns a financed Property shall request the applicable Lender's
consent to the sale of the applicable Property and the assumption by Purchaser
or the Applicable Property Transferee of the applicable Loan, and shall, using
its commercially reasonable efforts, diligently and in good faith, cooperate
with Purchaser's efforts to obtain such consent. Each Seller shall submit to the
applicable Lender or its servicer within the later of (i) ten (10) Business Days
after the Effective Date or (ii) five (5) Business Days after written request
therefor, in writing, with a copy to Purchaser, all information required of each
Seller with respect to the assumption of each Loan. From the Effective Date to
the Closing Date, each Seller shall use its commercially reasonable efforts to
comply in all material respects with all terms, covenants and conditions of all
Loan Documents.
8.3 General Operation. Except as otherwise contemplated or permitted by
this Agreement or approved by Purchaser in writing, from the Effective Date to
the Closing Date, each Seller agrees that it will operate, maintain, repair,
license, and lease the applicable Property in the ordinary course and consistent
with Seller's past practices and will not dispose of or encumber all or any
portion of each Property, except for dispositions of personal property in the
ordinary course of business or as otherwise permitted by this Agreement. Without
limiting the foregoing, each Seller shall, in the ordinary course, file all
renewal applications for the applicable Property licenses on a timely basis,
enforce the Occupancy Agreements in all material respects, perform in all
material respects all of licensors' or landlords' obligations under the
Occupancy Agreements (other than Occupancy Agreements that are in the process of
being terminated due to a resident's or tenant's default thereunder), not grant
any raises to or terminate any Property employees except in the ordinary course
of business, and pay all costs and expenses of each Property which are the
applicable Seller's responsibility to pay.
8.4 Maintenance and Renovation Contracts. Between the Effective Date
and the Closing Date, each Seller shall (i) maintain the applicable Property in
substantially the same manner as prior hereto pursuant to each Seller's normal
course of business, subject to reasonable wear and tear and further subject to
the occurrence of any damage or destruction to the Real Property by casualty or
other causes or events beyond the control of such Seller; provided, however,
that each Seller's maintenance obligations under this subsection shall not
include any obligation to make capital expenditures not incurred in such
Seller's normal course of business or any other expenditures not incurred in
such Seller's normal course of business; and (ii) perform its obligations under
the Renovation Contracts, including timely paying for all amounts due
thereunder. On the Closing Date, the applicable Sellers shall provide the Title
Company pursuant to an escrow agreement acceptable to such Sellers and the Title
Company with an amount equal to one hundred and ten percent (110%) of any
amounts not yet due and payable by
32
the applicable Sellers under the Renovation Contracts to be held in escrow in an
interest-bearing account (the "RC Escrow Account") by the Title Company and
disbursed by the Title Company from time to time pursuant to written
instructions from Sellers in accordance with the provisions of the Renovation
Contracts. Upon the completion of the work under each Renovation Contract and
Title Company receiving appropriate lien waivers from the contractor(s) under
such Renovation Contract, Title Company shall disburse to the applicable Seller
any remaining funds in the RC Escrow Account relating to such Renovation
Contract. The applicable Seller shall be responsible to timely complete and pay
all costs of and shall indemnify Purchaser and its assigns against any cost,
loss, damage or liability relating to any failure of the applicable Seller to
pay all amounts due under the applicable Renovation Contract.
8.5 Cherry Hills Club Internal Change of Ownership. Sellers disclose to
Purchaser that a regulatory application is pending to approve the transfer of
ownership of Cherry Hills Club from Integrated Management - Xxxxxxxxxx Pointe,
L.L.C. to Cherry Hills Club, L.L.C. If such change of ownership application is
approved by the applicable Governmental Authority prior to Closing, ownership of
Cherry Hills Club shall be transferred to Cherry Hills Club, L.L.C., subject to
Cherry Hills Club, L.L.C. assuming the obligation of the Integrated Management -
Xxxxxxxxxx Pointe, L.L.C to sell Cherry Hills Club to Purchaser in accordance
with the terms of this Agreement. Upon the transfer of Cherry Hills Club to
Cherry Hills Club, L.L.C., Cherry Hills Club, L.L.C. shall automatically become
a Seller under this Agreement and Cherry Hills Club, L.L.C. covenants to execute
any documentation reasonably necessary or desirable to evidence such assumption
following the transfer.
8.6 Natural Hazard Report for California Properties. Each Seller of the
California Properties has or will employ the services of ECS ("Natural Hazard
Expert") to examine the maps and other information specifically made available
to the public by government agencies for the purposes of enabling such Sellers
to fulfill their disclosure obligations with respect to the natural hazards
referred to in California Civil Code Section 1103.2 with respect to each of the
California Properties and to report the results of its examination to Purchaser
and the applicable Sellers in writing. The written report prepared by the
Natural Hazard Expert regarding the results of its examination fully and
completely discharges the applicable Sellers from their disclosure obligations
referred to in California Civil Code Section 1103.2, and, for the purposes of
this Agreement, the provisions of California Civil Code Section 1103.4 regarding
the non-liability of such Sellers for errors and/or omissions not within their
personal knowledge shall be deemed to apply.
8.7 Audits of the Properties and Operations. From the Effective Date to
the Closing Date, each Seller shall cooperate fully at no out-of-pocket cost to
any Seller with Purchaser's audits of all financial information and operations
relating to the Properties as reasonably required by Purchaser to comply with
applicable underwriting policies and securities law and corporate governance
policies applicable to the REIT and its Affiliates.
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SECTION 9. COVENANTS OF PURCHASER.
Purchaser hereby covenants with Sellers as follows:
9.1 Property Transferees. No later than the later of (i) five (5)
Business Days after the last day of the Due Diligence Period or (ii) the date
that the structure and organizational documents therefor shall be approved by
each applicable Lender (and in any event prior to seven (7) Business Days before
the scheduled Closing Date), Purchaser, the REIT, or their Affiliates shall form
each of the Property Transferees. With respect to the actual acquisition and fee
simple ownership of each Property, each Property will be acquired and owned at
the Closing by the Applicable Property Transferee. Each Property Transferee will
be the landlord under the applicable Lease. The proposed organizational chart
for the limited partnerships described in this Section 9.1 is attached hereto as
SCHEDULE V. The Sellers hereby acknowledge and agree that Purchaser shall have
the right to assign this Agreement with respect to each Property to the
Applicable Property Transferee as may be necessary in order to effectuate the
intent of this Section 9.1.
9.2 Assumption of the Loans.
(a) Purchaser shall use its commercially reasonable efforts to
obtain the Lender Consents and endeavor diligently and in good faith to complete
the assumption of the Loans. If Purchaser does not terminate this Agreement on
or prior to the expiration of the Due Diligence Period, it shall be deemed to
have agreed to assume each of the Loans under the terms of the respective Loan
Documents.
