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Exhibit 2.2
AGREEMENT OF PURCHASE AND SALE
(Construction Residences)
By and Between
HCR MANOR CARE, INC.
and
ALTERNATIVE LIVING SERVICES, INC.
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TABLE OF CONTENTS
PAGE
1. PURCHASE AND SALE OF CONSTRUCTION RESIDENCES.....................................................................6
A. Real Property...........................................................................................6
B. Residency Agreements....................................................................................7
C. Leases..................................................................................................7
D. Improvements............................................................................................8
E. Personal Property.......................................................................................8
F. Service Contracts.......................................................................................9
G. Related Interests.......................................................................................9
2. PURCHASE PRICE FOR THE CONSTRUCTION RESIDENCES..................................................................11
A. Payment................................................................................................11
B. Allocation.............................................................................................11
C. Calculation of Purchase Price..........................................................................12
3. [INTENTIONALLY DELETED].........................................................................................12
4. CLOSING.........................................................................................................12
A. Delivery; Possession...................................................................................12
B. Transfer Taxes.........................................................................................13
C. Seller's Closing Costs.................................................................................13
D. Purchaser's Closing Costs..............................................................................13
E. Existing Fines and Penalties...........................................................................13
F. Other Costs............................................................................................13
5. TITLE...........................................................................................................13
A. Examination of Title...................................................................................14
B. Survey Matters.........................................................................................15
6. PRORATIONS AND CREDITS AT CLOSING...............................................................................16
A. Real Estate Taxes and Assessments......................................................................16
B. Prepaid Resident Rent..................................................................................16
C. Custodial Accounts.....................................................................................16
D. Rents..................................................................................................16
E. Security Deposits......................................................................................17
F. Utility Expenses and Payments..........................................................................17
G. Utility Deposits.......................................................................................17
H. Service Contract Payments..............................................................................17
I. Personal Property Taxes................................................................................17
J. Accrued Benefits.......................................................................................18
K. Payroll................................................................................................18
L. Reproration after Closing..............................................................................18
M. Performance of Obligations.............................................................................18
7. ACCOUNTS RECEIVABLE.............................................................................................18
8. CONVEYANCES AND DELIVERIES AT EACH RESIDENCE CLOSING............................................................19
A. Deed; Affidavit........................................................................................19
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B. ▇▇▇▇ of Sale...........................................................................................19
C. Assignment of Residency Agreements and Leases..........................................................19
D. Assignment of Service Contracts........................................................................20
E. Notices of Assignment..................................................................................20
F. Books and Records, Floor Plans, Plans and Specifications, Medical Records, Original
Documents and Other Instruments........................................................................20
G. Section 1445 Certificate; Form 8594....................................................................20
H. Termination of Management Agreement and Service Contracts..............................................21
I. Closing Statement......................................................................................21
J. Reaffirmation of Representations and Warranties........................................................21
K. Other Conveyances and Instruments......................................................................21
9. SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS...................................................................21
A. Title to Personal Property; Condition of Personal Property.............................................21
B. Residency Agreements and Leases........................................................................22
C. Title to Improvements; Condition of Improvements.......................................................23
D. No Other Leases/Occupancies............................................................................23
E. Other Contracts........................................................................................23
F. Service Contracts......................................................................................24
G. Intentionally Deleted..................................................................................24
H. Accuracy and Completeness of Other Seller Documents and Records........................................24
I. Litigation and Other Proceedings.......................................................................24
J. Compliance of Property With Zoning and Other Laws......................................................24
K. Environmental Matters..................................................................................25
L. No Options or Other Interests..........................................................................25
M. Assessments, Fees and Liens............................................................................25
N. Pending Assessments and Condemnation Proceedings.......................................................26
O. Disclosure.............................................................................................26
P. Authority..............................................................................................26
Q. Licensure and Regulatory Matters.......................................................................26
R. Reports................................................................................................27
S. Employees; Unions......................................................................................27
10. PURCHASER'S REPRESENTATIONS AND WARRANTIES......................................................................27
A. Organization, Power and Authority......................................................................27
B. No Bankruptcy..........................................................................................28
11. PRE-CLOSING COVENANTS...........................................................................................28
A. Inspection of Property.................................................................................28
B. Compliance with Laws, Leases, Contracts................................................................28
C. Standard of Construction...............................................................................28
D. New Leases and Modifications to Existing Leases; Residency Agreements..................................28
E. New Service Contracts and Modifications to Existing Service Contracts..................................29
F. Notice of Revision of Representations Due to Discovery of New Facts....................................29
G. Personal Property Inventory............................................................................29
H. Transfer of Permits....................................................................................29
I. Compliance of Improvements and Real Property...........................................................30
J. Existing Employees.....................................................................................30
K. Notices and Consents...................................................................................30
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12. PURCHASER'S INSPECTION OF PROPERTY..............................................................................31
A. Access.................................................................................................31
B. Termination Election...................................................................................31
C. Right to Update Information, including Representations and Warranties..................................32
13. CONDITIONS TO EACH RESIDENCE CLOSING............................................................................32
A. Conditions to Each Parties'Obligation to Close.........................................................32
B. Conditions to Purchaser's Obligation to Close..........................................................33
14. SELLER'S OPTIONS UPON FAILURE OF PURCHASER CLOSING CONDITION....................................................33
A. Deferral of Residence Closing Date.....................................................................34
B. Indemnification and Cure...............................................................................34
C. Withdrawal of Residence................................................................................34
D. Withdrawal and Substitution............................................................................34
15. NOTICES.........................................................................................................34
16. CASUALTY AND CONDEMNATION.......................................................................................36
A. Casualty...............................................................................................36
B. Condemnation...........................................................................................36
17. BROKERS.........................................................................................................37
18. DEFAULT.........................................................................................................37
19. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION.....................................................38
A. Survival of Representations and Warranties.............................................................38
B. Seller's Indemnification Obligations...................................................................38
C. Purchaser's Indemnification Obligations................................................................39
D. Procedure for Indemnification Claims...................................................................39
20. CAMPUS PROPERTIES...............................................................................................40
21. POST-CLOSING DELIVERY OF SCHEDULES..............................................................................41
22. CLOSING COMPLETED RESIDENCE; CLOSING PRIOR TO COMPLETION OF CONSTRUCTION........................................42
A. Completed Residence Defined............................................................................42
B. Incomplete Residence...................................................................................42
23. CONSTRUCTION OVERSIGHT AND RELATED ISSUES.......................................................................43
A. Approval of Plans and Specifications...................................................................43
B. Employees; Pre-Opening Expenses........................................................................43
C. Change Orders..........................................................................................44
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24. TERMINATION.....................................................................................................44
25. GENERAL PROVISIONS..............................................................................................44
A. Agreement Binding; Assignment..........................................................................44
B. Entire Agreement.......................................................................................45
C. Execution Necessary....................................................................................45
D. Time is of the Essence.................................................................................45
E. Governing Law..........................................................................................45
F. Interpretation; Date of Agreement......................................................................45
G. Waiver.................................................................................................45
H. Facsimile Signature; Counterparts......................................................................46
I. Non-Waiver.............................................................................................46
J. Rights Cumulative......................................................................................46
K. Schedules..............................................................................................46
L. Attorneys'Fees.........................................................................................46
SCHEDULES
Schedule I Address, Name of Seller Entity Owner, Licensing Category and
Numbers of Units/Beds for each of the Construction Residences
Schedule II List of Operating Residences
Schedule 1-B Residency Information for each of the Construction
Residences*
Schedule 1-C Lease Summary Information for each of the Construction
Residences*
Schedule 1-E(i) Excluded Personal Property for each of the
Construction Residences*
Schedule 1-E(ii) List of Personal Property for each of the Construction
Residences*
Schedule 1-F List of Service Contracts for each of the Construction
Residences*
Schedule 9-A Aggregate Limits on Past Due Rent for each of the Construction
Residences*
Schedule 9-B Description of Pending Litigation and Licensing Warnings
or Violations*
Schedule 9-C Zoning Matters for each of the Construction Residences*
Schedule 9-D Employee Matters for each of the Construction Residences*
Schedule 18 Applicable Liquidated Damages Amounts
Schedule 20 Campus Properties
Schedule 23 Construction Items
* To be delivered by Seller to Purchaser post-execution (see Section 21)
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AGREEMENT OF PURCHASE AND SALE
(Construction Residences)
THIS AGREEMENT OF PURCHASE AND SALE (this "Agreement") is made and
entered into effective as of the 31st day of December, 1998, by and between HCR
MANOR CARE, INC., a Delaware corporation ("HCR Manor Care"), the wholly-owned
subsidiaries of HCR Manor Care that are signatories hereto (which together with
HCR Manor Care are collectively referred to as "Seller"), and ALTERNATIVE LIVING
SERVICES, INC., a Delaware corporation (together with its transferees and
assigns hereinafter referred to as "Purchaser").
W I T N E S S E T H:
WHEREAS, Seller is developing and constructing the eight (8) assisted
living and dementia care residences being more particularly identified on
Schedule I attached hereto and incorporated herein by reference (collectively,
and as more particularly described in Section 1 hereof, the "Construction
Residences", as such term is more particularly defined below) and Seller owns
and operates the twenty-one (21) assisted living and dementia care residences
being more particularly identified on Schedule II attached hereto and
incorporated herein by reference (collectively, the "Operating Residences"); and
WHEREAS, Seller desires to sell, and Purchaser desires to purchase,
each of (i) the Construction Residences in accordance with the terms and
conditions hereinafter set forth and (ii) the Operating Residences in accordance
with the terms and conditions set forth in the Agreement of Purchase and Sale
(Operating Residences) dated as of the date hereof by and between Purchaser, HCR
Manor Care and certain wholly-owned subsidiaries of HCR Manor Care (the
"Operating Purchase Agreement").
NOW, THEREFORE, for and in consideration of the foregoing, the sum of
Ten Dollars ($10.00) and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Purchaser and Seller hereby agree
as follows:
1. PURCHASE AND SALE OF CONSTRUCTION RESIDENCES.
Upon and subject to the terms and conditions set forth in this
Agreement, Purchaser shall purchase from Seller, and Seller shall sell to
Purchaser, good and marketable fee simple title in and to the following
described property:
A. Real Property. All those tracts or parcels of land having the street
addresses described on Schedule I attached hereto and made a part hereof (the
"Land"), including, without limitation, (a) any and all buildings or structures
located on the Land and all other Improvements (as hereinafter defined), (b) to
the extent assignable and subject to the receipt of any approvals needed for
assignments, which Seller shall use commercially reasonable efforts to obtain
upon
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request by Purchaser, all easements appurtenant to the Land and other licenses,
grants of right, privileges or other agreements for the benefit of, belonging to
or appurtenant to the Land regardless of whether situate upon the Land, and
regardless of whether specifically referenced on Schedule I attached hereto, (c)
to the extent assignable and subject to the receipt of any approvals needed for
assignment, which Seller agrees to use commercially reasonable efforts to obtain
upon request by Purchaser, all mineral, oil and gas rights, riparian rights,
water rights, sewer rights and other utility rights allocated to the Land, (d)
to the extent assignable and subject to the receipt of any approvals needed for
assignment, which Seller agrees to use commercially reasonable efforts to obtain
upon request by Purchaser, all right, title and interest, if any, of Seller in
and to any and all ▇▇▇▇▇▇, strips and gores of land located on or adjacent to
the Land, (e) to the extent assignable and subject to the receipt of any
approvals needed for assignment, which Seller agrees to use commercially
reasonable efforts to obtain upon request by Purchaser, all right, title and
interest of the owner of the Land in and to any roads, streets and ways, public
or private, open or proposed, in front of or adjoining all or any part of the
Land and serving the Land, and (f) to the extent assignable and subject to the
receipt of any approvals needed for assignment, which Seller agrees to use
commercially reasonable efforts to obtain upon request by Purchaser, all rights
to development of the Land granted by governmental entities having jurisdiction
over the Land (the Land and all of the foregoing interests are sometimes
hereinafter collectively referred to as the "Real Property"). To the extent that
Purchaser and Seller determine that the parcel of Real Property identified as a
"Campus Property" on Schedule 20 cannot as a practical matter be legally
subdivided from the adjacent facility or facilities campused therewith, then and
in such event Purchaser and Seller agree that such parcel shall be governed by
the terms and provisions of Section 20 of this Agreement.
B. Residency Agreements. All residency agreements, entrance agreements
and other agreements for use or occupancy of all or any portion of each of the
Construction Residences entered into by all current or future Residents (as
hereinafter defined) (collectively, the "Residency Agreements"), together with
all prepaid rents and advance rentals (other than the monthly residence fees
paid by Residents in advance for the month in which the Residence Closing Date
(as hereinafter defined) occurs) and all security deposits (collectively, the
"Advances") with respect to the Residency Agreements and the guaranties or
warranties of payment by all guarantors or co-signers with respect to the
Residency Agreements. The name or room number of each current or future occupant
or resident under the Residency Agreements (herein referred to as a "Resident"
or "Residents") for each Construction Residence, the name of each Seller entity
that is a party to the Residency Agreements for such Construction Residence, the
current or future rental payable thereunder, the date of the Residency
Agreement, and the amount of any past due or delinquent rental and the Advances
therefor, will be set forth on Schedule 1-B, which Schedule shall be delivered
by Seller to Purchaser as provided in Section 21 hereof (the "Rent Roll").
C. Leases. Any other agreements for use or occupancy of any portion of
any of the Construction Residences, excluding only the Residency Agreements,
including without limitation all leases, subleases and rental agreements
(collectively, the "Leases"), together with all rights appurtenant thereto and
any prepaid rents and advance rentals (other than the monthly rental paid by a
tenant in advance for the month in which the Residence Closing Date occurs) and
all security deposits with respect to the Leases (which, together with the
Advances, are
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hereinafter collectively called the "Deposits"). The name of each tenant or
lessee under the Leases (hereinafter referred to as a "Tenant" or collectively
"Tenants") for each Construction Residence, the names of each Seller entity that
is a party to such Lease, the date of each Lease, the current rental payable
thereunder, any past due or delinquent rental and the Deposits therefor, will be
set forth on Schedule 1-C, which Schedule shall be delivered by Seller to
Purchaser as provided in Section 21 hereof (the "Lease Summary").
D. Improvements. All buildings, structures (surface and subsurface) and
other improvements and fixtures situated on or attached to or constituting a
portion of all or any portion of the Real Property (herein collectively referred
to as the "Improvements").
