ii
EXHIBIT 10.4
Purchase and Sale Agreement
between
CNL Health Care Partners, LP
and
Marriot Senior Living Services, Inc.
PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
MARRIOTT INTERNATIONAL, INC.
as MI,
and
MARRIOTT SENIOR LIVING SERVICES, INC.
as Seller,
and
CNL HEALTH CARE PARTNERS, L.P.
as Purchaser
---------------------------
Dated: March 23, 2000
TABLE OF CONTENTS
SECTION 1. DEFINITIONS...........................................................................................1
SECTION 2. PURCHASE-SALE; DILIGENCE..............................................................................3
2.1 Purchase-Sale............................................................................................3
2.2 Diligence Inspections....................................................................................3
2.3 Title Matters............................................................................................3
2.4 Survey...................................................................................................3
2.5 Environmental Report.....................................................................................3
2.6 Immaterial Taking........................................................................................3
SECTION 3. PURCHASE AND SALE.....................................................................................3
3.1 Closing....................................................................................................3
3.2 Purchase Price.............................................................................................3
3.3 Competitor.................................................................................................3
SECTION 4. CONDITIONS TO PURCHASER'S OBLIGATION TO CLOSE.........................................................3
4.1 Closing Documents..........................................................................................3
4.2 Condition of the Property..................................................................................3
4.3 Title Policies.............................................................................................3
4.4 Opinions of Counsel........................................................................................3
4.5 FF&E Schedule..............................................................................................3
4.6 Other......................................................................................................3
SECTION 5. CONDITIONS TO SELLER'S OBLIGATION TO CLOSE............................................................3
5.1 Purchase Price.............................................................................................3
5.2 Closing Documents..........................................................................................3
5.3 Opinions of Counsel........................................................................................3
SECTION 6. REPRESENTATIONS AND WARRANTIES OF SELLER..............................................................3
6.1 Status and Authority of the Seller.........................................................................3
6.2 Status and Authority of MI.................................................................................3
6.3 Status and Authority of Tenant.............................................................................3
6.4 Employees..................................................................................................3
6.5 Existing Agreements........................................................................................3
6.6 Tax Returns................................................................................................3
6.7 Action of MI and Seller....................................................................................3
6.8 No Violations of Agreements................................................................................3
6.9 Litigation.................................................................................................3
6.10 Not A Foreign Person......................................................................................3
6.11 Construction Contracts; Mechanics' Liens..................................................................3
6.12 Permits, Licenses.........................................................................................3
6.13 Hazardous Substances......................................................................................3
6.14 Insurance.................................................................................................3
6.15 Financial Information.....................................................................................3
6.16 Contracts.................................................................................................3
6.17 Title to FF&E.............................................................................................3
6.18 FF&E......................................................................................................3
SECTION 7. REPRESENTATIONS AND WARRANTIES OF PURCHASER...........................................................3
7.1 Status and Authority of the Purchaser......................................................................3
7.2 Status and Authority of the Guarantors.....................................................................3
7.3 Action of the Purchaser....................................................................................3
7.4 No Violations of Agreements................................................................................3
7.5 Litigation.................................................................................................3
SECTION 8. COVENANTS OF THE SELLER...............................................................................3
8.1 Compliance with Laws.......................................................................................3
8.2 Correction of Defects......................................................................................3
8.3 Insurance..................................................................................................3
8.4 Material Defects in Structural Systems.....................................................................3
SECTION 9. APPORTIONMENTS........................................................................................3
9.1 Apportionments.............................................................................................3
9.2 Closing Costs..............................................................................................3
SECTION 10. DEFAULT..............................................................................................3
10.1 Default by the Seller.....................................................................................3
10.2 Default by the Purchaser..................................................................................3
10.3 Purchaser's Deposit.......................................................................................3
SECTION 11. MISCELLANEOUS........................................................................................3
11.1 Agreement to Indemnify....................................................................................3
11.2 Brokerage Commissions.....................................................................................3
11.3 Publicity.................................................................................................3
11.4 Notices...................................................................................................3
11.5 Waivers, Etc..............................................................................................3
11.6 Assignment; Successors and Assigns........................................................................3
11.7 Severability..............................................................................................3
11.8 Counterparts, Etc.........................................................................................3
11.9 Governing Law.............................................................................................3
11.10 Performance on Business Days.............................................................................3
11.11 Attorneys' Fees..........................................................................................3
11.12 Relationship.............................................................................................3
11.13 Section and Other Headings...............................................................................3
11.14 Disclosure...............................................................................................3
Schedule A - Purchase Price
Schedule B - Guaranty
Schedule C - Lease Agreement
Schedule D - Limited Rent Guaranty
Schedule E - Membership Interest Pledge Agreement
Schedule F - Form of Owner Agreement
Schedule G - Permitted Encumbrances
Schedule H - Plans & Specifications
Schedule I - Legal Description of the Real Property
Schedule J - Owner's Policy Commitment
Schedule K - Leasehold Policy Commitment
Schedule L - Survey
Schedule M - Form of Architect's Certificate
Schedule M-1 - Form of Marriott's Architect Certificate
Schedule N - Form of Engineer's Certificate
Schedule N-1 - Form of Marriott's Engineer Certificate
Schedule O - Operating Agreement
Schedule P - Escrow Agreement
Schedule Q - Environmental Report
Schedule R - FF&E Schedule
3
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT is made as of the 23rd day of March,
2000, by and between MARRIOTT SENIOR LIVING SERVICES, Inc., a Delaware
corporation, as seller, and CNL HEALTH CARE PARTNERS, L.P., a Delaware limited
partnership, as purchaser, and joined in by MARRIOTT INTERNATIONAL, INC., a
Delaware corporation.
W I T N E S S E T H :
WHEREAS, the Seller (this and other capitalized terms used and not
otherwise defined herein having the meanings ascribed to such terms in Section
1) is, the owner of the Property; and
WHEREAS, Purchaser desires to purchase the Property and thereby acquire
all of the Seller's right, title and interest in and to the Property upon the
terms and conditions hereinafter set forth; and
WHEREAS, the Seller desires to sell to the Purchaser the Property and
thereby convey all right, title and interest in the Property, upon the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the mutual receipt and
legal sufficiency of which are hereby acknowledged, the Seller and the Purchaser
hereby agree as follows:
SECTION 1. DEFINITIONS.