(b) Without limiting the generality of the foregoing,
Purchaser shall: (i) submit all information with respect to Purchaser, the REIT,
each Applicable Property Transferee, its Representatives and Affiliates, as each
Lender may request, (ii) provide such legal opinions as each Lender may require,
from counsel acceptable to each Lender and in form and substance acceptable to
each Lender, (iii) satisfy each Lender's requirements with respect to the single
purpose and/or single asset entity and bankruptcy remote structure of ownership
of each Applicable Property Transferee; (iv) deposit with each Lender such funds
as may be required in accordance with the terms of the applicable Loan Documents
to establish required reserve or escrow accounts and deliver to each Lender any
letters of credit required by such Lender as security under the terms of the
Loan Documents; provided, however, Purchaser shall not be required to fund
amounts materially in excess of the reserve/escrow balances required by Lenders
and letters of credit described in Schedule G; (v) comply with any other
conditions to the transfer which may be reasonably imposed by each Lender and,
if the applicable Loan has been securitized prior to the Closing, by any
applicable Rating Agencies; and (vi) take such other actions as may be required
to comply with the transfer provisions of the applicable Loan Documents.
(c) Purchaser shall, and shall cause CNL RHB and/or the
Applicable Property Transferees, as the case may be, to execute, acknowledge and
deliver to each Lender at Closing such documents as specified in the Loan
Documents or as each Lender may reasonably require consistent with customary
loan assumption practices in order to confirm Purchaser's and/or the Applicable
Property Transferee's assumption of the applicable Loan Documents, and shall not
34
unreasonably withhold their agreement to other documents reasonably required and
not materially expanding liability under the Loan Documents to enable each
Lender to release the applicable Seller and its Representatives and Affiliates
from further liability in respect of the Loan (collectively, the "Assumption
Documents"). The Assumption Documents shall include, without limitation, the
following: (i) an assumption agreement pursuant to which each Applicable
Property Transferee and/or Purchaser assumes the obligations of borrower under
the applicable Loan Documents to which borrower is a party, (ii) an agreement
executed by CNL RHB, Purchaser or such other Entity as may be acceptable to
Lender substantially in the form of any existing guaranty and environmental
indemnity; and (iii) a schedule of the applicable Loan Documents and a statement
by each Lender of the outstanding principal balance of the applicable Loan and
that there are no notices of default outstanding and that each Lender does not
have knowledge of any monetary defaults thereunder. The Assumption Documents
shall provide for such amendments to the applicable Loan Documents as are
necessary to (x) substitute Purchaser and/or each Applicable Property Transferee
as borrower, (y) substitute CNL RHB, Purchaser, or such other Entity as may be
acceptable to Lender as a substitute guarantor or indemnitee, as the case may
be, and (z) modify representations and warranties and affirmative and negative
covenants as necessary to delete all references to the applicable Seller, its
Representatives and Affiliates, and to reflect Purchaser's and its Affiliates'
dates of formation and structure of ownership and the Leases with Tenants and
Management Agreement with Manager.
(d) Notwithstanding anything to the contrary contained herein,
in no event shall Purchaser be obligated to enter into any agreements with the
applicable Lender that would modify the economic terms of the applicable Loan,
increase the obligations of the borrower, beyond those of the applicable Seller
as borrower and beyond those of the currently applicable guarantors and
indemnitors, under the applicable Loan Documents, reduce the rights of the
borrower under the applicable Loan Documents, or require Purchaser to assume any
pre-existing obligations or defaults of the applicable Seller, as borrower,
under the applicable Loan (except for any liabilities which Purchaser would have
incurred had it entered into a new loan (e.g., liabilities relating to the
pre-existing environmental condition of the Property under an environmental
indemnity)).
(e) Purchaser shall (i) submit to each Lender or its servicer
within the later of (i) ten (10) Business Days after the Effective Date or (ii)
five (5) Business Days after written request therefor, in writing, all
information reasonably required of Purchaser with respect to the assumption of
each Loan, and (ii) pay or prepay, as may be required by Lenders, the Loan
Assumption Costs requested by each Lender or its servicer in connection with the
assumption of each Loan.
(f) Notwithstanding any language to the contrary herein, at
Closing, Purchaser shall pay the applicable Seller through the Title Company the
full Allocated Purchase Price for Sakonnet Bay Manor (without deduction for the
balance of the Loan encumbering such Property) together with all prepayment fees
and costs in connection with the release of the Loan encumbering Sakonnet Bay
Manor (subject to the terms of Section 10.2), and the Loan encumbering Sakonnet
Bay Manor shall thereupon be paid off and released at Closing through the Title
Company.
35
SECTION 10. APPORTIONMENTS.
10.1 Apportionments.
(a) All real estate taxes (including special assessments
attributable to the period prior to the Closing), utility, security deposits
under the Occupancy Agreements, (including deposits under the life care
contracts in the case of the Waterside Retirement Estates Property), and any
other deposits in connection with Property operations (other than security
amounts described in the Assumption Documents or otherwise contemplated by the
Loan Documents), and items of income and expense with respect to each Property
shall be adjusted between Sellers and each Tenant as of the Closing Date
(Purchaser shall not be obligated to fund any deposits except for security
amounts described in the Assumption Documents or otherwise contemplated by the
Loan Documents). Interest payable under each of the Loans for the month of
Closing shall be prorated as of the Closing Date. All items of revenue, cost and
expense of each Property with respect to the period prior to the Closing Date
shall be for the account of each Tenant. All items of revenue, cost and expense
of each Property with respect to the period from and after the Closing Date
shall be for the account of Seller, as tenant, according to the terms of the
Lease. The adjustments hereunder shall be calculated or paid in an amount based
upon a fair and reasonable estimated accounting performed and agreed to by
Representatives of Sellers and Purchaser at the Closing. Subsequent final
adjustments and payments shall be made in cash or other immediately available
funds as soon as practicable after the Closing Date, and in any event within
ninety (90) days after the Closing Date (provided that such ninety day period
shall be extended up to an additional thirty (30) days after the necessary
information becomes available for the parties to calculate any necessary
adjustments relating to payments of real estate taxes or special assessments),
based upon an accounting performed by the Manager and acceptable to Sellers and
Purchaser. In the event the parties have not agreed with respect to the
adjustments required to be made pursuant to this Section 10.1 within such 90 day
period, upon application by any such party, a certified public accountant
reasonably acceptable to the parties to such disputed adjustment shall determine
any such adjustments which have not theretofore been agreed to between such
parties. The charges of such accountant shall be borne equally by the parties to
such disputed adjustment. All adjustments to be made as a result of the final
results of the adjustments shall be paid to the party entitled to such
adjustment within thirty (30) days after the final determination thereof.
(b) The provisions of this Section 10.1 shall survive the
Closing.
10.2 Closing Costs.
(a) All Third-Party Costs (hereinafter defined) shall be borne
one hundred percent (100%) by Purchaser. All Third-Party Costs are included in
the determination of rent under the Leases (subject to the terms of the Leases
providing that the maximum amount of Third-Party Costs which may be included in
the determination of rent is Seven Million Three Hundred Thousand Dollars
($7,300,000)).