E. Personal Property. All tangible personal property of Seller located
at the Construction Residences and used or useable in connection with any
present or future occupation, operation or maintenance of all or any part of the
Real Property or the Improvements or both, together with (to the extent not
constituting a portion of the Real Property or the Improvements) all fixtures,
trade fixtures, furniture, furnishings, carpeting, draperies, linens, fittings,
equipment, machinery, apparatus and appliances of Seller, now located on the
Real Property and used or useable in connection with any present or future
occupation or operation of all or any part of the Real Property or the
Improvements or both, including, without limitation, all elevators, escalators,
boilers, furnaces, heating, ventilating and air-conditioning systems,
furnishings and equipment, building drawings, plans and specifications, building
materials and wall partitions, sprinkler and well systems, sewerage systems,
electrical equipment, fire prevention and extinguishing apparatus, engineering,
maintenance, cooking, housekeeping and medical or therapeutical supplies and
materials, mowers and edgers and other lawn maintenance equipment and supplies,
vans, buses, automobiles or other motor vehicles, fuel and other supplies of all
kinds whether used, unused or in stock for future use in connection with the
occupation, maintenance or operation of the Construction Residences, which are
on hand on the date hereof, but excluding any of the foregoing used in
connection with the construction of the Construction Residences and not intended
for use in the operations of the Construction Residences, subject to such
depletion and including such resupplying as shall occur and which Seller is
hereby obligated to make in the ordinary course of preparing the Construction
Residences for operation as an ongoing business (the aforesaid items, subject to
the foregoing and following exclusions, are hereinafter collectively referred to
as the "Personal Property"), excluding however (i) all items of personal
property which are the property of Residents or Tenants, (ii) the rights of the
owner of any equipment leased pursuant to, or owned by parties other than Seller
(and which are not affiliated with Seller) pursuant to the Service Contracts, as
hereinafter defined and (iii) those items of Personal Property specifically
excluded hereunder which will be more particularly set forth on Schedule 1-E(i),
which Schedule shall delivered by Seller to Purchaser as provided in Section 21
hereof and which may include items of Personal Property owned or leased by
affiliates of Seller. A current inventory of all material items of the Personal
Property for each Construction Residence will be set forth on Schedule 1-E(ii),
which shall be delivered by Seller to Purchaser as provided in Section 21 hereof
(the "Personal Property Inventory").
F. Service Contracts. To the extent assignable and subject to the
receipt of any consents to assignment which may be needed for assignment, which
Seller agrees to use
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commercially reasonable efforts to obtain upon request by Purchaser, all
service, supply, management, maintenance and other contracts for leasing,
management, maintenance or operation of the Construction Residences (other than
agreements relating to the construction of the Construction Residences) that
Purchaser is obligated to assume pursuant to the terms hereof, including, but
not limited to, all leases by which equipment is leased and is used or useable
in connection with any present or future occupation, operation or maintenance of
the Construction Residences, and all operating files relating to all of the
aforesaid, but not including any such contracts which, pursuant to the terms
hereof, Purchaser is not obligated to accept or assume (and does not elect to
assume) in connection with the purchase and sale contemplated in this Agreement
(herein collectively referred to as the "Service Contracts"). A summary list of
all Service Contracts in effect as of the date of this Agreement and all other
such contracts that Purchaser has not yet rejected but that Purchaser may reject
pursuant to the terms of this Agreement, including the identity of contract
parties, the date of contract, the expiration date of the contract, and the
amounts payable thereunder will be set forth on Schedule 1-F, which Schedule
shall be delivered by Seller to Purchaser as provided in Section 21 hereof (the
"List of Service Contracts").
G. Related Interests. Any and all of the following (hereinafter
collectively referred to as the "Related Interests"):
(i) The pre-opening business activities of Seller conducted at
the Construction Residences, including without limitation, all
intangible rights and interests associated with the Construction
Residences, any name or trade name by which the Improvements or the
Construction Residences or any part thereof may be currently be known,
including, but not limited to names used on the date hereof in
connection with the ownership and construction of the Construction
Residences, and all registrations for such names, or intangible rights
and interests, but expressly excluding the names "HCR", Health Care and
Retirement", "Heartland", "Manor Care", "Arden Court", "Spring House",
and any names including any of the foregoing or any derivations thereof
(the "Excluded Names") and all telephone numbers of Seller presently in
use therein, including without limitation goodwill and going concern
value, and any and all marketing materials, promotional materials,
letterhead, envelopes or other materials, but expressly excluding (a)
all cash and bank accounts (other than the Custodial Accounts, as
hereinafter defined) (b) all Receivables (as hereinafter defined) and
(c) all liabilities and obligations resulting from the activities of
Seller conducted at the Construction Residences prior to the applicable
Residence Closing Date (as hereinafter defined) except as expressly
assumed by Purchaser at the applicable Residence Closing Date to the
extent provided herein, provided, however that Seller makes no
representation or warranty whatsoever with regard to its right to use
any such name, trade name, telephone numbers or any other intangible
rights or registration thereafter;
(ii) To the extent assignable or transferable and subject to
receipt of any consents required for such assignments or transfers,
which Seller agrees to use commercially reasonable to obtain upon
request by Purchaser obtain prior to the applicable Residence Closing
Date, each and every bond, guaranty and warranty concerning the Real
Property, the Improvements and the Personal Property, including,
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without limitation, any roofing, air conditioning, heating, elevator or
other bond, guaranty and warranty relating to the construction,
maintenance or replacement of the Improvements or any portion thereof;
provided, that Purchaser shall assume any obligation of Seller with
respect to any such bond (including any obligation to provide related
security, which shall be released back to Seller);
(iii) To the extent in the possession of Seller or any
affiliate of Seller, all files relating to the original construction of
the Improvements and replacements made to the Improvements, as well as
all repair and maintenance files (including, without limitation, those
relating to the building systems such as elevators and HVAC systems),
and all operating manuals relating to the building systems;
(iv) All licenses, permits, accreditations, approvals and
certificates used in or relating to the construction, ownership,
occupancy or operation of any part of the Construction Residences,
including, without limitation, (a) any permit, license, accreditation
or other approval necessary under applicable federal, state or local
law in order to permit the construction or, upon completion of
construction for the operation of the Construction Residences as the
type of residence, and for the number of Residents, set forth with
respect to each such Construction Residence on Schedule 1 and (b) any
provider agreements with Medicaid, Medicare and any other third-party
payor programs entered into solely with respect to the Construction
Residences ((a) and (b) are hereinafter collectively referred to as the
"Permits"); provided, however, Seller's obligation to transfer or
assign the Permits is expressly limited to the extent and only to the
extent that the same can be assigned or transferred in accordance with
applicable law and subject to the receipt or satisfaction of any
approvals or other requirements for such assignment or transfer to
Purchaser, as is more particularly set forth below;
(v) All documents, charts, records and lists maintained with
respect to the Residents (subject to the respective Residents' rights
to access to their respective medical records as provided by law and
subject to confidentiality requirements);
(vi) Seller's books of account, accounting records and work
papers, files, reports and other records with respect to the
Construction Residences and the ownership, occupancy and operation of
any part of the Construction Residences, to the extent located at the
Construction Residences or specifically relating only to the
Construction Residences and in the possession or control of Seller,
including without limitation all licensing or regulatory reports,
surveys or correspondence with respect to the proposed or pending
licensing of the Construction Residences, the construction or operation
thereof, the compliance with all permits and applicable laws and other
similar matters;
(vii) All employee and personnel files, documents, records and
lists relating to operations at the Construction Residences;
(viii) All architectural drawings, plans and specifications,
architectural contracts, construction contracts, construction working
drawings and related files,
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documents and working papers in the possession or control of Seller
pertaining to the construction of the Construction Residences, as well
as copies of existing surveys;
(ix) Any appurtenant and reciprocal easements or other
instruments affecting the Real Property in the possession or control of
Seller, including all amendments and modifications and Seller's
operating files relating thereto; and
(x) All soils reports and environmental reports and surveys
prepared with respect to the Construction Residences and engineering
studies relating to completed projects at the Construction Residences,
together with all written communications and documents relating to such
reports and surveys sent or received by Seller or any affiliate of
Seller.
The Real Property, the Improvements, the Residency Agreements, the Leases, the
Deposits, the Service Contracts, the Personal Property and the Related Interests
related to and associated with a specific Construction Residence are herein
collectively referred to as the "Construction Residence." On or before the date
thirty (30) days after the date hereof, with respect to each of the Construction
Residences, Seller will provide access to Purchaser to the Residency Agreements
and Seller will deliver to Purchaser true, correct and complete copies of the
Leases, the Service Contracts and, with respect to the related Interests, copies
of any documents or correspondence that relate to items to be disclosed on
Schedules 9-A, 9-B, 9-C or 9-D and access to all other documents, books,
records, reports and files of Seller with respect to the Construction Residences
(such copies, documents, books, records and files are hereinafter collectively
referred to as the "Files"). Upon the Residence Closing Date for any
Construction Residence, Seller shall deliver originals of the Files with respect
to such Construction Residence to Purchaser to the extent Seller has not
previously done so and in accordance with other provisions of this Agreement,
and Seller shall continue to have access thereto as provided herein.
2. PURCHASE PRICE FOR THE CONSTRUCTION RESIDENCES.
A. Payment. Subject to adjustments as may be applicable pursuant to
Section 6 hereof, the purchase price for each Construction Residence shall be as
set forth on the Addendum of even date herewith by and between HCR Manor Care
and Purchaser (the "Addendum"), which Addendum is incorporated herein by
reference (each, the "Residence Purchase Price"). The Residence Purchase Price
for a Construction Residence shall be payable to Seller at the Residence Closing
Date for such Construction Residence in accordance with Section 4 hereof,
subject to the prorations and adjustments set forth herein, by wire transfer
through the federal reserve system in immediately available funds to an account
designated by Seller in advance.
B. Allocation. Purchaser and Seller hereby agree that within thirty
(30) days after the date of this Agreement, Seller will deliver to Purchaser
Seller's proposed calculation of the allocation of the Residence Purchase Price
among the Real Property, the Improvements, the Personal Property and the Related
Interests with respect to each Construction Residence, and thereafter Purchaser
and Seller will negotiate in good faith to finalize such allocation, such
allocation to be agreed upon between Purchaser and Seller on or prior to the
applicable Residence Closing Date. In the event Purchaser and Seller agree upon
the allocation, then at the
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Residence Closing Purchaser and Seller shall enter into an agreement to file IRS
Form 8594 reflecting such agreed upon allocation. If Purchaser and Seller are
unable to agree upon an allocation, then Purchaser and Seller shall each be
entitled to report the transaction to the IRS using their respective allocations
without further obligation to the other party with respect thereto.
C. Calculation of Purchase Price. The Residence Purchase Price for each
Construction Residence shall be as set forth on the Addendum, provided that such
Construction Residence is a Completed Residence (as hereinafter defined) on the
Residence Closing Date. In the event that any Construction Residence fails to
qualify as a Completed Residence on the Residence Closing Date, then and in such
event a portion of the Residence Purchase Price therefor shall be placed in
escrow as provided in Section 22.
3. [INTENTIONALLY DELETED].
4. CLOSING.
The closing or settlement of the purchase and sale of each of the
Construction Residences contemplated by this Agreement shall be held at such
time and at such place as Seller and Purchaser shall mutually agree, subject to
Section 22 hereof. The parties hereby acknowledge that, to facilitate an orderly
transition of the Construction Residences from Seller to Purchaser, it will
likely be desirable to schedule multiple closings whereby closings will be held
with respect to one or more (but less than all) of the Construction Residences
during the period commencing February 1, 1999. Notwithstanding the foregoing, in
the event that all conditions to closing with respect to any particular
Construction Residence have been either satisfied or waived by the party for
whose benefit they were imposed, and Seller and Purchaser have not agreed upon
an alternative closing date, time and place, a closing for such Construction
Residence shall be held at 10:00 a.m. on the date ten (10) days after Seller
shall have delivered to Purchaser evidence that such Construction Residence is a
Completed Residence, at the offices of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, 2700 International
Tower, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇., ▇.▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇. Each closing of one or
more Construction Residences contemplated hereby shall be referred to herein as
a "Residence Closing" and the date of any such Residence Closing shall be
referred to herein as the "Residence Closing Date."
A. Delivery; Possession. At the Residence Closing for any Construction
Residence, Seller shall deliver to Purchaser the items required of Seller as
elsewhere set forth herein and Purchaser shall deliver to Seller the Residence
Purchase Price, subject to the prorations and adjustments as herein provided,
and the items required of Purchaser as elsewhere set forth herein. Seller shall
deliver possession of the applicable Construction Residence to Purchaser at the
time of such Residence Closing, subject only to the applicable Permitted Title
Exceptions (as hereinafter defined).
B. Transfer Taxes. The parties agree that any and all city, county or
state conveyance or transfer taxes, state stamp or documentary taxes and surtax
stamps due upon the transfer of any Construction Residence or the deed
evidencing same (including recording costs) shall be borne by the party that
customarily pays such cost in the state in which the applicable
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Construction Residence is located. In the event that the parties are unable to
agree in good faith which party responsible for payment of such costs, then the
decision of Title Company (as hereinafter defined) as to whether sellers or
purchasers customarily bear such costs in such states shall be binding.
C. Seller's Closing Costs. Seller shall pay the costs (including
recording costs) of any cure of title defects required of Seller hereunder and
the fees and expenses of Seller's own attorneys. All costs of satisfying any and
all Monetary Encumbrances (as hereinafter defined), including without limitation
the amount of the outstanding principal, accrued but unpaid outstanding
interest, all prepayment penalties and all other sums that must be paid to cause
the holder of any Monetary Encumbrance to release such Monetary Encumbrance,
shall be borne by Seller.
D. Purchaser's Closing Costs. Purchaser shall pay the cost of the title
examinations, the premium for the Title Policies (as hereinafter defined), the
costs of any surveys of the Real Property obtained by Purchaser, the costs of
any other investigations, studies and appraisals conducted by Purchaser, and the
fees and expenses of Purchaser's own attorneys.
E. Existing Fines and Penalties. If any governmental authorities or
agencies have levied any fines, penalties or assessments against any
Construction Residence or Seller resulting from failure or alleged failure to
comply with any regulatory or other governmental requirements (hereinafter
collectively referred to as "Fines"), and Seller fails to pay any such Fines
prior to the Residence Closing for such Construction Residence, and the failure
to pay such Fines or any portion thereof (i) prevents the issuance or assignment
of any Permit to Purchaser necessary for Purchaser's operation of such
Construction Residence or results in the imposition of conditions to such Permit
unacceptable to Purchaser or (ii) otherwise prohibits Purchaser's right to
operate the Construction Residence for the licensure category and number of
Residents identified on Schedule 1, then the full amount of such Fines, together
with any additional penalties or interest, shall be withheld from the Residence
Purchase Price payable to Seller and shall be paid directly to the appropriate
governmental officials or agencies.
F. Other Costs. All other closing costs shall be paid by the party
incurring same.
5. TITLE.
At each Residence Closing, Seller shall convey and transfer to
Purchaser such good, indefeasible fee simple and marketable title to the
applicable Construction Residence as will enable Chicago Title Insurance Company
("Title Company") to issue its full coverage, American Land Title Association
Standard Coverage Owner's Policy of Title Insurance with the standard exceptions
therein deleted, and with endorsements to include, at a minimum, zoning, access,
comprehensive, survey and, if available in the state of such Construction
Residence, utility availability and contiguity coverage (collectively referred
to herein as the "Title Policy") in the amount of the applicable Residence
Purchase Price, subject only to those matters hereinafter defined as the
"Permitted Title Exceptions"; provided, however, in the event that Seller is
unable to comply with this sentence due to the existence of a Non-Monetary
Defect (as hereinafter defined) which does not constitute a Permitted Title
Exception, Seller shall not be deemed to be
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in default hereunder, but Purchaser shall not be obligated to close the
acquisition of the Construction Residence affected thereby and the parties shall
proceed as set forth in Section 14 hereof. Title to each Construction Residence
shall be free and clear of, and shall not be subject to mechanics',
materialmen's or similar liens, pledges, mortgages, deeds of trust, security
deeds, security agreements, liens, judgments, conditional sales contracts, UCC
financing statements or fixture filings, encumbrances, ground rents, past due
taxes or assessments, fines, levies or other encumbrances of a monetary nature
(herein collectively referred to as "Monetary Encumbrances") or leases,
tenancies, parties in possession, covenants, conditions, restrictions,
right-of-ways, easements, encroachments or any other agreements, contracts,
rights, acts or other matters of any nature affecting the title thereto, except
as permitted in this Agreement or the Permitted Title Exceptions.