Capitalized terms used in this Agreement and not defined elsewhere
herein shall have the meanings set forth below, in the Section of this Agreement
referred to below, or in such other document or agreement referred to below:
"Act of Bankruptcy" shall mean if a party hereto or any general partner
thereof or Tenant shall (a) apply for or consent to the appointment of, or the
taking of possession by, a receiver, custodian, trustee or liquidator of itself
or all of or a substantial part of its property; (b) admit in writing its
inability to pay its debts as they become due; (c) make a general assignment for
the benefit of its creditors; (d) file a voluntary petition or commence a
voluntary case or proceeding under the Federal Bankruptcy Code (as now or
hereafter in effect); (e) be adjudicated a bankrupt or insolvent; (f) file a
petition seeking to take advantage of any other law relating to bankruptcy,
insolvency, reorganization, winding-up or composition or adjustment of debts;
(g) fail to controvert in a timely and appropriate manner, or acquiesce in
writing to, any petition filed against it in an involuntary case or proceeding
under the Federal Bankruptcy Code (as now or hereafter in effect); or (h) take
any corporate or partnership action for the purpose of effecting any of the
foregoing; or if the proceeding or case shall be commenced, without the
application or consent of a party hereto or any general partner thereof or
Tenant, in any court of competent jurisdiction seeking (1) the liquidation,
reorganization, dissolution or winding-up, or the composition or readjustment of
debts, of such party or general partner or Tenant; (2) the appointment of a
receiver, custodian, trustee or liquidator for such party or general partner or
Tenant or all or any substantial part of its assets; or (3) other similar relief
under any law relating to bankruptcy, insolvency, reorganization, winding-up or
composition or adjustment of debts, and such proceeding or case shall continue
undismissed; or an order (including an order for relief entered in an
involuntary case under the Federal Bankruptcy Code, as now or hereinafter in
effect), judgment or decree approving or ordering any of the foregoing shall be
entered and continue unstated and in effect, for a period of sixty (60)
consecutive days.
"Agreement" shall mean this Purchase and Sale Agreement, together with
Schedules A through Q hereto, as it and they may be amended from time to time as
herein provided.
"Architect" shall mean Shayman, Salk, Sussholz & Company.
"As-Built' Drawings" shall mean the final "as-built" plans and
specifications for the Improvements which are to be furnished by the Seller to
Purchaser pursuant to Section 4.1 of this Agreement.
"Assets" shall mean all of the FF&E, the Contracts and the Intangible
Property, collectively, now owned or hereafter (but prior to the Closing Date)
acquired by Seller in connection with or relating to the Property other than any
Excluded Assets.
"Business Day" shall mean any day other than a Saturday, Sunday or any
other day on which banking institutions in the State of Maryland are authorized
by law or executive action to close.
"CHCP" shall mean CNL Health Care Property, Inc., a Maryland
corporation.
"CHCLP" shall mean CNL Health Care Partners, L.P., a Delaware limited
partnership.
"Closing" shall have the meaning given such term in Section 3.1.
"Closing Date" shall have the meaning given such term in Section 3.1.
"Competitor" shall mean a Person that owns or has an equity interest in
an assisted living facility brand, tradename, system or chain (a "Brand") which
is comprised of at least ten assisted living facilities; provided that such
Person shall not be deemed a Competitor if it holds its interest in a Brand
merely as a mere passive investor that has no control or influence over the
business decisions of the Brand at issue, such as a mere limited partner in a
partnership, a mere shareholder in a corporation or a mere payee of royalties
based on a prior sale transaction. A mere passive investor that is represented
by a Mere Director on the board of directors of a Competitor shall not be deemed
to have control or influence over the business decisions of that Competitor.
"Contracts" shall mean, with respect to the Property, any equipment
leases relating to the Property and disclosed to Purchaser on or before Closing
and which are to survive the Closing and to which the Seller is a party.
"Controlling Interest" shall mean (a) as to a corporation, the right to
exercise, directly or indirectly, more than fifty percent (50%) of the voting
rights attributable to the shares of the Entity (through ownership of such
shares or by contract), and (b) as to an Entity not a corporation, the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of the Entity.
"Deposit" shall have the meaning given such term in Section 10.3.
"Engineer" shall mean ▇▇▇▇▇▇▇ Consulting Ltd.
"Entity" shall mean any corporation, general or limited partnership,
limited liability company, partnership, stock company or association, joint
venture, association, company, trust, bank, trust company, land trust, business
trust, cooperative, any government or agency or political subdivision thereof or
any other entity.
"Excluded Assets" shall mean (i) any right, title or interest in any
name containing any of the names "Marriott" and "Brighton Gardens" and other
marks used, or that may in the future be used, by MI or its affiliates,
including the Seller of such Property (and Seller and MI shall have the right to
remove any such name or ▇▇▇▇ appearing on any signage or other property pursuant
to the terms of the Operating Agreement), (ii) all property owned by the Seller
or any of its affiliates, not normally located at the Property and used, but not
exclusively, in connection with the operation of the Property, (iii) all items,
tangible or intangible, consisting of Proprietary Information, (iv) computer
software, (v) FAS, (vi) any Inventories located at the Property, (vii) working
capital, including without limitation, cash, bank accounts and accounts
receivable owned or held by Seller or any of its affiliates, (viii) all books,
ledger sheets, files and records, (ix) all contracts pertaining to the operation
of the Property other than the Contracts, and (x) any software, manuals,
brochures or directives used by the Seller or any of its affiliates, in the
operation of the Property.
"FAS" shall have the meaning given such term in the Lease.
"FF&E" shall mean all appliances, machinery, devices, fixtures,
appurtenances, equipment, furniture, furnishings and articles of tangible
personal property of every kind and nature whatsoever owned by the Seller or any
of its affiliates, and located in or at, or used in connection with the
ownership, operation or maintenance of such Property, other than motor vehicles.