(b) As used herein, the term "Third-Party Costs" shall mean
the following costs and expenses which are incurred by Sellers, Purchaser, or
their respective Affiliates in accordance with the terms of this Section
10.2(b): (i) Environmental Reports prepared in
36
connection with the purchase and sale of the Properties; (ii) the Surveys
prepared pursuant to Section 2.4; (iii) premiums for the title insurance
policies and endorsements to be provided at the Closing pursuant to the terms of
this Agreement; (iv) any closing or escrow charges or other expenses payable on
the Closing Date to the Title Company conducting the Closing; (v) property
appraisals prepared in connection with the purchase and sale of the Properties
pursuant to this Agreement; (vi) Purchaser's local counsel fees incurred in
connection with the consummation of the Closing, the satisfaction of the
Licensing Condition, and in the assumption of the Loan for each Property (which
fees shall be limited to those incurred in connection with usual and customary
local counsel services in similar commercial real estate transactions); (vii)
all fees and expenses, including Purchaser's, Sellers', and their respective
Affiliates' attorneys' fees and expenses and fees and expenses charged by any
governmental entity relating to satisfaction of the Licensing Condition,
provided, however that Purchaser shall have no responsibility for any fees and
expenses relating to correcting or otherwise addressing Property deficiencies or
violations and that Sellers' counsel shall provide Purchaser with a good faith,
non-binding estimate of its costs relating to satisfying the Licensing
Conditions within seven (7) Business Days after the Effective Date; (viii) the
third-party market assessment reports obtained by Purchaser; (ix) the
out-of-pocket costs of the audits of all financial information and operations
relating to the Properties as more fully described in Section 8.7; (x) the
third-party land-use, architectural and engineering inspection reports of the
Properties obtained by Purchaser; (xi) the third-party audited special purpose
financing statements for each Property obtained by Purchaser, (xii) subject to
the terms of the next sentence, any other separate out-of-pocket costs and
expenses incurred by Sellers or Purchaser or their respective Affiliates in
connection with the consummation of the Closing or incurred in connection with
the consummation of the assumption of the Loans (including payment of prepayment
fees and expenses in connection with the loan secured by a mortgage on Sakonnet
Bay Manor), including but not limited to the Loan Assumption Costs, and the fees
and expenses of counsel of Purchaser, its Affiliates, and counsel of the Lenders
in connection with the preparation and negotiation of this Agreement and all
other documents and instruments in connection with the consummation of the
Closing or in connection with the consummation of the assumption of the Loans
(including payment of prepayment fees and expenses in connection with the loan
secured by a mortgage on Sakonnet Bay Manor) by Purchaser and/or the Applicable
Property Transferees; and (xiii) Transfer Taxes incurred on the Closing Date or
in connection with the assumption of the Loans by Purchaser. Sellers shall be
responsible for the fees and expenses of its and its Affiliates' outside counsel
including but not limited to, Arent Fox Xxxxxxx Xxxxxxx & Xxxx, PLLC, its
accountants, and/or other professional fees (subject to clause (vii) of the
immediately preceding sentence relating to satisfaction of the Licensing
Condition), in connection with the preparation and negotiation of this Agreement
and all other documents and instruments in connection with the consummation of
the Closing and the assumption of the Loans by Purchaser and/or the Applicable
Property Transferees. All amounts payable by Purchaser under this Section
10.2(a) shall be paid by the Applicable Property Transferees in the event that
the Closing is consummated hereunder, which amounts shall be allocated by the
Applicable Property Transferees in their reasonable discretion. To the extent
that the Third-Party Costs are known and have or shall be paid on or prior to
the Closing Date by a Seller or its Affiliate (without implying any Seller
obligation to advance Third Party Costs), within two Business Days prior to the
Closing Date, Sellers shall provide Purchaser with written notice and a copy of
the calculations of any amounts due to Sellers pursuant to this Section and
Purchaser shall reimburse the applicable Seller on the Closing Date for such
costs
37
and expenses. No later than thirty (30) days after the third month anniversary
of the Closing Date, Sellers shall provide Purchaser with written notice and a
copy of the calculations of any amounts due to Sellers pursuant to this Section
which were not paid by Purchaser on the Closing Date and Purchaser shall
promptly reimburse the applicable Seller for such costs and expenses.
(c) As used herein, the term "Transfer Taxes" shall mean any
transfer, sales, use, recordation or other similar taxes, impositions, expenses
or fees incurred in connection with the Closing and the assumption of the Loan
for each Property and/or the recordation or filing of any documents or
instruments in connection therewith or the sale, transfer or conveyance of the
Properties from Sellers to the Applicable Property Transferees or the lease of
each Property from the Applicable Property Transferees to the applicable Tenant.
Transfer Taxes shall not include, and each Seller shall be solely responsible
for any taxes due in respect of its income, net worth or capital, if any, and
any privilege, sales and occupancy taxes, due or owing to any Governmental
Authority in connection with the operation of its Property for any period of
time prior to the Closing, and the Applicable Property Transferees, and each
Tenant, as applicable, shall be solely responsible for all such taxes for any
period from and after the Closing, and provided further that any income tax
arising as a result of the sale and transfer of any Property by Sellers to
Purchaser shall be the sole responsibility of Sellers.
(d) The obligations of the parties under this Section 10 shall
survive the Closing.
SECTION 11. REMEDIES FOR PRE-CLOSING AND POST-CLOSING DEFAULTS.
11.1 Purchaser's Remedies for Pre-Closing Default.
(a) If any Seller shall have made any representation or
warranty in Section 6.1 with respect to any Property which shall be untrue in
any material respect when made or updated as herein provided, subject to any
Change Notice, or if any Seller shall fail to perform when it is obligated to so
any of the material covenants and agreements contained herein with respect to
any Property and such condition or failure continues for a period of ten (10)
Business Days after written notice thereof from Purchaser, then Purchaser's sole
remedy shall be (i) to terminate this Agreement and this Agreement shall be of
no further force and effect, except with respect to provisions hereof which by
their express terms survive a termination of this Agreement in which event: (1)
Sellers shall reimburse to Purchaser an amount equal to the Due Diligence
Payment, and (2) the Title Company shall promptly return to Purchaser the
Deposit; (ii) to consummate the transactions contemplated hereby,
notwithstanding such default, without any abatement or reduction in the Purchase
Price on account thereof, or (iii) compel specific performance of this
Agreement. It is understood and agreed that for purposes of this Section 11.1,
if a default results from a false representation or warranty, such default shall
be deemed cured if the events, conditions, acts or omissions giving rise to the
falsehood are cured within the applicable cure period even though, as a
technical matter, such representation or warranty was false as of the date
actually made.
(b) Notwithstanding the foregoing or any other provision of
this Agreement, in the event that any Seller default described in Section
11.1(a) can be cured or compensated for by the payment of money, Purchaser shall
not have the right to terminate this Agreement by
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reason thereof in the event that the applicable Seller elects to grant to
Purchaser at the Closing a credit against the Purchase Price in an amount agreed
upon by the applicable Seller and Purchaser, each acting reasonably, as
necessary to fully cure or compensate Purchaser for such default.