A. Examination of Title. Provided that Seller delivers to Purchaser
copies of Seller's existing title policies (and not just commitments) and
surveys for the Construction Residences within ten (10) days after the date of
this Agreement, Purchaser shall have until the date forty-five (45) days after
the date of this Agreement to examine title to each of the Construction
Residences and to obtain Surveys (as hereinafter defined) and to deliver to
Seller copies of title commitments issued by Title Company and such Surveys.
Such forty-five (45) day period shall be extended one (1) day for each day that
Seller is late in delivering the copies of Seller's title policies and surveys
(provided that if Seller notifies Purchaser that Seller lacks such items, such
forty-five (45) day period shall commence as of the date of such notice).
Purchaser shall, within such period, notify Seller in writing of any defects in
title which may be revealed by Purchaser's examination (which defects may
include any matters revealed by the Surveys), including Monetary Encumbrances
and any title defects that are non-monetary in nature other than Permitted Title
Exceptions ("Non-Monetary Defects"). Purchaser agrees that Purchaser shall not
object to (A) any recorded utility easements serving only a Construction
Residence or any recorded utility easements serving adjacent properties and
located on the Real Property, but, with respect to all such recorded utility
easements Purchaser shall not object if and only to the extent (i) any building
constituting a part of the Improvements for such Construction Residence does not
encroach upon and is not constructed over such easement, (ii) such easement has
been located and identified by the surveyor on the Survey applicable thereto,
and (iii) such easement does not render title unmarketable or unreasonably
interfere with the current or future operations of the Construction Residence,
(B) any minor encroachments of improvements such as fences, paving or similar
improvements, and (C) any other matters as Purchaser in the exercise of good
faith reasonably determines will not have a material adverse impact on
Purchaser's operation of the Construction Residence or otherwise is a defect
that is not a material impediment to Purchaser's ability to finance or convey
such Construction Residence. (A) - (C) shall be deemed to be "Permitted Title
Exceptions" hereunder. Within ten (10) days after Seller's receipt of
Purchaser's notice with respect to any Construction Residence, Seller shall give
notice to Purchaser either (x) refusing to cure the applicable Non-Monetary
Defects or (y) setting forth Seller's intent to cure such Non-Monetary Defects
and stating in detail how Seller will accomplish same. Failure of Seller to
timely give such notice shall be deemed to be a refusal by Seller to cure any
such Non-Monetary Defects. Upon the later of receipt of Seller's notice or
expiration of the ten (10) day period, then Purchaser may, at any time prior to
ten (10) days after the receipt by Purchaser of Seller's response or expiration
of Seller's response time, by notice to Seller, (i) elect to terminate
Purchaser's obligation to purchase such Construction Residence
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pursuant to this Agreement, whereupon the provisions of Section 14 shall be
applicable with respect to such Construction Residence, or (ii) accept title to
such Construction Residence subject to the Non-Monetary Defects that Seller has
not undertaken to cure, in which event such Non-Monetary Defects, together with
all title exceptions and matters appearing on the Title Commitment with respect
to such Construction Residence to which Purchaser did not object, will be deemed
Permitted Title Exceptions hereunder. If Seller elects option (y) as to any
Construction Residence and at the applicable Residence Closing Seller fails to
cure the applicable Non-Monetary Defects in the manner Seller has undertaken to
so cure in its notice to Purchaser to the satisfaction of Purchaser, Purchaser
will again have the options set forth in (i) and (ii) above. Seller agrees not
to further voluntarily alter or encumber in any way title to any Construction
Residence after the date of this Agreement, except for encumbrances imposed in
the ordinary course of business of which Seller notifies Purchaser and which
Seller will cause to be removed at or prior to the applicable Residence Closing.
In the event that Purchaser fails to timely notify Seller of title defects as to
any Construction Residence, then such failure to notify Seller shall constitute
a waiver of Purchaser's right to object to any Non-Monetary Defects with respect
to any Construction Residence but shall not be a waiver of Seller's absolute
obligation hereunder to remove Monetary Encumbrances, nor a waiver of
Purchaser's right to object to matters that arise subsequent to such date.
Purchaser shall have the right to re-examine and update title to any
Construction Residence and update the applicable Survey through and including
the applicable Residence Closing Date and in the event any such examination or
update reveals any new matters first arising or appearing of record subsequent
to Purchaser's first examination of title (other than Permitted Title
Exceptions), then (i) if such new matters were voluntarily imposed by Seller in
violation of this Section 5.A, Seller shall be in default hereunder and the
provisions of Section 18.B shall apply or (ii) if such new matters were not
voluntarily imposed by Seller, then Purchaser shall have the right to object to
same and will again have the options set forth in (i) and (ii) above.
B. Survey Matters. Purchaser may obtain a current as-built plat of
survey ("Survey") of the Land for each Construction Residence. Each Survey shall
be prepared for and certified by a registered land surveyor licensed as such in
the state in which the Construction Residence is located. Purchaser's and
Seller's rights and obligations with regard to title defects revealed by Surveys
shall be those indicated in Section 5.A. above.
6. PRORATIONS AND CREDITS AT CLOSING.
In each proration set forth below, the portion thereof allocable to
periods beginning with the applicable Residence Closing Date shall be credited
to Purchaser, or charged to Purchaser, as applicable, as of 12:01 a.m. on the
applicable Residence Closing. The following items shall be prorated between
Purchaser and Seller or credited to Purchaser or Seller at the Residence Closing
of each Construction Residence:
A. Real Estate Taxes and Assessments. All ad valorem real estate taxes
with respect to the Construction Residence for the then current year shall be
prorated as of the applicable Residence Closing Date with Seller receiving a
credit for any such taxes paid in advance for any period after the applicable
Residence Closing Date or with Purchaser receiving a credit for the period prior
to and including the applicable Residence Closing Date for which such taxes have
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not been paid by Seller. Seller shall pay all assessments levied upon the
Construction Residence prior to the applicable Residence Closing Date. In the
event that tax bills for the current year's taxes are not available on the
applicable Residence Closing Date, taxes shall be prorated based upon the tax
bills for the previous year and increased or decreased based upon any known
increase or decrease in the assessed valuation or the millage rate. Seller and
Purchaser hereby agree that the parties shall, if necessary, re-prorate the
taxes when actual tax bills for the current year are available.
B. Prepaid Resident Rent. Purchaser shall receive a credit for any
advance payments made by any Residents of the applicable Construction Residence
to the extent attributable to the applicable Residence Closing Date and any
periods thereafter.
C. Custodial Accounts. At the applicable Residence Closing, Seller
shall provide Purchaser with a written account of all funds belonging to
Residents at the Construction Residence that are held by Seller in a custodial
capacity (the "Custodial Accounts"). Such accounting shall set forth the names
of the Residents for whom such funds are held, the amounts held on behalf of
each Resident and Seller's warranty that the accounting is true, correct and
complete. At the applicable Residence Closing, Seller will either assign
Seller's rights in the Custodial Accounts to Purchaser or Seller will cause the
funds in the Custodial Accounts to be transferred to new accounts designated by
Purchaser or Seller will otherwise comply with applicable laws if a different
procedure is required with respect thereto.
D. Rents. Rents, including without limitation all payments received by
Seller from any Tenants under any Leases applicable to the Construction
Residence and all payments of all Residents under any Resident Agreements
received prior to the Residence Closing Date shall be prorated as of the
applicable Residence Closing Date and the portion thereof allocable to periods
beginning with such Residence Closing Date shall be credited to Purchaser at
such Residence Closing. Any checks for any such rental payments received after
such Residence Closing by Seller and belonging in their entirety to Purchaser
shall be promptly endorsed to Purchaser by Seller and promptly transmitted to
Purchaser, and any checks for any rental payments received after such Residence
Closing by Seller and belonging in part to Seller and in part to Purchaser shall
be promptly deposited by Seller and the part thereof belonging to Purchaser
shall be promptly paid to Purchaser and the balance shall be retained by Seller.
In the event that on such Residence Closing Date there shall be any unpaid
rental payments due under any Lease, then (i) for a period of ninety (90) days
after the Residence Closing, any rental payment received by Purchaser with
respect to such Lease subsequent to such Residence Closing Date shall be applied
first to pay the current portion of such rental payment due Seller under such
Lease and the remaining portion of such rental payment, to the extent applicable
to a period beginning on or after such Residence Closing Date, shall be retained
by Purchaser in satisfaction of amounts owed to it, and (ii) thereafter
Purchaser may apply such amounts first to amounts owed to it. During such ninety
(90) day period, Purchaser shall use its reasonable efforts in the ordinary
course of business to collect for Seller amounts owed to Seller of which it has
knowledge, but shall not be required to employ counsel or any collection agency
or to initiate litigation, ejectment proceeding or use any extraordinary means
of collection. Seller shall at all times be entitled to pursue collection of any
amounts owed to it, and Purchaser shall cooperate with Seller in connection
therewith.
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E. Security Deposits. Purchaser shall receive a credit against the
applicable Residence Purchase Price at such Residence Closing for all Deposits
remaining outstanding to any Resident or Tenant for such Construction Residence.
F. Utility Expenses and Payments. Water, sewer, gas, waste fees, fire
protection, cable television, electric and all other utility expenses and
payments due or made with respect to such Construction Residence shall be
prorated as of such Residence Closing Date and the portion thereof allocable to
periods beginning with such Residence Closing Date shall be credited or charged
to Purchaser, as applicable, at such Residence Closing.
G. Utility Deposits. Seller shall receive a credit at such Residence
Closing for the amount of any utility or similar deposits made by Seller with
respect to such Construction Residence which are not refundable to Seller by the
holder thereof and which deposits are transferred to Purchaser at such Residence
Closing.
H. Service Contract Payments. All payments due or made under any
Service Contracts accepted by Purchaser in accordance with the provisions hereof
shall be prorated as of such Residence Closing Date and the portion thereof
allocable to periods beginning with such Residence Closing Date shall be charged
to Purchaser at such Residence Closing, and any amounts due under the Service
Contracts allocable to periods prior to such Residence Closing Date shall be
charged to Seller at such Residence Closing.
I. Personal Property Taxes. All ad valorem personal property or similar
taxes with respect to the Personal Property at such Construction Residence for
the current year shall be prorated as of such Residence Closing Date with Seller
receiving a credit for any such taxes paid in advance for any period after such
Residence Closing Date or with Purchaser receiving a credit for the period prior
to and including such Residence Closing Date for which such taxes have not been
paid by Seller. In the event that tax bills for the current year's taxes are not
available on such Residence Closing Date, taxes shall be prorated based upon the
tax bills for the previous year after taking into account any known increases or
decreases. Seller and Purchaser shall, if necessary, re-prorate the taxes when
actual tax bills for the current year are available.
J. Accrued Benefits. At such Residence Closing, Seller shall provide
Purchaser with a schedule of all accrued sick, vacation and personal holiday pay
earned, accrued and outstanding by Seller's employees working at such
Construction Residence ("Employees") as of such Residence Closing Date
("Seller's Benefits"), which schedule shall include the names, addresses and
amount of Seller's Benefits for each Employee to whom such amounts are owed, and
shall be certified as true, complete and correct by Seller. At such Residence
Closing, Seller shall be charged with the amount of Seller's Benefits, which at
Purchaser's election, (i) shall be paid directly to the respective Employee
entitled to same or (ii) with respect to Employees employed by Purchaser as of
such Residence Closing Date (such Employees, "Continued Employees"), shall be
credited to Purchaser.
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K. Payroll. Seller shall receive a charge for all salaries, benefits
and other payments owed to all Continued Employees of such Construction
Residence through and including 12:01 a.m. on such Residence Closing Date.
L. Reproration after Closing. In the event that the actual amounts of
any of the aforesaid proration items are unavailable as of such Residence
Closing Date, then such proration shall be made on the basis of an amount
reasonably estimated by Purchaser and Seller at such Residence Closing and
Purchaser and Seller shall thereupon re-prorate such items at such times as the
exact amounts for such items become available.
M. Performance of Obligations. To the extent that any amount is
credited in favor of Purchaser hereunder, Purchaser shall thereafter make the
payments of taxes, hold and disburse the Custodial Accounts, refund or apply the
Security Deposits, pay the utility bills or Service Contracts, credit the
Employees entitled to Seller's Benefits or otherwise discharge any similar
obligation that Seller may have had to any third party with respect to the item
so credited, but only to the extent of the amount so credited to Purchaser.
7. ACCOUNTS RECEIVABLE.
On and after the Residence Closing Date with respect to each
Construction Residence, Purchaser shall assume responsibility for billing and
collection of all payments on account of services rendered at such Construction
Residence including, without limitation, any payments or reimbursements made or
to be made by any federal, state or local governmental agency or organization
for medical or therapeutical care or other goods or services rendered or
supplied to any Resident, including, without limitation, payments or
reimbursements resulting from third-party payor agreements such as Medicaid,
Medicare, private pay insurance companies or other similar programs (herein
collectively referred to as "Receivables"). In order to facilitate Purchaser's
collection efforts with respect to Receivables accruing prior to the Closing,
Seller agrees to deliver to Purchaser, within a reasonable time after each
Residence Closing, a schedule identifying all of those Receivables with balances
owing for the period prior to such Residence Closing Date and Purchaser agrees
to forward to Seller any payments received which are specifically designated as
being applicable to services rendered prior to such Residence Closing to Seller.
In the event such payments specifically indicate that they relate to services
rendered on or after such Residence Closing Date, such payments shall be
retained by Purchaser. With respect to any payments received by Purchaser during
the first ninety (90) days after the applicable Residence Closing Date that do
not specify whether such payments relate to services rendered prior or
subsequent to such Residence Closing Date, such payments shall be applied first
to any amounts due and owing to Seller and the remaining portion shall be
applied to amounts due to Purchaser; thereafter, such amounts may be applied
first to amounts owing to Purchaser. During such ninety (90) day period,
Purchaser shall use its reasonable efforts in the ordinary course of business to
collect pre-closing Receivables, but shall not be obligated to employ counsel or
any collection agency or to initiate any litigation, ejectment proceedings or
use any extraordinary means of collection, and, subject to the foregoing, shall
have no liability for uncollectible pre-closing Receivables. In the event that
either party shall receive any check for Receivables belonging in part to such
party and in part to the other, such party shall promptly deposit such check and
the part thereof belonging to the other party shall be promptly paid to
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such party. Seller shall at all times be entitled to pursue collection of any
amounts owed to it, and Purchaser shall cooperate with Seller in connection
therewith.
8. CONVEYANCES AND DELIVERIES AT EACH RESIDENCE CLOSING.
A. Deed; Affidavit. At each Residence Closing, Seller shall convey the
Land comprising a part of such Construction Residence, together with any
easements appurtenant thereto and any Improvements thereon, to Purchaser by
Limited Warranty Deed subject only to the Permitted Title Exceptions and using a
legal description based upon the Survey and approved by Title Company. The
Limited Warranty Deed shall be accompanied by a completed and executed transfer
tax or similar instrument in the prescribed form. Seller shall also execute and
deliver an owner's affidavit in the form prescribed by Title Company and
reasonably acceptable to Seller to enable Title Company to endorse over or
delete the exceptions from the Title Policy for mechanics', materialmen's and
other similar liens, rights of parties in possession under unrecorded leases
(other than the applicable Residents), and the other standard exceptions. If
required by Title Company, Seller shall also obtain any lien waivers or lien
releases required by Title Company to so endorse.