"FF&E Schedule" shall have the meaning given such term in Section 4.5.
"Operating Agreement" shall mean the Operating Agreement to be entered
into at or prior to the Closing of the purchase and sale of the Property between
Tenant, as Owner, and Seller, as Operator, substantially in the form attached
hereto at Schedule O.
"Guarantor" shall mean CHCP and CHCLP, jointly and severally.
"Guaranty of Landlord's Obligations" shall mean the Guaranty in the
form of Schedule B hereto to be entered into by Guarantor for the benefit of
Tenant, in respect of the Lease and guarantying the landlord's obligations under
the Lease.
"Immaterial Taking" shall have the meaning given such term in Section
2.6.
"Improvements" shall mean all buildings, fixtures, walls, fences,
landscaping and other structures and improvements situated on, affixed or
appurtenant to the Real Property, including, but not limited to, all pavement,
access ways, curb cuts, parking, kitchen and support facilities, meeting and
conference rooms, swimming pool facilities, recreational amenities, office
facilities, drainage system and facilities, air ventilation and filtering
systems and facilities and utility facilities and connections for sanitary
sewer, potable water, irrigation, electricity, telephone, cable television and
natural gas, if applicable, to the extent the same form a part of the Property
and all appurtenances thereto acquired by Purchaser in connection with
Purchaser's acquisition of the Property pursuant to the terms of this Agreement.
"Intangible Property" shall mean, with respect to any Property, all
transferable or assignable (a) governmental permits, including licenses and
authorizations, required for the construction, ownership and operation of the
Improvements, including without limitation certificates of occupancy, building
permits, signage permits, liquor licenses, site use approvals, zoning
certificates, environmental and land use permits and any and all necessary
approvals from state or local authorities (hereinafter defined as "Permits") and
other approvals granted by any public body or by any private party pursuant to a
recorded instrument relating to the Property and (b) certificates, licenses,
warranties and guarantees and the Contracts held by Seller, other than (x) the
Excluded Assets and (y) such permits, operating permits, certificates, licenses
and approvals which are to be held by, or transferred to, the Tenant in order to
permit the Tenant to operate such Property properly in accordance with the terms
of the Lease.
"Inventories" shall have the meaning given such term in the Lease.
"Lease" shall mean the Lease Agreement in the form of Schedule C
attached hereto to be entered into by Tenant and Purchaser.
"Limited Rent Guaranty" shall mean the Limited Rent Guaranty in the
form of Schedule D hereto to be entered into by MI in respect of the Lease.
"Membership Interest Pledge" shall mean the Membership Interest Pledge
Agreement in the form of Schedule E hereto to be entered into by MI, or its
affiliates, owning all of the outstanding membership interests in Tenant, as
pledgor, and the Purchaser of such Property, as pledgee, as further security for
the performance of Tenant's obligations under the Lease for such Property.
"Mere Director" shall mean a Person who holds the office of director of
a corporation and who, as such director, has the right to vote not more than
twelve and one-half percent (12.5%) of the total voting rights on the board of
directors of such corporation, and who represents or acts on behalf of a mere
passive investor which neither (i) owns more than three percent (3%) of the
total voting rights attributable to all shares or ownership interests of a
Competitor, nor (ii) otherwise has the power to direct or cause the direction of
the management or policies of a Competitor.
"MI" shall mean Marriott International, Inc., a Delaware corporation,
its successor or successors by merger or operation of law, and assignee or
assignees to whom it has transferred all or substantially all of its assisted
living facility assets and/or businesses and which assumes in writing Marriott
International, Inc.'s obligations under this Agreement.
"Owner Agreement" shall mean the Owner Agreement in substantially the
form of Schedule F hereto to be entered into by MI, Tenant and CHCLP in respect
of the Lease.
"Permitted Encumbrances" shall mean: (a) any and all matters affecting
title to the Property as shown on Schedule G hereto; (b) liens for taxes,
assessments and governmental charges with respect to the Property not yet due
and payable or due and payable but not yet delinquent; (c) applicable zoning
regulations and ordinances and other governmental laws, ordinances and
regulations; (d) such other nonmonetary encumbrances which were granted by
Seller in order to facilitate, in Seller's reasonable discretion, the
construction and operation of the Improvements; (e) any utility, drainage or
other easements which are customary in connection with (or which reasonably
serve) the Improvements; (f) the Lease; (g) such other nonmonetary encumbrances
with respect to the Property which are not objected to by the Purchaser in
accordance with Section 2.3; and (h) such matters as are disclosed by the
Existing Survey.
"Person" shall mean any individual or Entity, and the heirs, executors,
administrators, legal representatives, successors and assigns of such Person
where the context so admits.
"Plans and Specifications" shall mean those certain plans and
specifications which have been approved by Purchaser and which are identified on
Schedule H.
"Property" shall mean the Real Property and Improvements, together with
the Assets relating to the Property.
"Proprietary Information" shall have the meaning given such term in
the Lease.
"Purchase Price" shall mean the amount set forth on Schedule A hereto.
"Purchaser" shall mean CHCLP and its permitted successors and assigns.
"Real Property" shall mean the real property described in Schedule I to
this Agreement, together with all easements, rights of way, privileges, licenses
and appurtenances which the Seller may now own or hereafter acquire with respect
thereto, less any portion or portions thereof taken by way of an Immaterial
Taking.
"Reserve" shall have the meaning given such term in the Lease.
"Seller" shall mean Marriott Senior Living Services, Inc.
"Tenant" shall mean a limited liability company, wholly-owned, directly
or indirectly, by MI.
"Title Commitments" shall have the meaning given such term in Section
2.3.
"Title Company" shall mean First American Title Insurance Company or
such other title insurance company as shall have been approved by the Purchaser
and the Seller.
SECTION 2. PURCHASE-SALE; DILIGENCE.
2.1 Purchase-Sale. In consideration of the mutual covenants herein
contained, the Purchaser hereby agrees to purchase the Property from the Seller
and the Seller hereby agrees to sell the Property to the Purchaser for the
Purchase Price, subject to and in accordance with the terms and conditions of
this Agreement.