(c) Without limitation of the foregoing, if Purchaser has
knowledge of (i) a default in any of the covenants, agreements or obligations to
be performed by Sellers under this Agreement and/or (ii) any breach of or
inaccuracy in any representation or warranty of Sellers made in this Agreement,
and nonetheless elects to proceed to Closing, then, upon the consummation of the
Closing, Purchaser shall be deemed to have waived any such default and/or breach
or inaccuracy and shall have no claim against Sellers with respect thereto.
11.2 Sellers' Remedy for Pre-Closing Default.
(a) If Purchaser shall have made any representation or
warranty in Section 7 which shall be untrue in any material respect when made or
updated as herein provided, or if Purchaser shall fail to perform when it is
obligated to do so any of the material covenants and agreements contained herein
and such condition or failure continues for a period of ten (10) Business Days
after written notice thereof from Sellers, then Sellers' sole remedy shall be
(i) to terminate this Agreement and this Agreement shall be of no further force
and effect, except with respect to provisions hereof which by their express
terms survive a termination of this Agreement in which event the Title Company
shall promptly DISBURSE TO SELLERS THE DEPOSIT; or (ii) to consummate the
transactions contemplated hereby, notwithstanding such default, without any
abatement or reduction in the Purchase Price on account thereof. PURCHASER AND
SELLERS AGREE THAT THE DEPOSIT CONSTITUTES A FAIR AND REASONABLE AMOUNT TO BE
RECEIVED BY SELLERS AS AGREED AND LIQUIDATED DAMAGES FOR PURCHASER'S DEFAULT
UNDER THIS AGREEMENT, AS WELL AS A FAIR, REASONABLE AND CUSTOMARY AMOUNT TO BE
PAID AS LIQUIDATED DAMAGES TO A SELLER IN AN ARM'S LENGTH TRANSACTION OF THE
TYPE CONTEMPLATED BY THIS AGREEMENT UPON A DEFAULT BY THE PURCHASER THEREUNDER;
AND RECEIPT BY SELLERS OF THE DEPOSIT UPON PURCHASER'S DEFAULT HEREUNDER SHALL
NOT CONSTITUTE A PENALTY OR A FORFEITURE. It is understood and agreed that for
purposes of this Section 11.2, if a default results from a false representation
or warranty, such default shall be deemed cured if the events, conditions, acts
or omissions giving rise to the falsehood are cured within the applicable cure
period even though, as a technical matter, such representation or warranty was
false as of the date actually made.
(b) If any Seller with knowledge of (i) a default in any of
the covenants, agreements or obligations to be performed by Purchaser under this
Agreement and/or (ii) any breach of or inaccuracy in any representation or
warranty of Purchaser made in this Agreement which would entitle any Seller to
terminate this Agreement, and nonetheless elects to proceed to Closing, then,
upon the consummation of the Closing, Sellers shall be deemed to have waived any
such default and/or breach or inaccuracy and shall have no claim against
Purchaser with respect thereto.
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11.3 Limitations on Purchaser's Post-Closing Claims. Notwithstanding
any provision to the contrary herein (but subject to the last sentence of this
Section 11.3) or in any document or instrument (including any deeds or
assignments) executed by any Seller and delivered to Purchaser or any Applicable
Transferee at or in connection with the Closing (excluding the Lease, the
Memorandum of Lease, the Management Agreement, the Memorandum of Management
Agreement, and any exhibit thereto, collectively, "Closing Documents"), no
Seller shall have (and each Seller is exculpated and released from any)
liability whatsoever with respect to any suits, actions, proceedings,
investigations demands, claims, liabilities, fines, penalties, liens, judgments,
losses, injuries, damages, expenses or costs, including without limitation,
attorneys' and experts' fees and costs of investigation and remediation costs
(collectively, "Claims") under, and Purchaser shall be forever barred from
making or bringing any Claims with respect to, any of the representations and
warranties, covenants and indemnities contained in this Agreement or in any
Closing Document, except to the extent (and only to the extent) that the
aggregate amount of all Claims for breach of such Seller's representations and
warranties, covenants and indemnities either (A) with respect to a particular
Property exceeds One Hundred Thousand Dollars ($100,000) or (B) with respect to
more than one Property exceeds Five Hundred Thousand Dollars ($500,000) in the
aggregate (in either event, the "Threshold Amount") (but if such Claim is valid
and is finally determined (or settled) to be in excess of the Threshold Amount,
then the applicable Seller's liability shall extend to the "first dollar" of
Purchaser's Claim); provided, however, notwithstanding any provision to the
contrary herein or in any Closing Document, the total liability of a Seller for
any or all Claims with respect to a particular Property shall not exceed two and
one-half percent (2.5%) of the Allocated Purchase Price of such Property (the
"Cap Amount"). Further, notwithstanding any provision to the contrary herein or
in any Closing Document, Sellers shall have no liability with respect to any
Claim under any of the representations and warranties, covenants and indemnities
contained in this Agreement or in any Closing Document, which Claim relates to
or arises in connection with (1) any Hazardous Materials (except solely to the
extent that a Seller has breached its representation in Section 6.1(j)
(Environmental Matters), (2) the physical condition of the Property (except
solely to the extent that a Seller has breached its representation in Section
6.1(d) (Compliance with Laws)) or (3) any other matter not expressly set forth
in Sellers' representations and warranties set forth in Section 6.1, or their
covenants and indemnities hereunder or in any Closing Document. Purchaser shall
not make any Claim or deliver any notice of a Claim (a "Claim Notice") unless in
good faith, it believes the Claim would exceed the Threshold Amount.
Notwithstanding any provision to the contrary, the provisions of this Section
11.3, Section 11.4, Section 11.7, and Section 11.8 shall not be construed to
reduce, increase or otherwise modify the obligations of the parties in their
respective capacities as landlord, tenant and manager under the Lease,
Management Agreement and any ancillary document thereto.
11.4 Survival of Purchaser's Claims. Except as otherwise specifically
set forth in this Agreement, the representations and warranties, covenants and
indemnities of Sellers contained herein or in any Closing Document shall survive
only until the date that is twelve (12) months after the Closing Date (the
"Survival Date"). Any Claim that Purchaser may have any time against Sellers for
breach of any such representation, warranty, covenant or indemnity, whether
known or unknown, with respect to which a Claim Notice has not been delivered to
Sellers on or prior to the Survival Date, shall not be valid or effective and
the party against whom such Claim is asserted shall have no liability with
respect thereto. Any Claim that Purchaser may have at any time against Sellers
for a breach of any such representation or warranty, or its covenants and
40
indemnities whether known or unknown, with respect to which a Claim Notice has
been delivered to Sellers on or prior to the Survival Date may be the subject of
subsequent litigation brought by Purchaser against Sellers. For the avoidance of
doubt, on the Survival Date, each Seller shall be fully discharged and released
(without the need for separate releases or other documentation) from any
liability or obligation to Purchaser, Applicable Property Transferees, and/or
their successors and assigns with respect to any Claims or any other matter
relating to this Agreement or any Closing Document, except solely for those
matters that are then the subject of the pending Claim Notice delivered by
Purchaser to Sellers that is still pending on the Survival Date.