B. ▇▇▇▇ of Sale. At each Residence Closing, Seller shall also convey
the Personal Property comprising a part of such Construction Residence to
Purchaser by ▇▇▇▇ of Sale, which ▇▇▇▇ of Sale shall incorporate by reference the
warranties and representations set forth herein with respect to the Personal
Property, subject to the limitations contained herein. Seller shall also deliver
properly endorsed certificates of title to any motor vehicles to be conveyed
pursuant hereto.
C. Assignment of Residency Agreements and Leases. At each Residence
Closing, Seller shall assign to Purchaser Seller's interest in and to the
Residency Agreements and the Leases comprising a part of such Construction
Residence by a duly executed assignment of Residency Agreements and Leases and
Purchaser shall assume Seller's obligations thereunder and first arising on or
after the Residence Closing Date by a duly executed assumption.
D. Assignment of Service Contracts. At each Residence Closing, Seller
shall assign to Purchaser Seller's interest in the Service Contracts and the
Related Interests comprising a part of such Construction Residence by a duly
executed assignment and Purchaser shall assume Seller's obligations thereunder
and first arising on or after the Residence Closing Date by a duly executed
assumption.
E. Notices of Assignment. On or promptly after each Residence Closing
Date (or earlier if Purchaser and Seller shall so agree), Seller and Purchaser
shall send a written notice, in form and content satisfactory to Purchaser and
Seller, to each Resident of such Construction Residence and their respective
legal guardians, next of kin or others designated to be notified in the event of
an emergency or otherwise, and all Tenants under the Leases of such Construction
Residence, informing them of the sale of the applicable Construction Residence
and of the assignment to Purchaser of Seller's interest in the Residency
Agreements and the Leases and directing that all rental payments and other sums
payable on or after such Residence Closing Date shall be paid to Purchaser at
the address set forth in the notice. If Purchaser shall so elect,
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Seller and Purchaser shall also send a written notice, in form and content
acceptable to Purchaser and Seller, to each party to a Service Contract
informing such party of the assignment to Purchaser of Seller's interest in such
Service Contract. Following the filing by Purchaser of an application with the
applicable state agency for a license to operate the Construction Residence,
Seller and Purchaser shall send any other written notice and make any necessary
filing as may be required under applicable law with respect to sale of the
Construction Residence or a transfer of ownership of such Construction
Residence.
F. Books and Records, Floor Plans, Plans and Specifications, Medical
Records, Original Documents and Other Instruments. At or promptly after each
Residence Closing, Seller shall deliver to Purchaser the originals (or, if
originals are unavailable, duplicate originals or copies) of all Files related
to such Construction Residence not previously delivered by Seller pursuant to
the provisions of Section 1 this Agreement, subject to Seller's rights of access
at all reasonable times at Seller's expense to examine and make copies of any
and all of said original Files for a period of three (3) years after such
Residence Closing Date; and Purchaser shall be obligated to retain such Files
for such three (3) year period.
G. Section 1445 Certificate; Form 8594. At each Residence Closing,
Seller shall also execute and deliver to Purchaser a certificate and affidavit
with respect to Section 1445 of the Internal Revenue Code stating that Seller is
not a foreign person as defined in said Section 1445 and applicable regulations
thereunder. At such Residence Closing, Seller and Purchaser shall execute an
agreement to timely file IRS Form 8594 with the Internal Revenue Service
reflecting the agreed upon allocation (if any) of the Residence Purchase Price
as provided in Section 2.B.
H. Termination of Management Agreement and Service Contracts. At each
Residence Closing, Seller shall also deliver to Purchaser an executed original
of an agreement terminating, as of such Residence Closing Date, any and all
management agreements entered into by Seller with respect to the Construction
Residence, and an executed original of an agreement terminating as of such
Residence Closing Date, any Service Contracts that Purchaser is not obligated to
(and does not elect to) maintain in force after such Residence Closing Date. To
the extent assignable and transferable by Seller to Purchaser without the
consent or approval of any other party (or if such consent or approval has been
obtained), at each Residence Closing, Seller shall assign, and Purchaser shall
assume, all Service Contracts relating exclusively to the operation of such
Construction Residence entered into in the ordinary course of business (unless
on terms materially inconsistent with industry standards) and any contract which
may be terminated upon thirty (30) days (or less) notice.
I. Closing Statement. At each Residence Closing, Seller and Purchaser
shall execute and deliver a Closing Statement which shall, among other items,
set forth the applicable Residence Purchase Price, all credits against such
Residence Purchase Price, the amounts of all prorations and other adjustments to
such Residence Purchase Price and all disbursements made at such Residence
Closing and which shall recite that the provisions of this Agreement shall
survive such Residence Closing in the manner expressly set forth herein.
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J. Reaffirmation of Representations and Warranties. Subject to Seller's
right to update information under Section 12C and furnish Schedules after the
date hereof pursuant to Section 21 of this Agreement, at each Residence Closing,
both Seller and Purchaser shall reaffirm in writing that all representations and
warranties (as so updated and qualified) made by each of them, respectively, are
true, correct and complete as of such Residence Closing Date as to all matters
relating to such Construction Residence or such party's good standing,
authorization, lack of bankruptcy or other matters related to such party.
K. Other Conveyances and Instruments. At each Residence Closing, Seller
shall also execute and deliver to Purchaser a conveyance or assignment of any
portion of the Construction Residence sold hereunder for which the conveyance or
assignment is not otherwise provided in this Section 8, and Purchaser shall
assume any other of Seller's obligations which it is required to assume
hereunder, subject to the limitations set forth herein.
9. SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS.
Seller represents, warrants and covenants to and with Purchaser that,
as to each Seller entity, as applicable, and as to each Construction Residence:
A. Title to Personal Property; Condition of Personal Property. The
Seller entity identified on Schedule I for each Construction Residence is the
owner of good, marketable and fee simple title to the Personal Property for such
Construction Residence free and clear of all encumbrances except for liens and
encumbrances which will be paid by Seller at the applicable Residence Closing
(provided, however, no representation or warranty is made hereunder with respect
to title to the Real Property or any portion thereof). There are no material
defects in the order, repair, condition or sufficiency of the Personal Property
on the applicable Residence Closing Date.
B. Residency Agreements and Leases:
(i) Title. The Seller entities to be identified on
Schedule 1-C for each Construction Residence are the lessors or
landlords under the Leases and the Seller entities to be identified on
Schedule 1-B for each Construction Residence are the owners and holders
of the Residency Agreements for such Construction Residences free and
clear of all encumbrances and each is entitled to receive the rents,
issues or profits from the Leases, the Residency Agreements and from
the Construction Residences. Without limiting the foregoing, the Leases
and the Residency Agreements are free and clear of any and all liens,
security interests and encumbrances except such liens, security
interests and encumbrances that secure indebtedness that shall be paid
in full by Seller at each Residence Closing and Seller has made no
assignment of any of the rights of Seller under any of the Leases, the
Residency Agreements or with respect to any of said rents, issues or
profits except as shall be so released at each Residence Closing.
(ii) Validity; No Defaults. The Leases and the Residency
Agreements are valid and enforceable and in full force and effect and
there are no material defaults under or with respect to the Leases or
the Residency Agreements on the part of Seller,
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and to Seller's knowledge there are no material defaults on the part of
any other party to the Leases or the Residency Agreements and no
conditions or facts which, with the passage of time or giving of notice
or both would constitute such a default on the part of Seller or to
Seller's knowledge any such other party to any Lease or Residency
Agreement, other than any past due or delinquent rental payable under
the Leases and the Residency Agreements with respect to any
Construction Residence as will be more particularly set forth on
Schedules 1-B and 1-C to be delivered by Seller to Purchaser pursuant
to Section 21 hereof.
(iii) Rent. Except as will be specifically set forth on
Schedules 1-B and 1-C, no more than one month's rents under the Leases
and the Residency Agreements have been paid in advance, and no rents
reserved in the Leases or the Residency Agreements have been assigned
and no rents for any period subsequent to the date of this Agreement
have been anticipated or collected in advance of the time when the same
becomes due under the terms of the Leases and the Residency Agreements.
With respect to each Construction Residence, the aggregate amount of
all past due Rent under all of the Residency Agreements as of the date
of this Agreement (or most recent date for which such information is
available, as indicated on such Schedule) does not exceed the amounts
set forth in Schedule 9-A.
(iv) Copies; No Other Agreements. All copies of the
Leases, the Residency Agreements, the Rent Roll and the Lease Summary
which have been or will be furnished by Seller to Purchaser are true,
correct and complete copies thereof. None of the Leases or the
Residency Agreements have been modified, amended or extended and there
are no other understandings, concessions, promises or agreements,
written or oral, between the parties thereto.
(v) Rent Roll. The Rent Roll to be set forth on Schedule
1-B and the Summary of Leases to be attached hereto as Schedule 1-C
will be in all material respects accurate, complete and not misleading.
(vi) Scope of Leases. The Leases relate to the use of a
small portion of each Construction Residence and are intended solely to
facilitate the delivery of services for the convenience of Residents,
such as a beauty salon, pharmacy or other similar service and, if such
Leases relate to services being provided by any affiliate of Seller,
Purchaser shall have the right to cause Seller to terminate such Leases
as of the Residence Closing Date for the Construction Residence
affected thereby. No Lease is a ground lease or other lease encumbering
or affecting all or a substantial portion of any Construction
Residence.
C. Title to Improvements; Condition of Improvements. Seller is the
owner of good and marketable fee simple title to the Improvements free and clear
of all encumbrances except for the Permitted Title Exceptions and except for
liens and encumbrances that will be paid by Seller at the Residence Closing
(provided, however, no representation or warranty is made hereunder with respect
to title to the Real Property or any portion thereof). On the applicable
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Residence Closing Date, there will be no material defects known to Seller in the
order, repair or condition of the Improvements.
D. No Other Leases/Occupancies. There are no leases or other agreements
relating to use or occupancy of the Construction Residence, except for the
Residency Agreements and the Leases. No party other than the Residents or
Tenants have any right to occupancy of any portion of the Construction
Residence. No party other than the Residents or Tenants are actually occupying
any portion of the Construction Residence.
E. Other Contracts. As of the applicable Residence Closing Date, there
will be no management, real estate, leasing, rental commission, service,
maintenance, employment, union or other contracts of any kind or description in
existence relating to the applicable Construction Residence, except for the
Permitted Title Exceptions, the Residency Agreements, the Leases, the Service
Contracts to be assumed by Purchaser pursuant to Section 8.I hereof and, with
respect to the Incomplete Residences (as hereinafter defined), the contracts to
be assigned to Purchaser pursuant to Section 22 hereof. Seller will, prior to
the applicable Residence Closing Date, terminate any and all other such
contracts applicable thereto.
F. Service Contracts. The Service Contracts to be assumed by Purchaser
pursuant to Section 8.I hereof are valid and enforceable and in full force and
effect. There are no material defaults under or with respect to the Service
Contracts on the part of Seller, and to Seller's knowledge there are no material
defaults on the part of any other party to any Service Contract and no
conditions or facts which, with the passage of time or the giving of notice, or
both, would constitute such a default on the part of Seller or to Seller's
knowledge any such other party to any Service Contract. All copies of the
Service Contracts which have been or will be furnished by Seller to Purchaser
are true, correct and complete copies thereof (except for immaterial omissions)
and such Service Contracts have not been modified, amended or extended and there
are no other material understandings, concessions, promises or agreements,
written or oral, between the parties thereto.
G. Intentionally Deleted.
H. Accuracy and Completeness of Other Seller Documents and Records.
Seller will provide Purchaser with access to the Files after the date of this
Agreement.
I. Litigation and Other Proceedings. Except as set forth on Schedule
9-B to be delivered by Seller to Purchaser pursuant to the provisions of Section
21 hereof, there are no judgments, consent decrees, injunctions, litigation,
claims or proceedings (i) relating solely to Seller and not to any of the
Construction Residences and (ii) which, if adversely determined with respect to
Seller, would have a material adverse effect on HCR Manor Care's ability to
perform its obligations hereunder. In addition and not in limitation of the
foregoing, except as set forth on Schedule 9-B to be delivered by Seller to
Purchaser pursuant to the provisions of Section 21 hereof, there are no
judgments unsatisfied against Seller or any Construction Residence or consent
decrees or injunctions to which Seller or any Construction Residence is subject,
and there is no litigation, claim or proceeding pending or to Seller's knowledge
threatened against or relating to Seller or Seller's ownership, operation of or
title to any Construction Residence, nor
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does Seller know of any governmental investigation relative to Seller or any
Construction Residence except as set forth on Schedule 9-B to be delivered by
Seller to Purchaser pursuant to the provisions of Section 21 hereof. Seller is
not in the hands of a receiver nor has Seller committed an act of bankruptcy nor
has an order for relief been entered with respect to Seller.
J. Compliance of Property With Zoning and Other Laws. Seller has not
received any notification from any governmental or public authority that any
Construction Residence currently violates any existing fire, health, building,
handicapped persons, environmental, sanitation, use and occupancy or zoning laws
or that any work is required to be done upon or in connection with any
Construction Residence or that any modifications or alterations now or in the
future will need to be made to obtain the licensure category of any Construction
Residence as set forth on Schedule I (except for work necessary to complete such
Construction Residence). Except as disclosed on Schedule 9-C to be delivered by
Seller to Purchaser pursuant to the provisions of Section 21 hereof, no notice
or warning from any governmental authority with respect to any failure or
alleged failure of Seller to comply with any law, regulation or order has been
received by Seller.
K. Environmental Matters. Except with respect to use, storage and
disposal in the ordinary course of business that complied in all material
respects with all applicable Environmental Laws, Seller has not used, nor
authorized, nor knowingly allowed the use of any Construction Residence, and to
Seller's knowledge no Construction Residence has been used, for the generating,
handling, treatment, storage, disposal or release of any hazardous substance,
hazardous waste, petroleum or petroleum products, asbestos, lead-based paint,
contaminant, pollutant or other words of similar import (hereinafter
collectively referred to as "Hazardous Substances") referred to or defined as
such under any applicable local, state or federal law or regulation regulating
the discharge of solid, liquid or gaseous waste into the environment or the
placement of structures or materials into any waters (surface or subsurface) or
otherwise regulating or appertaining to matters affecting the environment
(hereinafter collectively referred to as "Environmental Laws"). Seller has not
used, nor authorized, nor knowingly allowed the use of any Construction
Residence, and to Seller's knowledge no Construction Residence has been used, in
any manner other than in full compliance with all Environmental Laws.
In furtherance of and not in limitation of the foregoing:
(i) Seller has received no notice and there are no
claims, actions, suits, proceedings or investigations known to Seller,
pending or threatened, related to Hazardous Substances with respect to
the ownership, use, condition, or operation of any of the Construction
Residences, in any court or before or by any federal, state or other
governmental or quasi-governmental agency or authority or private
arbitration tribunal (hereinafter collectively referred to as
"Environmental Litigation").