2.2 Diligence Inspections. Purchaser has approved (or is deemed to have
approved for purposes of this Agreement) the Property in its "as is, where is"
condition as of the date hereof. The Seller shall permit the Purchaser and its
representatives to inspect the Improvements at such reasonable times as the
Purchaser or its representatives may request by reasonable prior notice to the
Seller. During any such inspection, the Purchaser and its representatives shall
minimize any resulting interference with the operation of the Property. To the
extent that, in connection with such investigations, the Purchaser, its agents,
representatives or contractors, damages or disturbs the Property, the Purchaser
shall return the same to substantially the same condition which existed
immediately prior to such damage or disturbance. The Purchaser shall indemnify,
defend and hold harmless the Seller from and against any and all expense, loss
or damage (including, without limitation, reasonable attorneys' fees) which the
Seller may incur as a result of any act or omission of the Purchaser or its
representatives, agents or contractors in connection with any such inspections,
other than any expense, loss or damage arising from any act or omission of the
Seller. The foregoing indemnification agreement shall survive the termination of
this Agreement and the Closing hereunder.
2.3 Title Matters. Purchaser has approved (or is hereby deemed to have
approved) the state of title to the Property and all exceptions thereto
reflected in the written commitments for the issuance of (a) a title insurance
policy for the Property, a copy of which commitment is attached hereto as
Schedule J (the "Commitment"), and (b) a Leasehold Owner's Title Insurance
Policy for the Property naming Tenant as the insured, a copy of which commitment
is attached hereto as Schedule K (the "Leasehold Policy Commitment") (the
Commitment and Leasehold Policy Commitment herein, collectively, the "Title
Commitments"). Purchaser has approved the Commitment and the form of policy
provided for therein. MI has approved the Leasehold Policy Commitment and the
form of the leasehold policy provided for therein on behalf of the Tenant.
In the event that Seller decides to encumber a Property with an
additional document, instrument or other matter, Seller shall give Purchaser
notice thereof together with a copy of the document, instrument or other matter
to be placed of record against the Property ("Additional Exception"). Within
five (5) Business Days after receipt of a notice of any Additional Exception
with respect to any Property, the Purchaser shall give the Seller notice of its
approval or disapproval thereof. Purchaser shall not withhold its approval of
any such Additional Exception which would be a Permitted Encumbrance specified
in clauses (a) through (g), inclusive, of the definition of Permitted
Encumbrance in Section 1, and shall not unreasonably withhold, delay or
condition its approval of any other Additional Exception. If Purchaser fails to
respond within said five (5) Business Day period, Purchaser shall be deemed to
have approved such Additional Exception. If Purchaser unreasonably disapproves
of any Additional Exception, Seller shall be excused from performing any term or
condition (or any portion or aspect of a term or condition) of this Agreement
which Seller is unable or unwilling to perform as a result of its inability to
enter into and/or record such Additional Exception.
In the event that an encumbrance is placed on any Property (other than
a monetary encumbrance, which Seller shall pay, provided such encumbrance does
not exceed $250,000) as a result of judicial action taken by a local, state, or
Federal governmental entity with respect to violation of any state or Federal
environmental laws not caused by, authorized or acquiesced to by Seller, the
Purchaser's sole remedy shall be (A) to terminate this Agreement, in which event
this Agreement shall terminate and be of no further force or effect and Seller
shall reimburse to Purchaser the Purchaser's expenses incurred in respect of the
Property, not to exceed $5,000 (and direct Escrow Agent to refund to Purchaser
the Deposit as provided in Section 10.3) or (B) to consummate the transactions
contemplated hereby, notwithstanding such encumbrance, without any abatement or
reduction in the Purchase Price for the Property on account thereof.
2.4 Survey. Purchaser has approved the survey ("Existing Survey") for
the Property and all matters shown thereon (other than the billboard on the
southwest corner of the Property), which survey is identified on Schedule L
attached hereto.
2.5 Environmental Report. Purchaser has approved and accepts the
environmental condition of the Property as existing on the date hereof and as
reflected in the environmental report or reports in respect of the Property
identified in Schedule Q hereto.
2.6 Immaterial Taking. If prior to the Closing of the purchase of the
Property, such Property is the subject of a condemnation which does not, in
Seller's reasonable opinion, affect any material part of the Improvements and
does not materially adversely affect access to the Improvements or compliance
with applicable zoning or building requirements, including parking (an
"Immaterial Taking"), Seller will provide written notice of such Immaterial
Taking to Purchaser and this Agreement will remain in full force and effect in
respect of the purchase and sale of such Property, but with an abatement of the
Purchase Price for such Property equal to the amount of the award paid to Seller
on account of such taking, less the amount of Seller's costs and expenses,
including reasonable attorneys' fees and expenses, in establishing and
collecting such award.
SECTION 3. PURCHASE AND SALE.
3.1 Closing. (a) The purchase and sale of the Property shall be
consummated at a closing (the "Closing") in escrow with the Title Company at the
offices of Seller at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, or at such other
location as the Seller and the Purchaser may agree, at 10:00 a.m. local time on
the date (the "Closing Date") that is three (3) Business Days after Purchaser
receives written notice that the condition set forth in Section 4.1(x) has been
fulfilled but not earlier than April 4, 2000 and not later than April 14, 2000.
3.2 Purchase Price. At the Closing, the Purchase Price for the Property
shall be payable by wire transfer of immediately available funds on the Closing
Date to an account or accounts to be designated by the Seller prior to the
Closing, subject to any adjustments and apportionments made pursuant to Section
9.1 of this Agreement.
3.3 Competitor. In the event that any sale, assignment, transfer or
other disposition, for value or otherwise, voluntary or involuntary, by merger,
operation of law or otherwise, in a single transaction or a series of
transactions, of any interest in Purchaser or any Person having an interest in
Purchaser, directly or indirectly, results, directly or indirectly, in a
Competitor owning a Controlling Interest in Purchaser, Seller shall have the
right, but not the obligation, to terminate this Agreement (and such termination
shall not constitute a default under any of the related transactions or
documents contemplated thereby, including this Agreement), and, solely with
respect to this Section 3.3, Purchaser shall be entitled to direct Escrow Agent
to refund to Purchaser the entire Deposit.