11.5 Limitations on Sellers' Post-Closing Claims. Notwithstanding any
provision to the contrary herein (but subject to the last sentence of this
Section 11.5) or in any document or instrument executed by Purchaser and
delivered to Sellers at or in connection with the Closing, (excluding the Lease
and Memorandum of Lease, collectively, "Purchaser Closing Documents"), Purchaser
shall have no liability whatsoever with respect to any Claims under any of the
representations and warranties, covenants and indemnities contained in this
Agreement or in any Purchaser Closing Document, except to the extent that the
aggregate amount of all Claims for breach of Purchaser's representations and
warranties, covenants and indemnities with respect to a particular Property
exceeds the Threshold Amount (but if such claim(s) is/are valid and finally
determined (or settled) to be in excess of the Threshold Amount, then
Purchaser's liability shall extend to the "first dollar" of Sellers' Claim);
provided, however, notwithstanding any provision to the contrary herein or in
any Purchaser Closing Document, the total liability of Purchaser for any or all
Claims with respect to any Property shall not exceed the Cap Amount. Further,
notwithstanding any provision to the contrary herein or in any Purchaser Closing
Document, Purchaser shall have no liability with respect to any Claim under any
of the representations and warranties, covenants and indemnities contained in
this Agreement or in any Purchaser Closing Document, which Claim relates to or
arises in connection with any other matter not expressly set forth in
Purchaser's representations and warranties set forth in Section 7 or its
covenants or indemnities in any Purchaser Closing Document. Sellers shall not
make any Claim or deliver any Claim Notice unless in good faith, Sellers
believes the Claim would exceed the Threshold Amount as set forth above.
Notwithstanding any provision to the contrary, the provisions of this Section
11.5, Section 11.6, Section 11.7, and Section 11.8 shall not be construed to
reduce increase or otherwise modify the obligations of the parties in their
respective capacities as landlord, tenant and manager under the Lease,
Management Agreement and any ancillary documents thereto.
11.6 Survival of Seller's Claims. Except as otherwise specifically set
forth in this Agreement, the representations and warranties, covenants and
indemnities of Purchaser contained herein or in any Purchaser Closing Document
shall survive only until the Survival Date. Any Claim that Sellers may have any
time against Purchaser for breach of any such representation, warranty,
covenant, or indemnity, whether known or unknown, with respect to which a Claim
Notice has not been delivered to Purchaser on or prior to the Survival Date,
shall not be valid or effective and the party against whom such Claim is
asserted shall have no liability with respect thereto. Any Claim that Sellers
may have at any time against Purchaser for a breach of any such representation
or warranty, covenants and indemnities whether known or unknown, with respect to
which a Claim Notice has been delivered to Purchaser on or prior to the Survival
Date may be the subject of subsequent litigation brought by Sellers against
Purchaser. For the
41
avoidance of doubt, on the Survival Date, Purchaser shall be fully discharged
and released (without the need for separate releases or other documentation)
from any liability or obligation to Sellers, and/or their successors and assigns
with respect to any Claims or any other matter relating to this Agreement or any
Purchaser Closing Document, except solely for those matters that are then the
subject of the pending Claim Notice delivered by Sellers to Purchaser that is
still pending on the Survival Date.
11.7 Limitations on Liability.
(a) The parties hereto confirm and agree that in each instance
herein where a party or its Affiliates is entitled to payment or reimbursement
for damages, costs or expenses pursuant to the terms and conditions of this
Agreement, any payment or reimbursement made to such party shall be conclusively
deemed to be for the account of both such party and its Affiliates, it being
acknowledged and agreed that a payment or reimbursement made to such party for
damages, costs or expenses shall be sufficient to satisfy all claims for payment
or reimbursement of such party and its Affiliates. The parties further confirm
and agree that no party hereto (a "Non-Performing Party") will be deemed to be
in default hereunder or be liable for any breach of its representations and
warranties under this Agreement if its failure to perform an obligation
hereunder is based solely on the non-performance of another party to this
Agreement (which other party is not an Affiliate of the Non-Performing Party) or
where all conditions precedent to the obligation of such Non-Performing Party to
consummate the Closing under Sections 4 or 5, as applicable, have not been
fulfilled.
(b) To the maximum extent permitted by applicable law, no
shareholder, director, officer or employee of any party to this Agreement shall
have any personal liability with respect to the liabilities or obligations of
such party under this Agreement or any document executed by such party pursuant
to this Agreement.
11.8 Survival. Sections 11.3 through 11.7 shall survive the Closing.
SECTION 12. MISCELLANEOUS.
12.1 Drafts not an Offer to Enter into a Legally Binding Contract. The
parties hereto agree that the submission of a draft of this Agreement by one
party to another is not intended by either party to be an offer to enter into a
legally binding contract with respect to the purchase and sale of the
Properties. The parties shall be legally bound with respect to the purchase and
sale of the Properties pursuant to the terms of this Agreement only if and when
the parties have been able to negotiate all of the terms and provisions of this
Agreement in a manner acceptable to each of the parties in their respective sole
discretion, and each of Seller and Purchaser have fully executed and delivered
to each other a counterpart of this Agreement.
12.2 Brokerage Commissions. Each of the parties hereto represents to
the other parties that it dealt with no broker, finder or like agent in
connection with this Agreement or the transactions contemplated hereby, and that
it reasonably believes that there is no basis for any other person or entity to
claim a commission or other compensation for bringing about this Agreement or
the transactions contemplated hereby. Sellers shall indemnify and hold harmless
Purchaser, and its successors and assigns from and against any loss, liability
or expense,
42
including, reasonable attorneys' fees, arising out of any claim or claims for
commissions or other compensation for bringing about this Agreement or the
transactions contemplated hereby made by any broker, finder or like agent, if
such claim or claims are based in whole or in part on dealings with Sellers.
Purchaser shall indemnify and hold harmless Sellers and their successors and
assigns from and against any loss, liability or expense, including, reasonable
attorneys' fees, arising out of any claim or claims for commissions or other
compensation for bringing about this Agreement or the transactions contemplated
hereby made by any broker, finder or like agent, if such claim or claims are
based in whole or in part on dealings with Purchaser. Nothing contained in this
section shall be deemed to create any rights in any third party. The provisions
of this Section 12.2 shall survive the Closing hereunder and any termination of
this Agreement.