(ii) To Seller's knowledge, Seller has complied with all
applicable reporting requirements under all Environmental Laws
concerning the disposal or release of Hazardous Substances at or from
all Construction Residences, and Seller has made no such reports.
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L. No Options or Other Interests. No Resident, Tenant or any other
person or entity has any deed, option or other evidence of any right or interest
in or to any Construction Residence except for each Tenant's and each Resident's
rights to possession as set forth in and as evidenced by such Tenant's Lease or
such Resident's Residency Agreement.
M. Assessments, Fees and Liens. No assessments for public improvements
have been made against any Construction Residence which are due and payable and
which will remain unpaid at the Residence Closing. As of each Residence Closing
Date there will be no outstanding bills, invoices, charges, fees or expenses
owing, accrued or incurred with respect to the applicable Construction Residence
or by or on behalf of Seller which have not been paid in full on or prior to the
Residence Closing Date, except such items (i) as shall be incurred in the
ordinary course of business, (ii) for which Seller shall be obligated to pay all
amounts owed following the Residence Closing Date and (iii) which are not
Monetary Encumbrances. At the Residence Closing there will be no Monetary
Encumbrances and no mechanics', materialmen's or laborers' liens against the
applicable Construction Residence (either filed or inchoate), no claims for
labor, services, profit or material furnished for constructing, repairing or
improving such Construction Residence which remain unpaid, and no other chattel
liens, conditional sales contracts or security interests against such
Construction Residence, other than those items as shall be paid by Seller and
released at such Residence Closing.
N. Pending Assessments and Condemnation Proceedings. Seller has
received no notice of, and there is no pending or threatened special assessment
or condemnation or eminent domain proceedings which would affect any
Construction Residence, or any part thereof or access thereto.
O. Disclosure. No statement, warranty or representation by Seller
contains an untrue statement of material fact or omits to state a material fact
necessary in order to make the statements made in light of the circumstances
under which such statements are made not misleading.
P. Authority. Each Seller entity is duly formed, validly existing and
in good standing under the laws of the state of its incorporation or
organization, and each has all necessary power to execute and deliver this
Agreement and perform all its obligations hereunder. Each Seller entity has the
full power and authority to enter into and perform this Agreement and the
execution, delivery and performance of this Agreement by such Seller entity (i)
has been duly and validly authorized by all necessary action on the part of such
Seller entity, (ii) does not conflict with or result in a violation of such
Seller entity's articles of incorporation, bylaws, partnership agreement,
operating agreement or other governing instruments, or any judgment, order or
decree of any court or arbiter in any proceeding to which such Seller entity is
a party, and (iii) does not conflict with or constitute a material breach of, or
constitute a material default under, any contract, agreement or other instrument
by which such Seller entity is bound or to which it is a party. This Agreement
is the valid and legally binding obligation of each Seller entity enforceable in
accordance with its terms.
Q. Licensure and Regulatory Matters. Except with respect to Incomplete
Residences sold pursuant to Section 22.B, on the applicable Residence Closing
Date, each Construction
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Residence will be in such physical condition as to enable such Construction
Residence to be licensed by all appropriate federal, state and local
governmental agencies to operate and perform the services rendered therein as an
assisted living or dementia care residence offering the service levels and with
the number of units set forth on Schedule I hereof. As of the date of this
Agreement and on the applicable Residence Closing Date, all licenses, approvals,
accreditations or certificates necessary to enable Seller to complete
construction of the Construction Residence, including, without limitation, the
Permits, are or will be in full force and effect and in good standing and there
is no action pending, or to Seller's knowledge threatened or recommended by the
appropriate state, federal or local agency having jurisdiction to revoke,
withdraw or suspend any license, approval, accreditation or certificate nor has
Seller received any warning or notice of any violation of any applicable law
with respect to the construction of the Construction Residence. Seller has
delivered or will within thirty (30) days after the date of this Agreement
deliver to Purchaser true, correct and complete copies of the Permits relating
to construction the Construction Residence (including without limitation the
grading and building permits).
R. Reports. Seller to Seller's knowledge has filed all material
reports, disclosures and other information as is required under the laws or
regulations of any federal, state or local governmental organization or agency.
S. Employees; Unions. Schedule 9-D, which Seller shall provide to
Purchaser in accordance with the provisions of Section 21 hereof, is a true,
correct and complete list of the payroll report for all Employees employed at
each Construction Residence, which payroll report identifies each Employee,
their hire date, such Employee's rate of pay and any bonuses or other incentives
promised or contemplated with respect to such Employee. Except to the extent set
forth in such reports, there are no other employees or others entitled to
compensation or a salary at the Construction Residence. Seller is not a party to
any collective bargaining agreements, contracts of employment, profit sharing,
bonus, deferred compensation, stock option, severance pay or pension or
retirement plans with respect to any of its Employees at the Construction
Residence and is not a party to or aware of any labor dispute or grievance with
respect to the Property except as shall be summarized on Schedule 9-D. None of
the Employees at the Construction Residences is employed pursuant to a written
employment agreement.
From and after the date of this Agreement, Seller will not take any
action, or fail to take any action or consent to or affirmatively permit any
third party to take or fail to take any action, which would reasonably be
expected to result in an inaccuracy or a breach of any warranty, representation
or covenant contained in this Section 9 or which would impair or impede Seller's
ability to reaffirm such representations, warranties and covenants as true,
correct and complete as of the Residence Closing Date.
10. PURCHASER'S REPRESENTATIONS AND WARRANTIES.
Purchaser, as of the date of the execution of this Agreement by
Purchaser, represents and warrants to Seller as follows:
A. Organization, Power and Authority. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and has all
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necessary power to execute and deliver this Agreement and perform all its
obligations hereunder. Purchaser has the full power and authority to enter into
and perform this Agreement and the execution, delivery and performance of this
Agreement by Purchaser (i) has been duly and validly authorized by all necessary
action on the part of Purchaser, (ii) does not conflict with or result in a
violation of Purchaser's Restated Articles of Incorporation or Restated Bylaws,
each as amended, or any judgment, order or decree of any court or arbiter in any
proceeding to which Purchaser is a party, and (iii) does not conflict with or
constitute a material breach of, or constitute a material default under, any
contract, agreement or other instrument by which Purchaser is bound or to which
it is a party. This Agreement is the valid and legally binding obligation of
Purchaser enforceable in accordance with its terms.
B. No Bankruptcy. Purchaser is not in the hands of a receiver nor has
it committed an act of bankruptcy nor has an order for relief been entered with
respect to Purchaser.
11. PRE-CLOSING COVENANTS.
Purchaser and Seller covenant and agree that between the date hereof
and the last to occur of the Residence Closing Dates:
A. Inspection of Property. Seller shall allow Purchaser and its agents
to inspect all Construction Residences and the construction progress thereof and
any part thereof and all books, records and accounts located at the Construction
Residences, or relating solely to the Construction Residences and located
elsewhere or any of Seller's operations thereon, at such times and from time to
time as Purchaser may reasonably request and as shall be reasonably acceptable
to Seller. Seller shall provide Purchaser with periodic reports as to the status
of the construction of the Construction Residence and any anticipated delays.
B. Compliance with Laws, Leases, Contracts. Seller shall comply in all
material respects with all laws, ordinances, regulations and orders relating to
the construction and ownership all Construction Residences and the Permits and
with all the terms, conditions and provisions of the Residency Agreements and
the Leases, and with the requirements of all liens and encumbrances, agreements
and other contractual arrangements to which any Construction Residence or Seller
is subject and make all payments required to be paid thereunder.
C. Standard of Construction. Seller shall comply with the requirements
of Sections 22 and 23 with respect to the construction of the Construction
Residences.
D. New Leases and Modifications to Existing Leases; Residency
Agreements. After the date of this Agreement (and except as may be reflected on
the applicable Rent Roll), Seller shall not enter into any new Leases except in
the ordinary course of business and that otherwise will not prevent Seller from
giving the representation and warranty set forth in Section 9.B.(vi) or cancel,
modify, extend or renew any existing Lease, nor waive any default under or
accept any surrender of any Lease, nor accept any prepayment of rent thereunder
without in each case the prior written consent of Purchaser, which consent will
not be unreasonably withheld or delayed. Seller may enter into new Residency
Agreements in the ordinary course of business and may extend or renew any
existing Residency Agreement provided same are on economic terms
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acceptable to Purchaser. Seller shall update the applicable Rent Roll
immediately prior to each Residence Closing and shall certify same as true,
correct and complete as of the applicable Residence Closing Date.
E. New Service Contracts and Modifications to Existing Service
Contracts. After the date of this Agreement, and except in the ordinary course
of business consistent with Seller's prior conduct of business at residences
comparable to the Construction Residences, Seller shall not enter into any new
Service Contracts which cannot be terminated, without penalty, prior to the
applicable Residence Closing Date, and Seller shall promptly notify Purchaser if
any Service Contracts are entered into and shall provide copies of same with
such notification. In addition, and except in the ordinary course of business
consistent with Seller's prior conduct of business at residences comparable to
the Construction Residences, Seller shall not cancel, modify, extend or renew
any Service Contract, nor waive any default under or accept any surrender of any
Service Contract, without in each case the prior written consent of Purchaser,
which consent will not be unreasonably withheld or delayed. Seller shall update
the List and Summary of Service Contracts attached hereto as Schedule 1-F prior
to the applicable Residence Closing and shall certify same as true, correct and
complete at such Residence Closing.
F. Notice of Revision of Representations Due to Discovery of New Facts.
Seller shall notify Purchaser as promptly as is reasonably practicable but in
any event prior to the Residence Closing Date if Seller becomes aware of any
fact, transaction, event or occurrence which could make any of the warranties,
representations and covenants of Seller under this Agreement not true with the
same force and effect as if made on or as of the date hereof.
G. Personal Property Inventory. Seller shall not remove any of the
Personal Property from any Construction Residence nor use any of the Personal
Property except such use thereof as is normal and customary in the operation and
maintenance of the Property. Seller covenants that, except with respect to
Incomplete Residences on the applicable Residence Closing Date all Personal
Property shall be present at the Construction Facility consistent with past
practices of Seller with respect to comparable facilities, ready to open for
operations and at customary levels of reserves and all Personal Property will be
available and conveyed to Purchaser on the applicable Residence Closing Date.
Seller shall update the Personal Property Inventory attached hereto as Schedule
1-E(ii) immediately prior to the Residence Closing and shall certify same as
true, correct and complete at such Residence Closing.
H. Transfer of Permits. Purchaser shall be responsible for preparation
of all applications and notices and payment of all fees to enable all Permits to
be transferred to or issued in the name of Purchaser and, in connection
therewith Seller shall execute all applications and instruments reasonably
required in connection with the transfer of all Permits, to the extent
transferable, in order to transfer the benefits of each such Permit to Purchaser
and, if requested by Purchaser, Seller shall otherwise cooperate with
Purchaser's efforts to have all permits, licenses and certificates of occupancy
or equivalent governmental instruments required for the operation of the
Construction Residence issued to and in the name of Purchaser on or prior to the
applicable Residence Closing Date, at no cost to Seller. Seller shall use its
best efforts to preserve in force all existing Permits and to renew all those
expiring prior to the applicable Residence Closing Date on terms acceptable to
Purchaser. If any such Permit shall be suspended
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or revoked, Seller shall promptly notify Purchaser and shall diligently take all
measures reasonably necessary to cause the reinstatement of such Permit without
any additional limitation or condition and shall cause such Permit to be
reinstated. Seller shall not seek or allow any amendment to any Permit which
would alter the existing uses of the Construction Residence or any part thereof.
Purchaser shall be responsible for obtaining licensure of the Construction
Residences to operate as the respective types of facilities set forth on
Schedule 1, provided that this sentence shall not be deemed to limit Seller's
obligations with respect to the physical plant as set forth in Section 22.
I. Compliance of Improvements and Real Property. Seller shall cooperate
with Purchaser (at no cost to Seller) in Purchaser's efforts to obtain
satisfactory evidence that each of the Construction Residences and the use and
operation thereof meet and comply with all deed restrictions, restrictive
covenants, building, zoning and environmental laws and any other covenants,
restrictions or regulations, if any, affecting the Real Property (collectively,
the "Land Use Requirements"). Such evidence shall include but shall not be
limited to obtaining copies of certificates of completion or occupancy and
letters or other evidence from the agencies administering compliance with Land
Use Requirements indicating that all of the Improvements, as constructed and
operated, fully comply with said requirements. In addition, said items shall be
directed to Purchaser specifically with knowledge on the part of the party
issuing same that Purchaser will be relying upon the same and said items shall
be submitted to Purchaser as soon as it is reasonably possible to do so.
J. Existing Employees. Seller's and Purchaser's obligations with
respect to persons engaged to perform pre-opening activities will be governed by
Section 23 hereof. The parties hereto hereby agree that the provisions of this
Section 11(J) and Section 23 are for the sole and exclusive benefit of the
parties hereof, and, accordingly, no third party (including Employees) shall be
entitled to rely upon or enforce any of the agreements set forth herein.
K. Notices and Consents. Each of Purchaser and Seller will (and will
cause any of its affiliates to) give any notices to, make any filings with, and
use commercially reasonable efforts to obtain any authorizations, consents and
approvals of governments and governmental agencies required in connection with
consummating the sale of the Construction Residences pursuant hereto; provided,
that with respect to Permits, Section 11.H shall govern. Without limiting the
generality of the foregoing, each of the parties hereto will file any
Notification and Report Forms and related material that it may be required to
file with the Federal Trade Commission and the Antitrust Division of the United
States Department of Justice under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended (the "HSR Act"), will use commercially reasonable
efforts to obtain an early termination of any applicable waiting period and will
make any further filings pursuant thereto that may be necessary or advisable in
connection therewith.
12. PURCHASER'S INSPECTION OF PROPERTY.
A. Access. Purchaser shall, at all reasonable times as reasonably
scheduled with Seller prior to the applicable Residence Closing Date, have the
privilege of visiting and inspecting each Construction Residence with its
agents, representatives and contractually
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retained independent contractors as needed to inspect, examine, test, appraise
and survey such Construction Residence, including, but not limited to,
investigations of the zoning status and physical status thereof and verification
of all information made or to be made available to Purchaser with respect to
such Construction Residence. In addition, Purchaser shall have the right to
obtain such letters, certificates or statements from appropriate governmental
officials or other experts concerning zoning and other matters related to the
Construction Residences. This privilege shall include the right to make surveys,
examinations, appraisals and other tests to obtain any relevant information
necessary to determine subsurface and topographic conditions, including, but not
limited to, Hazardous Substances studies, soil tests, asbestos analysis and
structural review, all of which tests, studies and reviews shall be performed at
Purchaser's sole cost and expense and which shall not materially interfere with
the operation of the Construction Residences by Seller. In addition, Purchaser
shall have the right to inspect all other matters required to be delivered by
Seller to Purchaser hereunder. In consideration of Purchaser's right to inspect
the Construction Residences as described in this Section 12.A, Purchaser shall,
and does hereby agree to, indemnify, defend and hold Seller and Seller's
employees, agents and residents harmless from any losses, costs or expenses
arising out of the exercise of such privileges by Purchaser (including any
rights or claims of materialmen or mechanics to liens on the Construction
Residences, but excepting acts resulting from the negligence or willful conduct
of Seller or Seller's agents, principals, employees, representatives, affiliates
or others whose presence is suffered or permitted by Seller), which indemnity,
defense and hold harmless agreement shall survive any termination of this
Agreement. Purchaser shall repair any damage to the Construction Residences
resulting from Purchaser's inspection of the Construction Residences and shall
maintain (or cause its contractors to maintain) adequate liability insurance and
shall provide evidence of same to Seller.