SECTION 4. CONDITIONS TO PURCHASER'S OBLIGATION TO CLOSE.
The obligation of the Purchaser to acquire the Property on the Closing
Date shall be subject to the satisfaction or waiver of the following conditions
precedent on and as of the Closing Date:
4.1 Closing Documents. The Seller shall have delivered to the Purchaser
with respect to the applicable Property:
(a) A special warranty deed, duly executed by the Seller, conveying to
Purchaser good and marketable title to the Property, free from all liens,
encumbrances, security interests, options and adverse claims of any kind or
character, subject to the Permitted Encumbrances and except as otherwise
specifically permitted hereunder;
(b) A Warranty ▇▇▇▇ of Sale, an Assignment of Contracts, an Assignment
of Intangible Property and an Assignment of Construction-Related Contracts, each
duly executed by Seller (or MI, as applicable), transferring and assigning to
Purchaser all rights, title and interest of Seller (and MI, as applicable) in
the Assets, together with, to the extent the same are in the Seller's or MI's
(or their agent's) possession, original (or copies certified by Seller as true
and correct), fully executed copies of all agreements constituting any of the
same;
(c) The Lease for the Property duly executed by Tenant;
(d) The Limited Rent Guaranty duly executed by MI;
(e) The Membership Interest Pledge duly executed by Seller;
(f) A copy of the fully executed Operating Agreement with respect to
the Property ;
(g) The Owner Agreement duly executed by MI;
(h) A copy of the final certificate of occupancy for the Property;
(i) An architect's certificate in respect of the Improvements to the
Property in the form attached hereto as Schedule M, or as otherwise provided in
Section 4.2(c) below;
(j) An engineer's certificate in respect of the Improvements to the
Property in the form attached hereto as Schedule N, or as otherwise provided in
Section 4.2(c) below;
(k) Certified copies of applicable resolutions and certificates of
incumbency with respect to the Seller, Tenant, MI, and such other persons as the
Purchaser may reasonably require;
(l) A certificate of a duly authorized officer of MI and Seller
confirming the continued truth and accuracy of the representations and
warranties of the Seller in this Agreement (subject to such changes as Seller
has given notice of to Purchaser pursuant to Section 6 and subject to Section
4.2(b));
(m) A copy of the certificate of substantial completion substantially
in the form of AIA G704, if any, and a copy of the final "punch list" of
incomplete work, if any, required upon substantial completion of the
Improvements;
(n) The "As-Built" Drawings;
(o) The Permits (or copies thereof certified by Seller as true
and correct);
(p) The Contracts (or copies thereof certified by Seller as true
and correct);
(q) Copies of any and all warranties and guarantees pertaining to the
Improvements, specifically including the manufacturers roof membrane warranty
issued with respect to the buildings comprising the Improvements;
(r) Insurance certificates to be provided by Tenant pursuant to
the Lease;
(s) The FF&E Schedule;
(t) An Owner's affidavit in the usual and customary form of the Title
Company for the purpose of satisfying any request for the same in the applicable
Title Commitment;
(u) A settlement statement;
(v) Joint written notification from Seller and Purchaser to Escrow
Agent pursuant to the Escrow Agreement (hereinafter defined) authorizing the
release to Seller of the Deposit for application to the Purchase Price for such
Property;
(w) A certificate duly executed by Seller as required by the Illinois
Responsible Party Transfer Act;
(x) Evidence of the approval by the Illinois Health Facilities Planning
Board of a Certificate of Exemption from Change of Ownership relating to the
transfer of ownership of the Property from Seller to Purchaser; and
(y) An "as-built" survey prepared by ▇▇▇▇▇▇▇ Consulting, Ltd. dated as
of March 2000 which does not disclose any matter not referred to in clauses (a),
(c), (d), (e) or (g) of the definition of Permitted Encumbrances and that would
become an additional exception in the title policies issued pursuant to the
Title Commitments and not set forth in the Title Commitments.
(z) Such other documents, certificates and other instruments as may be
reasonably required to consummate the transaction contemplated hereby.
4.2 Condition of the Property
(a) No action shall be pending or threatened for the condemnation or
taking by power of eminent domain of all or any material portion of the
Property;
(b) All material licenses, permits and other authorizations necessary
for the current use, occupancy and operation of the Property shall be in full
force and effect; however, in the event that Seller fails to obtain any such
licenses, permits or other authorizations and discloses same to Purchaser,
Purchaser may, but shall not be required to, waive Seller's compliance with
Section 6.12 of this Agreement and proceed with Closing; and
(c) The Purchaser shall have received an architect's certificate in the
form of Schedule M executed by the Architect and an engineer's certificate in
the form of Schedule N, executed by the Engineer in respect of the applicable
Property; provided, however, that in the event that Seller is not able to
deliver to Purchaser either or both of the foregoing certificates executed by
the Architect and/or Engineer, as applicable, Purchaser shall accept in lieu
thereof, a certificate executed by Seller in substantially the form attached
hereto as Schedule M-1 and/or Schedule N-1, as applicable.
4.3 Title Policies. The Title Company shall be prepared, subject only
to payment of the applicable premium and delivery of all conveyance documents,
to issue the title policies pursuant to the Title Commitments, in accordance
with Section 2.3.
4.4 Opinions of Counsel. The Purchaser shall have received a written
opinion from counsel to the Seller and MI (which may be its in-house counsel),
in form and substance reasonably satisfactory to the Purchaser and its counsel,
regarding the organization, good standing and/or authority of the Seller and MI,
the Tenant, and the guarantor under the Limited Rent Guaranty and the
enforceability of this Agreement, the Lease, the Limited Rent Guaranty, the
Owner Agreement and the Membership Interest Pledge and such other matters with
respect to the transactions contemplated by this Agreement as the Purchaser may
reasonably require.