12.3 Publicity. The parties agree that no party shall, with respect to
this Agreement and the transactions contemplated hereby, contact or conduct
negotiations with public officials, make any public pronouncements, issue press
releases or otherwise furnish information regarding this Agreement or the
transactions contemplated hereby to any third party without the consent of the
other party, which consent shall not be unreasonably withheld, conditioned or
delayed, except as may be required by law or as may be reasonably necessary, on
a confidential basis, to inform any rating agencies, potential sources of
financing, financial analysts, or to entities involved with a sale of a
Controlling Interest in Sellers, Purchaser or any of their Affiliates or to
receive legal, accounting and/or tax advice; provided, however, that, if such
information is required to be disclosed by law, the party so disclosing the
information will use reasonable efforts to give notice to the other parties as
soon as such party learns that it must make such disclosure. Notwithstanding the
foregoing, if such information is required to be disclosed to any governmental
authority to facilitate the transfer of Permits pursuant to Section 4.5 or
obtain zoning information, the disclosing party may disclose such information
without the consent of the other parties and shall promptly give written notice
to the other parties of such information which was disclosed. This Section 12.3
shall be subject to the terms of the Confidentiality Agreement.
12.4 Notices.
(a) Any and all notices, demands, consents, approvals, offers,
elections and other communications required or permitted under this Agreement
shall be deemed adequately given if in writing and the same shall be delivered
either in hand, or by mail or Federal Express or similar expedited commercial
carrier, addressed to the recipient of the notice, postpaid and registered or
certified with return receipt requested (if by mail), or with all freight
charges prepaid (if by Federal Express or similar carrier).
(b) All notices required or permitted to be sent hereunder
shall be deemed to have been given for all purposes of this Agreement upon the
date of acknowledged receipt, upon the date of receipt or refusal, except that
whenever under this Agreement a notice is either received on a day which is not
a Business Day or is required to be delivered on or before a specific day which
is not a Business Day, the day of receipt or required delivery shall
automatically be extended to the next Business Day.
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(c) All such notices shall be addressed,
if to Sellers or any Seller, to:
c/o Horizon Bay Senior Communities
0000 X. Xxxxxx Xxxxxx, Xxxxx 000
Xxxxx, Xxxxxxx 00000
Attention: Thilo D. Best and Xxx X. XxXxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
c/o Goldman Sachs & Co.
000 Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
and
Arent Fox Xxxxxxx Xxxxxxx & Xxxx, PLLC
0000 Xxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
Phone: (000) 000-0000
Fax: (000) 000-0000
if to Purchaser, to:
c/o CNL Retirement Corp.
CNL Center at City Commons
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxxxx Xxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Lowndes, Drosdick, Doster, Xxxxxx & Xxxx, P.A.
000 Xxxxx Xxxx Xxxxx
Post Office Box 2809
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. XxXxxxxx, Esq.
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Phone: (000) 000-0000
Fax: (000) 000-0000
If to Title Company, to:
Fidelity National Title Insurance Company
000 X. Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: Xxx Xxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
(d) By notice given as herein provided, the parties hereto and
their respective successors and assigns shall have the right from time to time
and at any time during the term of this Agreement to change their respective
addresses effective upon receipt by the other parties of such notice and each
shall have the right to specify as its address any other address within the
United States of America.
12.5 Waivers, Etc. Any waiver of any term or condition of this
Agreement, or of the breach of any covenant, representation or warranty
contained herein, in any one instance, shall not operate as or be deemed to be
or construed as a further or continuing waiver of any other breach of such term,
condition, covenant, representation or warranty or any other term, condition,
covenant, representation or warranty, nor shall any failure at any time or times
to enforce or require performance of any provision hereof operate as a waiver of
or affect in any manner such party's right at a later time to enforce or require
performance of such provision or any other provision hereof. This Agreement may
not be amended nor shall any waiver, change, modification, consent or discharge
be effected, except by an instrument in writing executed by or on behalf of the
party against whom enforcement of any amendment, waiver, change, modification,
consent or discharge is sought.
12.6 Assignment; Successors and Assigns. Except as otherwise provided
herein, this Agreement and all rights and obligations hereunder shall not be
assignable by any party without the written consent of the other parties. This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and permitted assigns. This Agreement is
not intended and shall not be construed to create any rights in or to be
enforceable in any part by any other persons.
12.7 Severability. If any provision of this Agreement shall be held or
deemed to be, or shall in fact be, invalid, inoperative or unenforceable as
applied to any particular case in any jurisdiction or jurisdictions, or in all
jurisdictions or in all cases, because of the conflict of any provision with any
constitution or statute or rule of public policy or for any other reason, such
circumstance shall not have the effect of rendering the provision or provisions
in question invalid, inoperative or unenforceable in any other jurisdiction or
in any other case or circumstance or of rendering any other provision or
provisions herein contained invalid, inoperative or unenforceable to the extent
that such other provisions are not themselves actually in conflict with such
constitution, statute or rule of public policy, but this Agreement shall be
45
reformed and construed in any such jurisdiction or case as if such invalid,
inoperative or unenforceable provision had never been contained herein and such
provision reformed so that it would be valid, operative and enforceable to the
maximum extent permitted in such jurisdiction or in such case.
12.8 Counterparts, Etc. This Agreement may be executed in two (2) or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement
constitutes the entire agreement of the parties hereto with respect to the
subject matter hereof and shall supersede and take the place of any other
instruments purporting to be an agreement of the parties hereto relating to the
subject matter hereof. This Agreement may not be amended or modified in any
respect other than by the written agreement of all of the parties hereto.
12.9 Governing Law; Jurisdiction; Waiver of Jury Trial.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA. THE PARTIES RECOGNIZE THAT,
WITH RESPECT TO SOME OF THE PROPERTIES, IT MAY BE NECESSARY FOR THE PARTIES TO
COMPLY WITH CERTAIN ASPECTS OF THE LAWS OF OTHER STATES IN ORDER TO CONSUMMATE
THE PURCHASE AND SALE OF SUCH PROPERTIES PURSUANT HERETO. THE PARTIES AGREE TO
COMPLY WITH SUCH OTHER LAWS TO THE EXTENT NECESSARY TO CONSUMMATE THE PURCHASE
AND SALE OF SUCH PROPERTIES. IT IS THE PARTIES' INTENT THAT THE PROVISIONS OF
THIS AGREEMENT BE APPLIED TO EACH PROPERTY IN A MANNER THAT RESULTS IN THE
GREATEST CONSISTENCY POSSIBLE.
(b) For the purposes of any suit, action or proceeding
involving this Agreement, Sellers and Purchaser hereby expressly submit to the
jurisdiction of all federal and state courts sitting in the State of Florida and
consents that any order, process, notice of motion or other application to or by
any such court or a judge thereof may be served within or without such court's
jurisdiction by registered mail or by personal service; provided that a
reasonable time for appearance is allowed, and Purchaser agrees that such courts
shall have the exclusive jurisdiction over any such suit, action or proceeding
commenced by any party. In furtherance of such agreement, Purchaser agrees upon
the request of any party to discontinue (or agree to the discontinuance of) any
such suit, action or proceeding pending in any other jurisdiction.
(c) Purchaser hereby irrevocably waives any objection that
Purchaser may now or hereafter have to the laying of venue of any suit, action
or proceeding arising out of or relating to this Agreement brought in any
federal or state court sitting in the State of Florida and hereby further
irrevocably waives any claim that any such suit, action or proceeding brought in
any such court has been brought in an inconvenient forum.