B. Termination Election. In the event that any of Purchaser's
inspections, examinations, tests or surveys of any Construction Residence reveal
any condition or fact (or raises substantial uncertainty with respect to the
existence of any such condition or fact) with respect to (i) compliance of the
Construction Residence with all Land Use Requirements materially necessary for
the current and future operation of the Construction Residence or which will
substantially impede future financing of any Construction Residence or (ii) a
Recognized Environmental Condition (as hereinafter defined), then provided that
Purchaser shall give notice thereof (together with a copy of any report or
reports related thereto) within forty-five (45) days after the date of this
Agreement (the "Review Period"), Purchaser may, in its sole and absolute
discretion, have the right to elect to terminate this Agreement with respect to
such Construction Residence, whereupon the provisions of Section 14 hereof shall
be applicable with respect to such Construction Residence. Failure of Purchaser
to give notice of a termination election pursuant to this Section 12.B prior to
the expiration of the Review Period shall constitute a waiver of Purchaser's
right to terminate this Agreement pursuant to this Section 12.B unless Purchaser
has conducted customary inspections and examinations during such Review Period
which did not reveal such condition or fact, and Purchaser first becomes aware
of any such condition or fact after expiration of such Review Period. As used
herein, a "Recognized Environmental Condition" is defined as the presence or
likely presence of any Hazardous Substances on, in, under or adjacent to an
Construction Residence under conditions that indicate an existing release, a
past release or a material threat of a release of any Hazardous Substance on the
Construction Property or into the ground, groundwater or surface water of the
Construction
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Property or properties adjacent thereto. The term includes Hazardous Substances
even under conditions in compliance with Environmental Laws. The term is not
intended to include de minimus conditions that do not present a material risk of
harm to public health or the environment and that generally would not be the
subject of an enforcement action if brought to the attention of appropriate
governmental agencies.
C. Right to Update Information, including Representations and
Warranties. Seller shall have the right at any time during the term of this
Agreement to update any information previously provided by Seller to Purchaser,
including without limitation the Schedules to this Agreement and any information
necessary to qualify any representation or warranty set forth in Section 9
(through the addition of new Schedules) which Seller determines is incorrect
other than as a result of Seller's breach of its obligations hereunder (in which
event Section 18.B shall apply). If Seller provides Purchaser with an updated
Schedule or other updated information at any time on or before the applicable
Residence Closing and such update is not a result of Seller's breach hereunder,
then Purchaser shall have ten (10) days in which to elect to terminate this
Agreement with respect to the applicable Construction Residence by delivering
notice to Seller within ten (10) days after receipt by Purchaser of such update,
whereupon the provisions of Section 14 shall be operative with respect to such
Construction Residence; provided, however, that Schedules originally delivered
pursuant to Section 21 hereof shall not be deemed "updated schedules" with
respect to this sentence. Failure of Purchaser to elect to terminate this
Agreement with respect to an Construction Residence by timely notice to Seller
shall be deemed a waiver of Purchaser's right to elect to terminate as a result
of such update but shall not limit or impair Purchaser's right to thereafter
elect to terminate in the event of any subsequent update. The applicable
Residence Closing Date shall be extended, if necessary, to permit ten (10) days
for Purchaser to make Purchaser's election as set forth above.
13. CONDITIONS TO EACH RESIDENCE CLOSING.
A. Conditions to Each Parties' Obligation to Close. The respective
obligations of each party hereto to affect any Residence Closing shall be
subject to the fulfillment at or prior to the applicable Residence Closing Date
of the following conditions, any or all of which may be waived, in whole or in
part, to the extent permitted by applicable law:
(i) HSR Act. The applicable waiting period under the HSR Act
shall have expired or been terminated without action by the Justice
Department or the Federal Trade Commission to prevent consummation of
any of the transactions contemplated hereby and without the impositions
of any conditions.
(ii) Licensing Arrangement. Prior to or simultaneously with
the first Residence Closing, HCR Manor Care, Purchaser and their
respective affiliates intended to be parties thereto shall have entered
into definitive license agreements with respect the licensing
arrangement contemplated by that certain Letter of Intent related
thereto dated as of the date of this Agreement by and between Seller
and Purchaser.
B. Conditions to Purchaser's Obligation to Close. The obligation of
Purchaser to purchase each Construction Residence hereunder is subject to the
following additional
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conditions, any or all of which may be waived by Purchaser to the extent
permitted by applicable law:
(i) Accuracy of Representations (and the facts recited
therein); No Default by Seller. All the warranties, representations and
covenants of Seller contained in this Agreement with respect to such
Construction Residence or the Seller entities owning such Construction
Residence (as qualified by any Schedules delivered pursuant to Sections
12.C or 21) shall be true in all respects on the applicable Residence
Closing Date with the same effect as if they had been made on such
Residence Closing Date and shall be reaffirmed by Seller in writing at
the Residence Closing, and Seller shall have performed all covenants
and obligations to have been performed and satisfied by Seller with
respect to such Construction Residence prior to the Residence Closing
Date; provided, however, that with respect to any breach of a
representation, warranty or covenant by Seller with respect an
Construction Residence or the Seller entities which own such
Construction Residence which do not (i) interfere with or impair such
Seller entities' right and ability to fully perform its obligations
hereunder with respect to such Construction Residence or (ii)
materially and adversely affect the fair market value of such
Construction Residence (any such breach referred to herein as a "Minor
Breach"), Purchaser's sole remedy shall be an action for damages
pursuant to Section 18 hereof and the existence of any such Minor
Breach shall not excuse Purchaser's obligation to purchase such
Construction Residence hereunder.
(ii) Completed Construction. Such Construction Residence shall
comply with the definition of a Completed Residence (as defined in
Section 22), except in the case of up to three (3) Incomplete
Residences.
(iii) Termination Election. Purchaser shall not have given
notice to Seller of it election to terminate this Agreement with
respect to such Construction Residence pursuant to Sections 5.A.,
12.B., 12.C., 16.A, 16.B, Seller shall not have given notice to
Purchaser pursuant to Section 14.C and neither party shall have given
notice of termination pursuant to Sections 18, 20, 21, 22, 23 or 24
hereof.
14. SELLER'S OPTIONS UPON FAILURE OF PURCHASER CLOSING CONDITION.
In the event that any condition to Purchaser's obligation to purchase
any Construction Residence to Section 13.B. hereunder shall not have been
satisfied or waived by Purchaser as of the applicable Residence Closing Date
(such condition, a "Failed Condition"), Seller may, by written notice given to
Purchaser prior to or within three (3) business days following the date that
such Residence Closing would have occurred, elect one of the following
alternatives:
A. Deferral of Residence Closing Date. Seller may defer the Residence
Closing Date with respect to such Construction Residence for a period of up to
30 days after the original Residence Closing Date in order to seek to satisfy
any such Failed Condition.
B. Indemnification and Cure. Seller may agree to indemnify Purchaser
with respect to all liability or exposure arising as a result of such Failed
Condition pursuant to an
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indemnification agreement in form and substance satisfactory to Purchaser, such
approval not to be unreasonably withheld, whereupon Purchaser shall be obligated
to proceed with the purchase of such Construction Residence provided that
pursuant to such indemnification agreement Seller agrees to repurchase the
Construction Residence from Purchaser for a purchase price equal to the purchase
price paid by Purchaser to Seller hereunder, together with interest thereon at
the per annum rate of 9% from the date of such Residence Closing to the date of
such repurchase, in the event that the Failed Condition shall not have been
cured or satisfied by Seller within 90 days of the original Residence Closing
Date.
C. Withdrawal of Residence. With respect to no more than three (3) of
the Construction Residences in the aggregate, Seller may elect to withdraw and
remove such Construction Residence from the terms of this Agreement whereupon
Purchaser shall have no further obligation hereunder to purchase such
Construction Residence.
D. Withdrawal and Substitution. Seller shall be entitled to withdraw
such Construction Residences from the terms of this Agreement provided that
Seller offers to Purchaser in replacement thereof one (1) or more assisted
living or dementia care residences owned by Seller having a comparable economic
value. If Purchaser is willing to agree to such substitution and Purchaser and
Seller agree upon an appropriate purchase price for such substituted residences,
the parties shall execute an amendment to this Agreement adding such substituted
residence as an a Construction Residence at the agreed upon price.
15. NOTICES.
All notices, consents, approvals and other communications which may be
or are required to be given by either Seller or Purchaser under this Agreement
shall be properly given if made in writing and sent by (a) hand delivery, or (b)
certified mail, return receipt requested, or (c) nationally recognized overnight
delivery service for next business day delivery (such as Express Mail, Federal
Express or Airborne Express), or (d) facsimile or telecopier, provided a
confirming copy thereof is thereafter also sent via the methods described in
(a)-(c), above, with all postage and delivery charges paid by the sender and
addressed to Purchaser or Seller, as applicable, as follows. Such notices
delivered (a) by hand shall be deemed received upon actual delivery, (b) by
overnight delivery service shall be deemed received on the business day
following the date of deposit with such overnight service, (c) by mail shall be
deemed received upon the earlier of actual receipt or two (2) business days
after mailing, and (d) by facsimile or telecopier shall be deemed received upon
the date the sender receives verbal or electronic confirmation of such
transmission, without regard to when the confirming copy is sent or delivered.
Said notice addresses are as follows:
IF TO SELLER:
HCR Manor Care, Inc.
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
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Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇▇ ▇ ▇▇., ▇.▇.
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
IF TO PURCHASER:
Alternative Living Services, Inc.
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
2700 International Tower
Peachtree Center
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇, Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Either party may change its address for notices hereunder upon not less than
five (5) days notice to the other, and either party's counsel may give notice on
behalf of their respective clients. Inability to give notices due to incorrect
address or due to failure of a party to give notice of a change of address,
refusal to accept notices, and inability to transmit notices due to mechanical
or other difficulties on the recipient's end (including without limitation a
malfunctioning facsimile machine) shall be deemed to be effective notice
hereunder.
16. CASUALTY AND CONDEMNATION.
A. Casualty. In the event that prior to the applicable Residence
Closing Date any of the Improvements of the applicable Construction Residence
are damaged or destroyed by fire or other casualty to any extent (other than
such minor damage as may be fully repaired by Seller prior to the Residence
Closing Date), then Seller shall give Purchaser immediate notice thereof and
Purchaser shall have the right to elect not to purchase such Construction
Residence so
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damaged or destroyed (a "Section 16.A. Election") by written notice
to Seller within ten (10) days after Purchaser receives notice of such fire or
other casualty, and thereafter neither party hereto shall have any further
rights, obligations or liabilities hereunder with respect to such Construction
Residence except to the extent that any right, obligation or liability set forth
herein expressly survives termination of this Agreement. In the event that
Purchaser does not make a Section 16.A. Election with respect to an Construction
Residence, Purchaser shall be obligated to close the purchase and sale
contemplated by this Agreement as scheduled without adjustment of the applicable
Residence Purchase Price and Seller shall assign to Purchaser at such Residence
Closing all insurance proceeds payable under Seller's insurance policies on
account of such damage or destruction or pay to Purchaser all such insurance
proceeds previously paid, and pay to Purchaser at such Residence Closing an
amount equal to the amount which the insurer is entitled pursuant to the terms
of the applicable insurance policy to deduct from the proceeds otherwise payable
to Seller on account of such casualty loss, and Seller shall not be obligated to
repair or restore the Property. The applicable Residence Closing Date shall be
extended, if necessary, to permit ten (10) days for Purchaser to make
Purchaser's election as set forth above.
B. Condemnation. In the event that prior to any Residence Closing Date
there shall be instituted against any portion of the applicable Construction
Residence any proceeding in condemnation, eminent domain or any written request
for a conveyance in lieu thereof, or limiting or restricting access thereto or
should Seller receive notice that such proceedings are threatened or have been
commenced against such Construction Residence (hereinafter collectively referred
to as "Condemnation Proceedings"), then Seller shall give Purchaser immediate
notice thereof and Purchaser shall have the right to elect not to purchase such
Construction Residence (a "Section 16.B. Election") by written notice to Seller
within ten (10) days after Purchaser receives notice of such Condemnation
Proceedings, and thereafter neither party hereto shall have any further rights,
obligations or liabilities hereunder with respect to such Construction Residence
except to the extent that any right, obligation or liability set forth herein
expressly survives termination of this Agreement. In the event that Purchaser
shall not make a Section 16.B. Election with respect to an Construction
Residence, Purchaser shall be obligated to close the purchase and sale
contemplated hereby less the portion of such Construction Residence so taken or
subject to said Condemnation Proceedings without adjustment of the applicable
Residence Purchase Price and Seller shall assign or pay to Purchaser at the
applicable Residence Closing all of Seller's right, title and interest in any
award payable on account of such Condemnation Proceedings or pay to Purchaser
all such awards previously paid and Seller shall have no obligation to repair or
restore such Construction Residence not so taken by said Condemnation
Proceedings. The Closing Date shall be extended, if necessary, to permit ten
(10) days for Purchaser to make Purchaser's election as set forth above.
17. BROKERS.
Except with respect to any fees payable by Seller to ▇▇▇▇▇▇▇ ▇▇▇▇▇ or
any fees payable by Purchaser to Schroeders, each party hereto represents and
warrants to the other that it has not employed any broker, finder or other
person or entity who might, by reason thereof, have any claim for payment of any
brokerage commission, finder's fee or other similar compensation from any other
party hereto. Seller and Purchaser further represent and warrant that they each
shall be responsible for payment of any broker or finder employed (expressly or
impliedly) by them,
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respectively. Seller and Purchaser shall and do hereby indemnify and defend the
other against and hold the other harmless of and from all claims, demands and
liabilities for any breach of the foregoing representations and warranties,
including without limitation, for any commission, fee or other compensation
payable to or claimed by any broker or finder employed (express or implied) by
it or with whom it made an agreement (express or implied) to pay a broker's
commission, a finder's fee or other compensation.
18. DEFAULT.
A. In the event that Purchaser defaults in the observance or
performance of its covenants and obligations hereunder after written notice by
Seller to Purchaser of such default and Purchaser's failure to cure such default
within ten (10) days after receipt of such notice, Seller shall be entitled to
terminate this Agreement by written notice to Purchaser of such termination and
shall also be entitled, as its sole and exclusive remedy hereunder to payment by
Purchaser to Seller of the Applicable Liquidated Damage Amount as defined and
set forth on Schedule 18 hereof as full liquidated damages for such default of
Purchaser. The parties hereby acknowledge the difficulty of ascertaining the
actual damages in the event of such a default, that it is impossible more
precisely to estimate the damages to be suffered by Seller upon Purchaser's
default and that the aforesaid payments are intended not as a penalty, but as
full liquidated damages and that such amounts constitutes a good faith estimate
of the potential damages arising therefrom. Seller's right to so terminate this
Agreement and to retain the aforesaid payment as full liquidated damages is
Seller's sole and exclusive remedy in the event of default hereunder by
Purchaser, and Seller hereby waives, relinquishes, releases and covenants not to
pursue any and all other rights and remedies, including, but not limited to (i)
any right to ▇▇▇ Purchaser for specific performance of this Agreement, (ii) any
right to ▇▇▇ Purchaser for damages or to prove that Seller's actual damages
exceed the amounts agreed upon herein as full liquidated damages, and (iii) any
other right or remedy which Seller may otherwise have against Purchaser, either
hereunder, at law, in equity or otherwise.