4.5 FF&E Schedule. Attached hereto as Schedule R is a schedule (the
"FF&E Schedule") of all FF&E at the Property owned by Seller and which FF&E is
intended to be part of the Assets to be owned by Purchaser upon and following
such Closing. Upon reasonable prior notice to Seller, Purchaser shall be
entitled to inspect the FF&E at the Property prior to Closing in order to
confirm and verify the FF&E Schedule.
4.6 Other.
(a) The representations and warranties of the Seller and MI set forth
in Section 6 hereof (as the same may have been changed by notice from Seller as
provided therein) shall be true, correct and complete in all material respects
on and as of the Closing Date;
(b) No Act of Bankruptcy on the part of the Seller, MI or Tenant shall
have occurred and remain outstanding as of the Closing Date;
(c) The Seller shall be the sole owner of good and marketable title to
the applicable Property free and clear of all liens, encumbrances, restrictions,
conditions and agreements (other than the Permitted Encumbrances and this
Agreement);
(d) There shall be no unsatisfied state or federal tax liens against or
affecting the applicable Seller, or any tax audit of the Seller in process,
which could result in a lien against the Property; and
(e) There shall be no outstanding, unsettled claim against the Seller
arising under any insurance policies in respect of the Seller or the Property
which could result in a lien against the Property.
SECTION 5. CONDITIONS TO SELLER'S OBLIGATION TO CLOSE.
The obligation of the Seller to convey and transfer to the Purchaser
the Property on the applicable Closing Date is subject to the satisfaction or
waiver of the following conditions precedent on and as of such Closing Date:
5.1 Purchase Price. The Purchaser shall deliver to the Seller the
Purchase Price of the Property as provided in Section 3.2.
5.2 Closing Documents. The Purchaser shall have delivered to
the Seller:
(a) Duly executed and acknowledged counterparts of the documents
described in Subsections 4.1(b), (c), (d), (e), (g), (u) and (v);
(b) The Guaranty of Landlord's Obligations duly executed by the
Guarantor;
(c) A certificate of a duly authorized officer of the Purchaser
confirming the continued truth and accuracy of the representations and
warranties of the Purchaser in this Agreement;
(d) Certified copies of applicable resolutions and certificates of
incumbency with respect to the Purchaser, the Guarantor, and such other persons
as the Seller or the Tenant may reasonably require; and
(e) Such other documents, certificates and other instruments as may be
reasonably required to consummate the transaction contemplated hereby.
5.3 Opinions of Counsel. The Seller shall have received a written
opinion from (a) Lowndes, Drosdick, Doster, ▇▇▇▇▇▇ & ▇▇▇▇, P.A., counsel to the
Purchaser (or other counsel reasonably acceptable to Seller, MI and its
counsel), in form and substance reasonably satisfactory to Seller and its
counsel, regarding the good standing and authority of the Purchaser and the
Guarantor, and (b) counsel reasonably acceptable to Seller, MI, and its counsel
regarding the enforceability of this Agreement, the Lease, the Owner Agreement,
the Guaranty of Landlord's Obligations and such other matters with respect to
the transactions contemplated by this Agreement as MI, Seller or Tenant may
reasonably require.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF SELLER.
To induce the Purchaser to enter into this Agreement, the Seller and
MI, represent and warrant to the Purchaser as follows:
6.1 Status and Authority of the Seller. The Seller is, or will be at or
before Closing, a corporation duly organized, validly existing and in corporate
good standing under the laws of its state of incorporation, and has all
requisite power and authority under the laws of such state and its respective
charter documents to enter into and perform its obligations under this Agreement
and to consummate the transactions contemplated hereby. Seller is duly qualified
to transact business and is in good standing in the state in which the Property
is located.
6.2 Status and Authority of MI. MI is a corporation duly organized,
validly existing and in corporate good standing under the laws of its state of
incorporation, and has all requisite power and authority under the laws of such
state and its respective charter documents to enter into and perform its
obligations under this Agreement and to consummate the transactions contemplated
hereby. MI has duly qualified to transact business and is in good standing in
the state in which the Property is located.
6.3 Status and Authority of Tenant. Tenant is, or will be at Closing, a
limited liability company, duly organized, validly existing and in good standing
under the laws of the State of Delaware and duly qualified to do business and in
good standing under the laws of the state in which the Property is located.
6.4 Employees The Seller shall be responsible for payment of all wages
and salaries payable to, and all vacation pay, pension and welfare benefits and
other fringe benefits accrued with respect to all individuals employed by the
Seller at the Property relating to the period prior to the Closing and Tenant
shall be responsible for payment of all wages, salaries and benefits relating to
the period commencing on and from and after the Closing. At no time hereunder,
upon Closing or under the Lease, shall any of the employees at the Property
including employees of any manager thereof, be or be deemed to be the employees
of Purchaser, and upon and after Closing, be or be deemed to be transferred to
Purchaser. If required, the Seller will comply with the notice and other
requirements under the Worker Adjustment Retraining and Notification Act ("WARN
Act"), the Consolidated Omnibus Budget Reconciliation Act ("COBRA") or any
similar state or local legislation with respect to such employee matters, and
such obligation shall survive Closing, notwithstanding anything to the contrary
in the WARN Act. Because Purchaser at no time will be or be deemed to be the
employer of employees at the Property, it is expressly understood and agreed
that Purchaser is not and shall not be responsible or liable, directly or
indirectly, for payment of any benefits, severance liability, compensation, pay
or other obligations, of whatever nature, due or alleged to be due to any
employee at the Property including employees of any manager thereof, or of the
Seller attributable to any time period up to, upon and after Closing. Similarly,
there shall be no union agreements, pension plans, health plans, benefit plans,
deferred compensation plans, bonus plans or vacation plans or similar agreements
for or concerning such employees which shall be binding upon Purchaser.