(d) EACH PARTY HEREBY WAIVES, IRREVOCABLY AND UNCONDITIONALLY,
TRIAL BY JURY IN ANY ACTION BROUGHT ON, UNDER OR BY VIRTUE OF OR RELATING IN ANY
WAY TO THIS AGREEMENT OR ANY OF THE DOCUMENTS EXECUTED IN CONNECTION HEREWITH,
THE PROPERTIES, OR ANY
46
CLAIMS, DEFENSES, RIGHTS OF SET-OFF OR OTHER ACTIONS PERTAINING HERETO OR TO ANY
OF THE FOREGOING.
12.10 Performance on Business Days. In the event the date on which
performance or payment of any obligation of a party required hereunder is other
than a Business Day, the time for payment or performance shall automatically be
extended to the first Business Day following such date.
12.11 Attorneys' Fees. If any lawsuit or arbitration or other legal
proceeding arises in connection with the interpretation or enforcement of this
Agreement, the prevailing party therein shall be entitled to receive from the
other party the prevailing party's costs and expenses, including reasonable
attorneys' fees, incurred in connection therewith, in preparation therefor and
on appeal therefrom, which amounts shall be included in any judgment therein.
12.12 Relationship. Nothing herein contained shall be deemed or
construed by the parties hereto, nor by any third party, as creating the
relationship of principal and agent or of partnership or joint venture between
the parties hereto, it being understood and agreed that (except as and to the
extent specifically provided for herein) no provision contained herein, nor any
acts of the parties hereto shall be deemed to create the relationship between
the parties hereto other than the relationship of seller and purchaser and
landlord and prospective tenant, as the case may be.
12.13 Section and Other Headings. The headings contained in this
Agreement are for reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement.
12.14 Disclosure. From and after Closing Date, and at the written
request of Purchaser, each Seller shall provide such financial statements in
respect of Seller's operations relating to its Property from the date of
Seller's commencement of business to the Closing Date to the extent such
financial statements are required by applicable securities laws and regulations
and the SEC's interpretation thereof or under GAAP or governance or other
policies of the REIT; provided, however, that (i) such Seller reserves the
right, in good faith, to challenge, and require Purchaser to use commercially
reasonable efforts to challenge, any assertion by the SEC, any other applicable
regulatory authority, or Purchaser's independent public accountants that
applicable law or regulations require the provision of such financial
statements, (ii) Purchaser shall not, without such Seller's consent (which
consent shall not be unreasonably withheld, delayed or conditioned), acquiesce
to any such challenged assertion until Purchaser has exhausted all reasonable
available avenues of administrative review, and (iii) Purchaser shall consult
with such Seller in pursuing any such challenge and will allow Seller to
participate therein if and to the extent that Seller so elects.
12.15 Acknowledgment of the Financial Condition of the Parties. Sellers
and Purchaser, (by their signatures below) and each Applicable Property
Transferee (by executing the Assignment of Purchase and Sale Agreement between
Purchaser and the Applicable Property Transferees) hereby (i) acknowledge that
they have received information concerning the financial condition of each of the
parties hereto, and (ii) agree that, in light of the obligations of the
respective parties under this Agreement and all other documents executed
pursuant to this
47
Agreement (collectively the "Transaction Documents"), the financial condition of
each party hereto and the Applicable Property Transferees is acceptable to all
such entities for the carrying out of each such Entity's respective obligations
under the Transaction Documents.
12.16 Cross-Default with Niles Sale Agreement. Niles Lifestyle Limited
Partnership is owned or controlled, directly or indirectly, by the same parties
that own or control Sellers. It is understood and agreed that, Sellers and
Purchaser contemplated that simultaneously with the execution and delivery of
this Agreement, Purchaser would enter into the Niles Sale Agreement with Niles
Lifestyle Limited Partnership. The execution version of the Niles Sale Agreement
has not been prepared but the parties agree to negotiate in good xxxxx x Xxxxx
Sale Agreement which will be dated as of the Effective Date and in substantially
the same form as this Agreement, with such modifications as may be necessary to
reflect the terms of the November 26, 2003 letter of intent relating to the
transactions contemplated by the Niles Sale Agreement. If the Niles Sale
Agreement has not been executed by December 30, 2003, either party may terminate
this Agreement by not later than 11:59 p.m. EST on December 30, 2003. Sellers
and Purchaser agree: (i) if there is a default by Sellers or Purchaser under
this Agreement, such default shall also be deemed to have occurred by the same
party under the Niles Sale Agreement; (ii) if there is a default by Niles
Lifestyle Limited Partnership or Purchaser under the Niles Sale Agreement, such
default shall also be deemed to have occurred, by Seller or Purchaser, as
applicable, under this Agreement; (iii) a termination of this Agreement (but not
a termination as to less than the entire Agreement) by either party pursuant to
a right to do so hereunder shall also terminate the Niles Sale Agreement; and
(iv) a termination of the Niles Sale Agreement by either party pursuant to a
right to do so thereunder, other than as a result of the effect of the
condemnation and casualty provisions thereof, shall also terminate this
Agreement.
12.17 Waiver Regarding California Property. With respect to each of the
California Properties, Purchaser specifically waives the provisions of
California Code Section 1542, which provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH IF KNOWN TO HIM MUST HAVE MATERIALLY AFFECTED THE SETTLEMENT WITH THE
DEBTOR.
Purchaser agrees, represents and warrants that the aforementioned
waiver of California Code Section 1542 has been negotiated and agreed upon and
that Purchaser hereby intends to release, discharge and acquit the applicable
Sellers from any such unknown causes of action, claims, demands, debts,
controversies, damages, costs, losses and expenses with respect to the
California Properties; provided, however, that the foregoing shall not relieve
such Sellers of any disclosures required pursuant to this Section 12.17.
[Signature pages follow]
48
IN WITNESS WHEREOF, the parties have caused this Purchase and Sale Agreement to
be executed as a sealed instrument as of the Effective Date.