B. In the event that Seller defaults in the observance or performance
of its covenants and obligations hereunder after written notice by Purchaser to
Seller of such default and Seller's failure to cure such default within ten (10)
days after receipt of such notice, Purchaser shall be entitled: (i) in the case
of any default other than a Minor Breach, to pursue any or all rights or
remedies as may be provided hereunder and at law, in equity or otherwise,
including, without limitation, the right to terminate this Agreement as to any
Construction Residence which is affected by such default (subject to the
provisions of Section 14 hereof) or (ii) in the case of any Minor Breach, to
pursue an action for damages resulting from such Minor Breach, including without
limitation an action to recover all costs and expenses incurred by Purchaser in
pursuing such damages, including attorneys' fees and expenses. Notwithstanding
the foregoing in no event shall Purchaser be entitled to bring an action for any
Minor Breach or Minor Breaches except to the extent that the aggregate amount
that Purchaser, but for this sentence, would be entitled to recover on account
of such Minor Breach and any Minor Breaches under the Operating Purchase
Agreement in the aggregate exceeds $4,000,000.00 and in no event shall Seller's
aggregate liability for Minor Breaches under this Agreement and the Operating
Purchase Agreement exceed $25,000,000.00.
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19. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION.
A. Survival of Representations and Warranties. All representations and
warranties contained in this Agreement and in any certificate delivered at any
Residence Closing shall be deemed to have been relied upon notwithstanding any
investigation heretofore or hereafter made or omitted by any party hereto and
shall survive each Residence Closing for a period of two (2) years after the
date of the final Residence Closing hereunder.
B. Seller's Indemnification Obligations. Subject to the terms and
conditions of this Section 19, Seller agrees to indemnify and hold Purchaser
harmless against any and all losses, costs and expenses (including, without
limitation, legal and other expenses) resulting from or relating to:
(i) any debt, liability or obligation of Seller other than any
liabilities of Seller expressly assumed by Purchaser in accordance
herewith, and any claim or demand of any third party with respect to
any act or occurrence at, or the operation of, any Construction
Residence prior to such Construction Residence's Residence Closing Date
(provided, that the foregoing shall not be deemed to make Seller liable
for any loss, cost or expense resulting from the physical condition of
a Construction Residence as of a Residence Closing Date); and
(ii) any failure of Seller to comply with the Bulk Sales Law
of the states in which any of the Construction Residences are located;
any and all actions, suits, demands, assessments or judgments with respect to
any claim arising out of or relating to the subject matter of the
indemnification. Notwithstanding the focusing, nothing in this Section 19-B
shall be deemed to require Seller to indemnify Purchaser for any claim, demand,
action, suit, assessment or judgment against Purchaser solely for contribution
(or similar action) because Purchaser appears in the chain of title.
C. Purchaser's Indemnification Obligations. Subject to the terms and
conditions of this Section 19, Purchaser agrees to indemnify and hold Seller
harmless against any and all losses, costs and expenses (including, without
limitation, legal and other expenses), resulting from or relating to:
(i) any claim or demand of any third party with respect
to any act or occurrence at, or the operation of, any
Construction Residence on or after such Construction
Residence's Residence Closing Date; and
any and all actions, suits, demands, assessments or judgments with respect to
any claim arising out of or relating to the subject matter of the
indemnification. Notwithstanding the foregoing, nothing in this Section 19-C
shall be deemed to require Purchaser to indemnify Seller for any claim, demand,
action, suit, assessment or judgment against Purchaser solely for contribution
(or similar action) because Seller appears in the chain of title.
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D. Procedure for Indemnification Claims. The respective indemnification
obligations of Seller and Purchaser pursuant to Section 19 shall be conditioned
upon compliance by Seller and Purchaser with the following procedures for
indemnification claims based upon or arising out of any claim, action or
proceeding by any person not a party to this Agreement.
(i) If at any time a claim shall be made or threatened, or an
action or proceeding shall be commenced or threatened, against a party
hereto (the "Aggrieved Party") which could result in liability of the
other party (the "Indemnifying Party") under its indemnification
obligations hereunder, the Aggrieved Party shall give to the
Indemnifying Party prompt notice of such claim, action or proceeding.
Such notice shall state the basis for the claim, action or proceeding
and the amount thereof (to the extent such amount is determinable at
the time when such notice is given) and shall permit the Indemnifying
Party to assume the defense of any such claim, action or proceeding
(including any action or proceeding resulting from any such claim).
Failure by the Indemnifying Party to notify the Aggrieved Party of its
election to defend any such claim, action or proceeding within a
reasonable time, but in no event more than fifteen days after notice
thereof shall have been given to the Indemnifying Party, shall be
deemed a waiver by the Indemnifying Party of its right to defend such
claim, action or proceeding; provided, however, that the Indemnifying
Party shall not be deemed to have waived its right to contest and
defend against any claim of the Aggrieved Party for indemnification
hereunder based upon or arising out of such claim, action or
proceeding.
(ii) If the Indemnifying Party assumes the defense of any such
claim, action or proceeding, the obligation of the Indemnifying Party
as to such claim, action or proceeding shall be limited to taking all
steps necessary in the defense or settlement thereof and, provided the
Indemnifying Party is held to be liable for indemnification hereunder,
to holding the Aggrieved Party harmless from and against any and all
losses, damages and liabilities caused by or arising out of any
settlement approved by the Indemnifying Party or any judgment or award
rendered in connection with such claim, action or proceeding. The
Aggrieved Party may participate, at its expense, in the defense of such
claim, action or proceeding provided that the Indemnifying Party shall
direct and control the defense of such claim, action or proceeding. The
Aggrieved Party agrees to cooperate and make available to the
Indemnified Party all books and records and such officers, employees
and agents as are reasonably necessary and useful in connection with
the defense. The Indemnifying Party shall not, in the defense of such
claim, action or proceeding, consent to the entry of any judgment or
award, or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or the plaintiff
to the Aggrieved Party of a release from all liability in respect of
such claim, action or proceeding, except in either event with the prior
consent of the Aggrieved Party.
(iii) If the Indemnifying Party does not assume the defense of
any such claim, action or proceeding, the Aggrieved Party may defend
against such claim, action or proceeding in such manner as it may deem
appropriate. The Indemnifying Party agrees to cooperate and make
available to the Aggrieved Party all books and records and such
officers, employees and agents as are reasonably necessary and useful
in connection with the defense.
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(iv) In the event an Aggrieved Party or Indemnifying Party
shall cooperate in the defense or make available books, records,
officers, employees or agents, as required by the terms of
subparagraphs (ii) and (iii), respectively, of this Section 19.F., the
party to which such cooperation is provided shall pay the out-of-pocket
costs and expenses including legal fees and disbursements) of the party
providing such cooperation and of its officers, employees and agents
reasonably incurred in connection with providing such cooperation, but
shall not be responsible to reimburse the party providing such
cooperation for such party's time or the salaries or costs of fringe
benefits or other similar expenses paid by the party providing such
cooperation to its officers and employees in connection therewith.
20. CAMPUS PROPERTIES.
Purchaser and Seller acknowledge and agree that with respect to the
campus properties (each, a "Campus Property") constituting one of the
Construction Residences identified on Schedule 20, the parties may determine
prior to the applicable Residency Closing Date that is not possible to legally
subdivide such Campus Properties from the adjacent facility or facilities. With
respect to any Campus Property that Purchaser and Seller determine cannot be so
legally subdivided, Purchaser and Seller agree that they shall negotiate in good
faith for Seller to convey such Campus Property together with the adjacent
facility or facilities to Purchaser at no increase in the Residence Purchase
Price applicable thereto and thereafter Purchaser and Seller shall enter into a
long term ground lease by Seller of the adjacent facility or facilities, which
long term ground lease shall be for an initial term of ninety-nine (99) years
and which shall be renewable at the option of Seller for an additional
ninety-nine (99) year term. Pursuant to such ground lease, the tenant thereunder
shall have all obligations for maintenance, repair and operation of such
adjacent facilities and the rent for such adjacent facilities shall be payable
in a single installment upon the commencement date in an amount equal to $1.00,
with rental for the renewal period to be equal to $1.00. Such lease shall be
fully assignable, transferable and subleaseable by the tenant thereunder who
shall also be entitled to mortgage or pledge such lease or its leasehold estate
in connection with any financing. The ground lease shall contain such provisions
as the parties shall negotiate in good faith to address issues involving
subordination/priority of financing transactions, nondisturbance rights and
other similar issues to afford Seller protection with respect to its leasehold
estate in the event of Purchaser's financing and to afford Purchaser protection
with respect to the impact on the financability of the Campus Property as a
result of the ground lease. Such ground lease shall contain such other customary
provisions as the parties so agree including appropriate easements, cost sharing
agreements and other similar matters. Notwithstanding the foregoing, neither
party shall have any obligation to engage in the above-described transaction if
it determines in its discretion that doing so may cause material problems for it
for accounting, tax, licensure, financing or other reasons such as future
marketability, in which event such Campus Property shall be treated under
Section 14.
21. POST-EXECUTION DELIVERY OF SCHEDULES.
Purchaser and Seller acknowledge that in the interest of expediting
execution of this Agreement, Seller had inadequate time to prepare and Purchaser
had inadequate time to review
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all of the necessary schedules to accompany this Agreement. Accordingly, Seller
hereby agrees that Seller shall, on or before the date thirty (30) days after
the date of this Agreement deliver to Purchaser Schedules identified on page
(iv) hereof as well as any additional schedules which Seller believes are
necessary to make Seller's representations and warranties, as qualified thereby,
true and accurate in all respects (the "Post-Execution Schedules"). Upon receipt
of all of the Post-Execution Schedules, Purchaser shall have a period of thirty
(30) days to review such Post-Execution Schedules, to request such additional
information or clarification as Purchaser shall reasonably deem necessary and to
object by notice to Seller to any matters shown thereon which in Purchaser's
reasonable judgment are material matters that Purchaser would have required
Seller address or correct prior to the execution hereof had adequate time been
available ("Objectionable Schedule Items"). Within ten (10) days after Seller's
receipt of Purchaser's notice with respect to any Objectionable Schedule Items,
Seller shall give notice to Purchaser either (i) refusing to cure the applicable
Objectionable Schedule Items or (ii) setting forth Seller's intent to cure such
Objectionable Schedule Items and stating in detail how Seller will accomplish
same. Failure of Seller to timely give such notice shall be deemed to be a
refusal by Seller to cure any such Objectionable Schedule Items. Upon the latter
of receipt of Seller's notice or expiration of the ten (10) day period, then
Purchaser may, at any time prior to ten (10) days after the receipt by Purchaser
of Seller's response or expiration of Seller's response time, by notice to
Seller, (x) elect to terminate Purchaser's obligation to purchase any
Construction Residence effected by such Objectionable Schedule Item pursuant to
this Agreement, whereupon the provisions of Section 14 shall be applicable with
respect to such Construction Residence or (y) accept such Construction
Residences subject to such Objectionable Schedule Items that Seller has not
undertaken to cure, in which event such Objectionable Schedule Items, together
with all other items appearing on the schedules to which Purchaser did not
object, will be deemed Acceptable Schedule Items hereunder. If Purchaser elects
option (ii) as to any Objectionable Schedules Items and at the applicable
Residence Closing Seller fails to cure the Objectionable Schedule Items in the
manner Seller has undertaken to so cure in its notice to Purchaser to the
satisfaction of Purchaser, Purchaser will again have the option set forth in (x)
and (y) above. In the event that Purchaser fails to timely notify Seller of
Objectional Schedule Items, then such failure to notify Seller shall constitute
a waiver of Purchaser's right to object to such Objectionable Schedule Items but
shall not be a waiver of Seller's other obligations hereunder nor a waiver of
Purchaser's right to object to matters that arise subsequent to such date.
22. CLOSING COMPLETED RESIDENCE; CLOSING PRIOR TO COMPLETION OF
CONSTRUCTION.
A. Completed Residence Defined. Purchaser and Seller acknowledge and
agree that Purchaser shall have no obligation to consummate the closing of any
Construction Residence hereunder unless and until such residence is a "Completed
Residence". As used herein, the term "Completed Residence" shall mean a
residence that satisfies all of the following: (i) such residence has been
completed in accordance with all Construction Items (as hereinafter defined)
approved by Purchaser and such completion has been certified by Seller's
architect in a certificate addressed to Purchaser; (ii) a certificate of
occupancy has been issued by the applicable governmental entity issuing such
permits in the jurisdiction in which the Construction Residence is located and
such certificate of occupancy is not conditioned or temporary; (iii) the
governmental agency or regulatory authority that conducts the physical
inspections necessary for the issuance of all applicable operating licensure
shall have completed such inspection and shall
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have provided a written report either identifying no defects in the physical
plant of the Construction Residence or, if such defects are noted, Seller shall
have corrected or caused such defects to be corrected and shall have provided
evidence thereof to Purchaser; (iv) all material items of Personal Property
shall be present at the Construction Residence acquired hereunder and (v) all
other obligations in Section 13 shall be satisfied.
B. Incomplete Residence. Purchaser and Seller acknowledge that it is
possible that some of the Construction Residences will not be Completed
Residences as of June 1, 1999 and accordingly, Purchaser and Seller agree that
notwithstanding such failure to meet such definition, Purchaser will be
obligated to acquire up to, but not to exceed, three (3) Construction Residences
which fail to meet the definition of Completed Residences on June 1, 1999. As to
any Construction Residence which fails to meet the definition of a Completed
Residence but which is included within the three (3) Construction Residences
that Purchaser is obligated to acquire on June 1, 1999 (hereinafter collectively
referred to as "Incomplete Residences"), at the Residence Closing for such
Incomplete Residence, Seller's architect shall certify the percentage of
construction of such residence which remain uncompleted and the percentage of
the Residence Purchase Price allocable thereto plus a ten percent (10%)
retainage shall be delivered into escrow with Title Company, (the "Escrow Fund")
who shall hold and disburse the Escrow Fund in accordance with an Escrow
Agreement. The Escrow Fund shall include not only the applicable proportionate
share of the purchase price allocable to the Incomplete Residence, but also any
additional sums for Personal Property that Seller is obligated to deliver
pursuant hereto but which is not in place at the Incomplete Residence as of the
Residence Closing Date. The Escrow Closing Agreement shall provide that Title
Company shall hold and disburse such Escrow Fund either on a construction draw
basis to be agreed upon by Purchaser and Seller or in a single disbursement when
the Construction Residence meets the definition of a Completed Residence and the
10% retainage shall be refunded at that time. In addition, upon the disbursement
of the Escrow Fund for such residence, Seller shall be obligated to deliver
final lien waivers so as to enable Title Company to endorse Purchaser's title
policy in an aggregate amount equal to the total purchase price (including the
Escrow Fund), with an appropriate date down endorsement and without exception
for mechanic's or materialmen's liens. At each Residence Closing, Seller shall
also assign to Purchaser all of Seller's rights under and with respect to any
architectural, engineering or construction contracts, and shall contain the
consent of the third parties thereto, and shall cause Purchaser to be named as a
dual obligee on any existing payment and performance bonds; provided, however,
that in the event that Seller is unable to obtain the consents of third parties
required hereunder, Seller shall not be deemed to be in default hereunder, but
Purchaser shall not be obligated to close the acquisition of the Construction
Residence affected thereby and the parties shall proceed as set forth in Section
14 hereof. Seller and Purchaser shall also execute and enter into a development
agreement at such Residence Closing whereby Seller will confirm its obligations
to complete or cause to be completed the construction of the Construction
Residence to satisfy the definition of a Completed Residence at no cost or
expense to Purchaser pursuant to a timetable agreed upon by Purchaser and Seller
therein and Seller will acknowledge that any cost overruns in completing such
construction shall be borne by Seller.