6.5 Existing Agreements. There are no (or will not be at the Closing)
service contracts, maintenance agreements, leasing commissions or brokerage
agreements, repair contracts, property management contracts, contracts for the
purchase or delivery of labor, services, materials or goods, supplies or
equipment, leases, licensees or occupancy agreements, or similar agreements
entered into by or on behalf of any Seller which will be obligations of
Purchaser after the Closing, other than (i) the Permitted Encumbrances, (ii) the
documents to be assigned to the Purchaser pursuant to the terms hereof, (iii)
the Contracts, (iv) the Lease, (v) the Owner Agreement, and (vi) any other
document or instrument given or entered into in connection with Closing.
6.6 Tax Returns. All tax returns for privilege, gross receipts, excise,
sales and use, personal property and franchise taxes required by law to be filed
by the Seller prior to the date of the Closing will be prepared and duly filed,
prior to the Closing (or after Closing with respect to pre-Closing matters) and
all taxes, if any, shown on such returns or otherwise determined to be due,
together with any interest or penalties thereon, will be paid by Seller prior to
Closing, or allowance made therefor at Closing.
6.7 Action of MI and Seller. MI and Seller have taken all necessary
action to authorize the execution, delivery and performance of this Agreement,
and upon the execution and delivery of any document to be delivered by MI or the
Seller on or prior to each Closing Date, such document shall constitute the
valid and binding obligation and agreement of MI and/or Seller, as applicable,
enforceable against MI and/or Seller, as applicable, as the case may be, in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws of general
application affecting the rights and remedies of creditors and general
principles of equity.
6.8 No Violations of Agreements. Neither the execution, delivery or
performance of this Agreement by the Seller and/or MI, nor compliance with the
terms and provisions hereof, will result in any breach of the terms, conditions
or provisions of, or conflict with or constitute a default under, or result in
the creation of any lien, charge or encumbrance upon the Property pursuant to
the terms of any indenture, mortgage, deed of trust, note, evidence of
indebtedness or any other agreement or instrument by which the Seller and/or MI,
as the case may be, is bound.
6.9 Litigation. Neither Seller nor MI has received written notice of
and, to the Seller's and MI's knowledge, no investigation, action or proceeding
is pending or, to the Seller's and MI's knowledge, threatened, and the Seller
has not received written notice of and, to the Seller's and MI's knowledge, no
investigation looking toward such an action or proceeding has begun, which (a)
questions the validity of this Agreement or any action taken or to be taken
pursuant hereto, or (b) may result in or subject the Property to a material
liability which is not covered by insurance, whether or not Purchaser is
indemnified by Seller and/or MI with respect to the same, or (c) involves
condemnation or eminent domain proceedings against any material part of the
Property.
6.10 Not A Foreign Person. The Seller is not a "foreign person" within
the meaning of Section 1445 of the United States Revenue Code of 1986, as
amended, and the regulations promulgated thereunder.
6.11 Construction Contracts; Mechanics' Liens. At the Closing, there
will be no outstanding contracts made by the Seller for the construction or
repair of any Improvements relating to the Property which have not been fully
paid for or provision for the payment of which has not been made by Seller and
Seller shall discharge and have released of record or bonded all mechanics' or
materialmen's liens, if any, arising from any labor or materials furnished to
such Property prior to the Closing to the extent any such lien is not insured
over by the Title Company or bonded over pursuant to applicable law.
6.12 Permits, Licenses. As of the Closing, there will be in effect all
material licenses (including liquor licenses, if required), permits and other
authorizations necessary for the then current use, occupancy and operation of
the Property, unless failure to obtain any such licenses, permits and other
authorizations is disclosed to Purchaser, and Purchaser waives compliance
herewith in accordance with Section 4.2(b) of this Agreement.
6.13 Hazardous Substances. Except as otherwise disclosed to Purchaser,
including without limitation any matters described in the Environmental Reports,
to the Seller's and MI's knowledge, the Seller, since the date that Seller
acquired title to the Property, has not stored or disposed of (or engaged in the
business of storing or disposing of, or authorized the storage or disposal of)
nor has released nor caused nor authorized the release of any hazardous waste,
contaminants, oil, radioactive or other material on the Property, or any portion
thereof, the removal of which is required or the maintenance of which is
prohibited or penalized by any applicable Federal, state or local statutes,
laws, ordinances, rules or regulations, and which has not as of the Closing Date
been removed from the Property in accordance with such applicable statutes,
laws, ordinances, rules or regulations.
6.14 Insurance. The Seller has received no written notice from any
insurance carrier of defects or inadequacies in the Property which, if
uncorrected, would result in a termination of insurance coverage or a material
increase in the premiums charged therefor.
6.15 Financial Information. Financial information, including, without
limitation, all books and records and financial statements relating to the
Property, which have been provided to Purchaser are true, correct and complete
in all material respects.
6.16 Contracts. Seller has performed all of its obligations under each
Contract to which the Seller is a party or is subject and no fact or
circumstance has occurred, which by itself or with the passage of time or the
giving of notice or both would constitute a default under any such Contract.
Further, to Seller's knowledge, all other parties to such Contracts have
performed all of their obligations thereunder in all material respects and are
not in default thereunder.
6.17 Title to FF&E. The Seller has good and marketable title to the
FF&E described on the FF&E Schedule.
6.18 FF&E. The FF&E Schedule accurately describes in all material
respects the FF&E owned by the Seller and located at the Property.
The representations and warranties made in this Agreement by Seller
and, if applicable, MI, in Section 6.1 through Section 6.10, inclusive, are made
as of the date hereof and shall be deemed remade by the Seller and, if
applicable, MI, as of the Closing Date for the Property the Seller, with the
same force and effect as if made on, and as of, such date; and the
representations and warranties made in this Agreement by Seller and, if
applicable, MI, in Section 6.11 through Section 6.19, inclusive, shall be made
as of the Closing Date, provided, however, that, the Seller shall have the
right, from time to time prior to the Closing Date to modify the representations
and warranties made in Section 6.8 (No Violation of Agreements), Section 6.9
(Litigation) and Section 6.14 (Insurance) as a result of changes in applicable
conditions beyond the control of Seller, by notice to the Purchaser and, in such
event, the representations and warranties shall be deemed modified to the extent
required by such changes, and (a) if Seller and MI agree to indemnify Purchaser
against any loss that may be suffered by Purchaser as a result of such changes,
then Purchaser will be required to close hereunder without any abatement of the
Purchase Price or changes in any other condition, and (b) if Seller and MI elect
not to so indemnify Purchaser, Purchaser shall have the option to either accept
the change and close, or reject the change, in which case Purchaser's obligation
to purchase the Property shall terminate. All representations and warranties
made in this Agreement by the Seller and MI shall survive the Closing for a
period of one year. Any action, suit or proceeding with respect to the truth,
accuracy or completeness of any such representation or warranty shall be
commenced, if at all, on or before the date which is twelve (12) months after
the date of the Closing and, if not commenced on or before such date, thereafter
shall be void and of no force or effect.