SELLERS:
THE PARK AT RIVERCHASE (AL):
RIVERCHASE ASSISTED LIVING, LTD.,
a Texas limited partnership
By: WXI/Senior Lifestyle Riverchase Gen-Par, L.L.C.,
a Delaware limited liability company,
its General Partner
By: Integrated Living Communities, L.L.C.,
a Delaware limited liability company,
its Sole Member
By: /s/ Xxx X. XxXxxx
-----------------------------------
Xxx X. XxXxxx
Vice President and
Chief Financial Officer
THE HERITAGE PALMERAS (AZ):
SENIOR LIFESTYLE HERITAGE, L.L.C.,
a Delaware limited liability company
By: WHSLA Real Estate Limited Partnership,
a Delaware limited partnership,
its Sole Member
By: WHSLA Gen-Par, Inc.,
a Delaware corporation,
its General Partner
By: /s/ Xxx X. XxXxxx
-----------------------------------
Xxx X. XxXxxx
Vice President and
Chief Financial Officer
[SIGNATURES FOR PURCHASE AND SALE AGREEMENT CONTINUE
ON THE FOLLOWING PAGES]
X-0
XXXXXXXXXX XXXXXX XXX XXXXXX XXXXX XXXX (XX):
INTEGRATED MANAGEMENT - XXXXXXXXXX POINTE, L.L.C.,
a Delaware limited liability company
By: /s/ Xxx X. XxXxxx
-----------------------------------
Xxx X. XxXxxx
Vice President and
Chief Financial Officer
HERON'S RUN (FL):
INTEGRATED LIVING COMMUNITIES OF WEST
PALM BEACH, L.L.C.,
a Delaware limited liability company
By: /s/ Xxx X. XxXxxx
-----------------------------------
Xxx X. XxXxxx
Vice President and
Chief Financial Officer
[SIGNATURES FOR PURCHASE AND SALE AGREEMENT CONTINUE
ON THE FOLLOWING PAGES]
X-0
XXXXXXX XXXXX AND THE POINTE AT NEWPORT PLACE (FL):
SENIOR LIFESTYLE NEWPORT LIMITED
PARTNERSHIP,
a Delaware limited partnership
By: SLC Newport, Inc.,
a Delaware corporation,
its General Partner
By: /s/ Xxx X. XxXxxx
-----------------------------------
Xxx X. XxXxxx
Vice President and
Chief Financial Officer
PINECREST PLACE (FL):
SENIOR LIFESTYLE PINECREST LIMITED
PARTNERSHIP,
a Delaware limited partnership
By: SLC Pinecrest, Inc.,
a Delaware corporation,
its General Partner
By: /s/ Xxx X. XxXxxx
-----------------------------------
Xxx X. XxXxxx
Vice President and
Chief Financial Officer
[SIGNATURES FOR PURCHASE AND SALE AGREEMENT CONTINUE
ON THE FOLLOWING PAGES]
S-3
PROSPERITY OAKS (FL):
SENIOR LIFESTYLE PROSPERITY LIMITED PARTNERSHIP,
a Delaware limited partnership
By: Prosperity Gen-Par, Inc.,
a Delaware corporation,
its General Partner
By: /s/ Xxx X. XxXxxx
-----------------------------------
Xxx X. XxXxxx
Vice President and
Chief Financial Officer
WATERSIDE RETIREMENT ESTATES (FL):
INTEGRATED LIVING COMMUNITIES OF
SARASOTA, L.L.C.,
a Delaware limited liability company
By: /s/ Xxx X. XxXxxx
-----------------------------------
Xxx X. XxXxxx
Vice President and
Chief Financial Officer
[SIGNATURES FOR PURCHASE AND SALE AGREEMENT CONTINUE
ON THE FOLLOWING PAGES]
X-0
XXX XXXX XX XXXXXXX XXXXXX (XX):
OLYMPIA FIELDS SENIOR HOUSING, L.L.C.,
a Delaware limited liability company
By: WHSLC Realty, L.L.C.,
a Delaware limited liability company
By: WHSLH Realty, L.L.C.,
a Delaware limited liability company,
its member
By: /s/ Xxx X. XxXxxx
-----------------------------------
Xxx X. XxXxxx
Vice President and
Chief Financial Officer
[SIGNATURES FOR PURCHASE AND SALE AGREEMENT CONTINUE
ON THE FOLLOWING PAGES]
S-5
EAST BAY MANOR (RI):
SENIOR LIFESTYLE EAST BAY LIMITED
PARTNERSHIP,
a Delaware limited partnership
By: SLC East Bay, Inc.,
a Delaware corporation,
its General Partner
By: /s/ Xxx X. XxXxxx
-----------------------------------
Xxx X. XxXxxx
Vice President and
Chief Financial Officer
EMERALD BAY MANOR (RI):
SENIOR LIFESTYLE EMERALD BAY LIMITED
PARTNERSHIP,
a Delaware limited partnership
By: SLC Emerald Bay, Inc.,
a Delaware corporation,
its General Partner
By: /s/ Xxx X. XxXxxx
-----------------------------------
Xxx X. XxXxxx
Vice President and
Chief Financial Officer
GREENWICH BAY MANOR (RI):
GREENWICH BAY, L.L.C.,
a Delaware limited liability company
By: /s/ Xxx X. XxXxxx
-----------------------------------
Xxx X. XxXxxx
Vice President and
Chief Financial Officer
[SIGNATURES FOR PURCHASE AND SALE AGREEMENT CONTINUE
ON THE FOLLOWING PAGES]
X-0
XXXXX XXX XXXXX (RI)
SENIOR LIFESTYLE NORTH BAY LIMITED
PARTNERSHIP,
a Delaware limited partnership
By: SLC North Bay, Inc.,
a Delaware corporation,
its General Partner
By: /s/ Xxx X. XxXxxx
-----------------------------------
Xxx X. XxXxxx
Vice President and
Chief Financial Officer
SAKONNET BAY MANOR (RI):
SENIOR LIFESTYLE SAKONNET BAY LIMITED
PARTNERSHIP,
a Delaware limited partnership
By: SLC Sakonnet Bay, Inc.,
a Delaware corporation,
its General Partner
By: /s/ Xxx X. XxXxxx
-----------------------------------
Xxx X. XxXxxx
Vice President and
Chief Financial Officer
SOUTH BAY MANOR (RI):
SOUTH BAY MANOR, L.L.C.,
a Delaware limited liability company
By: /s/ Xxx X. XxXxxx
-----------------------------------
Xxx X. XxXxxx
Vice President and
Chief Financial Officer
[SIGNATURES FOR PURCHASE AND SALE AGREEMENT CONTINUE
ON THE FOLLOWING PAGES]
X-0
XXXX XXX XXXXX (RI):
WEST BAY MANOR, L.L.C.,
a Delaware limited liability company
By: /s/ Xxx X. XxXxxx
-----------------------------------
Xxx X. XxXxxx
Vice President and
Chief Financial Officer
TREEMONT RETIREMENT COMMUNITY (TX):
INTEGRATED LIVING COMMUNITIES OF
DALLAS, L.P.,
a Delaware limited partnership
By: Integrated Living Communities of Dallas Gen-Par,
L.L.C.,
a Delaware limited liability company,
its General Partner
By: /s/ Xxx X. XxXxxx
-----------------------------------
Xxx X. XxXxxx
Vice President and
Chief Financial Officer
The undersigned, Cherry Hills Club, L.L.C. is executing this Purchase and Sale
Agreement for the sole purpose of evidencing its agreement to its covenants set
forth in Section 8.5.
CHERRY HILLS CLUB, L.L.C.,
a Delaware limited liability company
By: /s/ Xxx X. XxXxxx
-----------------------------------
Xxx X. XxXxxx
Vice President and
Chief Financial Officer
[SIGNATURES FOR PURCHASE AND SALE AGREEMENT CONTINUE
ON THE FOLLOWING PAGES]
S-8
PURCHASER:
CNL RETIREMENT CORP., A FLORIDA CORPORATION
By: /s/ Xxxxxx Xxxxxxx
----------------------------------------
Xxxxxx Xxxxxxx
Chief Investment Officer
S-9