23. CONSTRUCTION OVERSIGHT AND RELATED ISSUES.
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A. Approval of Plans and Specifications. Within thirty (30) days after
the date of this Agreement, Seller shall deliver to Purchaser those items
identified on Schedule 23 hereto (the "Construction Items"). Purchaser shall
thereafter review the Construction Items and notify Seller with respect to any
matters found thereon that are inconsistent in any material respect with any
similar residence previously owned or operated by Seller as to the level of
tenant improvements and finishes, quality and quantity of Personal property and
other similar matters. Upon receipt of such notice, Seller and Purchaser shall
work together to resolve any disputes and to agree upon final specifications for
each of the Construction Items. Thereafter, at each Residence Closing, Seller
shall deliver such Construction Residence in compliance with the applicable
Construction Items related thereto, including, without limitation, fully stocked
with all applicable Personal Property necessary for the ordinary operation of
the facility upon the admission of residents.
B. Employees; Pre-Opening Expenses. Purchaser acknowledges that Seller
has existing Employees with respect to some of the Construction Residences,
which employees will be identified on Schedule 9-D to be delivered by Seller
hereunder. Purchaser agrees that Purchaser shall hire such employees to be
Purchaser's employees and to conduct such pre-opening market activities during
the first three (3) months that this Agreement is in effect, with all such
Employees to be employed by Purchaser by the earlier of (i) the Residence
Closing for the applicable Construction Residences or (ii) March 31, 1999.
Purchaser shall extend offers of employment to such employees at existing salary
or wage levels and on other terms and conditions which, taken as a whole, are
substantially equivalent to the terms and conditions under which such employees
are currently employed. Purchaser further agrees that with respect to any
Pre-Opening Expenses (as hereinafter defined) incurred by Seller commencing on
January 1, 1999, Purchaser shall reimburse Seller at the applicable Residence
Closing for any and all such amounts as shall have been previously submitted to
Purchaser pursuant to a budget and which Purchaser shall have approved in
advance (provided, however, that with respect to any expenditures made in
January, 1999, prior to submission or approval of such budget, Purchaser shall
be obligated to reimburse Seller with respect to such items as shall be incurred
by Seller in the ordinary course consistent with previous practices of Seller.)
As used herein, "Pre-Opening Expenses" shall mean and include advertising costs,
employee wages and benefits with respect pre-opening marketing activities,
recruiting costs associated therewith, supplies and general administrative and
similar expenses but shall not include any amounts with respect to the physical
construction of the Construction Residence.
C. Change Orders. In the event that following approval of any
Construction Items as hereinafter set forth, Seller desires to make any changes
with respect to such items, Seller shall seek Purchaser's approval thereof,
which approval will not be unreasonably withheld, conditioned or delayed.
24. TERMINATION.
In the event that as of July 31, 1999, there is any Construction
Residence as to which Seller and Purchaser shall not have consummated a
Residence Closing, either Purchaser or Seller may thereafter terminate this
Agreement with respect to such Construction Residence by delivery
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of written notice of termination to the other party. No such termination shall
affect either party's liability for any breach of this Agreement occurring prior
to such termination.
25. GENERAL PROVISIONS.
A. Agreement Binding; Assignment. This Agreement shall be binding upon
each party hereto and such party's successors and assigns and shall inure to the
benefit of each party hereto and such party's successors and assigns. As used
herein, all references to "Seller" shall mean individually each entity
constituting a Seller hereunder and collectively all such entities, all of which
shall be jointly and severally liable for the performance of all obligations of
Seller hereunder. Any reference herein to any "Seller entity" (or words of
similar import) are not intended to be in limitation of the foregoing definition
but are included for clarity purposes only. In addition, the term is to in all
instances to be broadly construed to include other affiliates of Seller
(including without limitation subsidiaries, affiliates, employees and others)
with respect to the making of any representations or warranties or the
performance of Seller's covenants or the breadth of Seller's knowledge, it being
the intent of the parties that the term in such context is to be broadly
construed even though such broad definition would not by its terms apply to the
joint and several aspects of this Agreement. Seller hereby expressly affirms its
obligations to cause all such affiliates to so comply, Seller hereby expressly
acknowledging that only Seller is in a position to best determine which of
Seller's affiliates should be the party making such representation or warranty,
performing such covenant or gathering such knowledge and the parties intend
Purchaser should not be disadvantaged thereby. As used in this Agreement,
Seller's "knowledge" shall mean the knowledge of all Employees of Seller who are
responsible for the matter at issue. Purchaser may assign this Agreement and
Purchaser's rights hereunder without the prior written consent of Seller to any
affiliate of Purchaser or to a real estate investment trust or an affiliated
lender to effect a sale/leaseback or other financing transaction, provided that
no such assignment shall affect Purchaser's obligations hereunder. Purchaser may
not otherwise assign its rights hereunder without Seller's prior written
consent.
A. Entire Agreement. This Agreement, the Addendum and all the Schedules
referenced herein and annexed hereto contain the entire agreement of the parties
hereto with respect to the matters contained herein, and no prior agreement or
understanding pertaining to any of the matters connected with this transaction
shall be effective for any purpose. Except as may be otherwise provided herein,
the agreements embodied herein may not be amended except by an agreement in
writing signed by the parties hereto.
B. Execution Necessary. This Agreement shall not be binding upon Seller
or Purchaser until fully executed and delivered by representatives of Seller or
Purchaser, as the case may be, and no action taken by Seller's or Purchaser's
representatives shall be deemed an acceptance of this Agreement until this
Agreement has been so executed by Seller or Purchaser, as the case may be, and
delivered to the other party hereto.
C. Time is of the Essence. Time is of the essence of the transaction
contemplated by this Agreement.
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D. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
E. Interpretation; Date of Agreement. The titles, captions and Section
headings are inserted for convenience only and are in no way intended to
interpret, define, limit or expand the scope or content of this Agreement or any
provision hereof. If any party to this Agreement is made up of more than one
person or entity, then all such persons and entities shall be jointly and
severally liable hereunder, even though the defined term for such party is used
in the singular in this Agreement and in each instance in which a defined term
for such party is used in the singular it shall mean, collectively, all persons
and entities, jointly and severally, and each person or entity constituting a
portion thereof, severably. If any time period under this Agreement ends on a
day other than a Business Day (as hereinafter defined), then the time period
shall be extended until the next business day. The term "Business Day" shall
mean Monday through Friday excluding holidays recognized by the state government
of the States of Ohio and Wisconsin. All references in this Agreement to "the
date of this Agreement" shall be deemed to refer to the date set forth in the
first Section hereof, which date evidences the effective date of the agreement
of the parties as to the terms and conditions set forth herein, regardless of
the date when this Agreement was actually executed by both parties.
F. Waiver. Purchaser or Seller, as the case may be, reserves the right
to waive, in whole or in part, any provision hereof which is for the benefit of
the party so waiving, including without limitation any condition precedent under
Section 12 hereof.
G. Facsimile Signature; Counterparts. This Agreement may be executed by
facsimile signature and in separate counterparts, each of which shall be deemed
an original and all of which, taken as a whole, shall be deemed to be one (1)
original. This Agreement shall be deemed fully executed when each party whose
signature is required has signed at least one (1) counterpart even though no one
(1) counterpart contains the signatures of all of the parties to this Agreement.
H. Non-Waiver. Unless otherwise expressly provided herein, no waiver by
Seller or Purchaser of any provision hereof shall be deemed to have been made
unless expressed in writing and signed by such party. No delay or omission in
the exercise of any right or remedy accruing to Seller or Purchaser upon any
breach under this Agreement shall impair such right or remedy or be construed as
a waiver of any such breach theretofore or thereafter occurring. The waiver by
Seller or Purchaser of any breach of any term, covenant or condition herein
stated shall not be deemed to be a waiver of any other breach, or of a
subsequent breach of the same or any other term, covenant or condition herein
contained.
I. Rights Cumulative. Subject to the limitations set forth in Section
18 and 19 hereof, all rights, powers, options or remedies afforded to Seller or
Purchaser either hereunder or by law shall be cumulative and not alternative,
and the exercise of one right, power, option or remedy shall not bar other
rights, powers, options or remedies allowed herein or by law, unless expressly
provided to the contrary herein.
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J. Schedules. The exhibits referred to in and attached to this
Agreement are incorporated herein in full by reference.
K. Attorneys' Fees. If there is any legal action, arbitration or
proceeding between Seller and Purchaser arising from or based on this Agreement
or the interpretation or enforcement of any provisions hereof, then the
unsuccessful party to such action, arbitration or proceeding shall pay to the
prevailing party all costs and expenses, including reasonable attorneys' fees,
incurred by such prevailing party in such action, arbitration or proceeding and
in any appeal in connection therewith. If such prevailing party recovers a
judgment in any such action, arbitration, proceeding or appeal, then such costs,
expenses and attorneys' fees shall be included in and as a part of such
judgment.
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IN WITNESS WHEREOF, the undersigned have caused their duly authorized
representatives to execute and deliver this Agreement as of the day and year
first above written.
SELLER:
HCR MANOR CARE, INC., a Delaware corporation
By: /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------------
Name: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------------
Its: Vice President and General Counsel
-----------------------------------------------
MANORCARE HEALTH SERVICES, INC.,
a Delaware corporation
By: /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------------
Name: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------------
Its: Vice President and General Counsel
-----------------------------------------------
COLEWOOD LIMITED PARTNERSHIP,
a Maryland limited partnership
By: AMERICAN HOSPITAL BUILDING
CORPORATION, a Delaware corporation, as its
General Partner
By: /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------------
Name: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------------
Its: Vice President and General Counsel
-----------------------------------------------
MANOR CARE OF BOYNTON BEACH, INC.,
a Florida corporation
By: /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------------
Name: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------------
Its: Vice President and General Counsel
-----------------------------------------------
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MANOR CARE OF MEADOW PARK, INC.,
a Washington corporation
By: /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------------
Name: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------------
Its: Vice President and General Counsel
-----------------------------------------------
ROANOKE ARDEN, L.L.C., a Delaware
limited liability company
By: MANOR CARE, INC., a Delaware corporation,
as its sole Member
By: /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------------
Name: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------------
Its: Vice President and General Counsel
-----------------------------------------------
PURCHASER:
ALTERNATIVE LIVING SERVICES, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------------
Its: Senior Vice President
-----------------------------------------------
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SCHEDULE I - CONSTRUCTION RESIDENCES
---------------------------------------------------------------------------------------------------------------------
Facility Name and HCR Manor
Care ID # Address Type Units Type of License to be Applied For
---------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇ ▇▇, #▇▇▇ ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ AC 60 Personal Care Boarding Home
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
---------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, #▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇. AC 60 Personal Care Boarding Home
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
---------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇, #▇▇▇ 5111 ▇▇▇▇▇▇ Ranch Parkway SH 109 AL Assisted Living Facility -
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (plus Limited Nursing Service
60 SNF)
---------------------------------------------------------------------------------------------------------------------
Decatur, #650 ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ AC 60 Personal Care Home
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
---------------------------------------------------------------------------------------------------------------------
Charlotte, #▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ AC 56 Adult Care Home
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
---------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇, #368 ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ Assisted Living Residence
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
---------------------------------------------------------------------------------------------------------------------
Roanoke, #653 ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ AC 56 Adult Care Residence, Assisted
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Living Facility
---------------------------------------------------------------------------------------------------------------------
Lynnwood, #447 ▇▇▇▇▇ ▇▇▇▇ ▇▇▇. AC 60 Boarding Home
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
---------------------------------------------------------------------------------------------------------------------
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SCHEDULE II - OPERATING RESIDENCES
---------------------------------------------------------------------------------------------------------------------
Facility Name and HCR Manor Type of License and Number of
Care ID # Address Type Units Licensed Beds
---------------------------------------------------------------------------------------------------------------------
Mesa, #329 ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ AC 56 Unclassified Residential Care
▇▇▇▇, ▇▇ ▇▇▇▇▇ Facility until 5/31/99, then
Directed Care - 56 beds
---------------------------------------------------------------------------------------------------------------------
Sun City West, #428 21739 North 151st Avenue AC 56 Directed Care (new category) - ▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ beds
---------------------------------------------------------------------------------------------------------------------
Peoria, #630 ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ AC 56 Directed Care - 56 beds
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
---------------------------------------------------------------------------------------------------------------------
Tucson, #497 ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ Unclassified Residential Care
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Facility until 12/31/99; then
Directed Care - 109 beds
---------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, #▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇ 56 Residential Care Facility for the
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Elderly - 56 beds
---------------------------------------------------------------------------------------------------------------------
Whittier, #480 ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ SH 75 Residential Care Facility for the
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Elderly - 146 beds
---------------------------------------------------------------------------------------------------------------------
Brea, #474 ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ Residential Care Facility for the
▇▇▇▇, ▇▇ ▇▇▇▇▇ Elderly - 196 beds
---------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, #▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ Care Facility for the
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Elderly - 186 beds
---------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇, #▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ Assisted Living Facility -
Dunedin, FL Extended Congregate Care - 120
beds
---------------------------------------------------------------------------------------------------------------------
Sarasota, #496 ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ Assisted Living Facility -
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Limited Nursing Service - 120 beds
---------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇, #▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ SH 125 Assisted Living Facility -
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Standard (applying for Limited
Nursing Service)
---------------------------------------------------------------------------------------------------------------------
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---------------------------------------------------------------------------------------------------------------------
Facility Name and HCR Manor
Care ID # Address Type Units Type of License to be Applied For
---------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, #▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇ Assisted Living Facility, Limited
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Nursing Service - 127 beds
---------------------------------------------------------------------------------------------------------------------
▇▇▇▇ County, #330 ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ AC 56 Personal Care Home - 56 beds
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
---------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ County, #331 ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ AC 56 Personal Care Home - 56 beds
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
---------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ County, #391 ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ SH 109 Personal Care Home - 109 beds
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
---------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇, #▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ AC 60 Adult Care Home - Residential
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ Health Care - 56 beds
---------------------------------------------------------------------------------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇, #▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ Assisted Living Residence - ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ beds
---------------------------------------------------------------------------------------------------------------------
Wayne, #382 ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ SH 105 Assisted Living Residence - 105
▇▇▇▇▇, ▇▇ ▇▇▇▇▇ beds
---------------------------------------------------------------------------------------------------------------------
Reno, #375 ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ AC 56 Residential Facility for Groups -
▇▇▇▇, ▇▇ ▇▇▇▇▇ 56 beds
---------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇, #▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ SH 96 Rest Home
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
---------------------------------------------------------------------------------------------------------------------
Woodridge, #502 ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇. SH 189 Rest Home
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
---------------------------------------------------------------------------------------------------------------------
45