Prior to the Closing contemplated by this Agreement, Purchaser will
have had the opportunity to investigate independently all physical aspects of
the Property, and to make all such independent inspections and/or investigations
of the Property that Purchaser deems necessary or desirable including, without
limitation, review of the building permits, certificates of occupancy,
environmental audits and assessments, toxic reports, surveys, investigation of
land use and development rights, development restrictions and conditions that
are or may be imposed by governmental agencies, agreements with associations or
other private parties affecting or concerning the Property, the condition of
title, soils and geological reports, engineering and structural certificates,
tests and third-party reports (if any), governmental agreements and approvals
and architectural plans and site plans. Purchaser represents and warrants that,
in entering into this Agreement, Purchaser has not relied on any representation,
warranty, promise or statement, express or implied, of Seller or MI, or anyone
acting for or on behalf of Seller or MI, other than as expressly set forth in
this Agreement; AND THAT, AS A MATERIAL INDUCEMENT TO THE EXECUTION AND DELIVERY
OF THIS AGREEMENT BY SELLER AND MI, PURCHASER ACKNOWLEDGES THAT THE PROPERTY
WILL, UPON THE ACQUISITION BY PURCHASER OF the PROPERTY, BE IN ITS "AS IS"
CONDITION AND IN ITS "AS IS" STATE OF REPAIR, WITH ALL FAULTS SUBJECT ONLY,
HOWEVER, TO THE EXPRESS COVENANTS, REPRESENTATIONS AND WARRANTIES MADE BY THE
SELLER AND MI FOR THE BENEFIT OF PURCHASER EXPRESSLY SET FORTH IN THIS
AGREEMENT.
Except as otherwise expressly provided in this Agreement or any
documents executed and delivered by Seller or MI to the Purchaser at the
Closing, the Seller and MI disclaim the making of any representations or
warranties, express or implied, regarding the Property or matters affecting the
same, whether made by the Seller or MI, on the Seller's behalf or on MI's
behalf, or otherwise, including, without limitation, the physical condition of
the Property, title to, the boundaries or other survey matters of, the Real
Property, pest control matters, soil conditions, the presence, existence or
absence of hazardous wastes, toxic substances or other environmental matters,
compliance with building, health, safety, land use and zoning laws, regulations
and orders, structural and other engineering characteristics, traffic patterns,
market data, economic conditions or projections, and any other information
pertaining to the Property or the market and physical environments in which they
are located. The Purchaser acknowledges that the Purchaser has entered into this
Agreement with the intention of making and relying upon its own investigation or
that of third parties with respect to the physical, environmental, economic and
legal condition of each Property, except as expressly provided in Section 6.8,
Section 6.9, Section 6.11, Section 6.12, Section 6.13, Section 6.15 and Section
6.17. The Purchaser further acknowledges that it has not received from or on
behalf of the Seller or MI, any accounting, feasibility, marketing, economic,
tax, legal, architectural, engineering, property management or other advice with
respect to this transaction and is relying solely upon the advice of third party
accounting, tax, legal, architectural, engineering, property management and
other advisors.
As used in this Agreement, the phrases "to Seller's knowledge," "to
MI's knowledge" and "to Seller's and MI's knowledge" or words of similar import
shall mean the actual (and not constructive or imputed) knowledge, without
independent investigation or inquiry, of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (and any subsequent
officer of Marriott Senior Living Services, Inc. having direct oversight
responsibility for the transactions contemplated hereby), or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
(and any subsequent finance officer of MI having direct oversight responsibility
for the transactions contemplated hereby), or of an employee of Seller or MI, or
any Affiliated Person as to either, assigned to work at the Property in
connection with construction of the Improvements and/or in connection with the
installment of the FF&E on a full-time basis, if any.
SECTION 7. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
To induce the Seller to enter into this Agreement, the Purchaser and,
if Purchaser is other than CHCLP, CHCLP represents and warrants to the Seller as
follows:
7.1 Status and Authority of the Purchaser. The Purchaser is duly
organized and validly existing under the laws of the jurisdiction in which it
was formed, and has all requisite power and authority under the laws of such
state and under its charter documents to enter into and perform its obligations
under this Agreement and to consummate the transactions contemplated hereby. The
Purchaser is, or will be by the Closing Date, duly qualified and in good
standing in each of the states in which the Property is located.
7.2 Status and Authority of the Guarantors. CHCLP is a limited
partnership duly organized and validly existing under the laws of the State of
Delaware. CHCP is a corporation duly organized and validly existing under the
laws of the State of Maryland. CHCP and CHCLP each has all requisite power and
authority under the laws of the state under whose laws it has organized or
incorporated and under their respective charter documents to enter into and
perform its obligations under this Agreement and to consummate the transactions
contemplated hereby. CHCLP is, or will be by the Closing Date, duly qualified
and in good standing in each of the states in which the Property is located.
7.3 Action of the Purchaser. The Purchaser has taken all necessary
action to authorize the execution, delivery and performance of this Agreement,
and upon the execution and delivery of any document to be delivered by the
Purchaser on or prior to each Closing Date, such document shall constitute the
valid and binding obligation and agreement of the Purchaser, enforceable against
the Purchaser in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws of
general application affecting the rights and remedies of creditors and general
principles of equity.
7.4 No Violations of Agreements. Neither the execution, delivery or
performance of this Agreement by the Purchaser, nor compliance with the terms
and provisions hereof, will result in any breach of the terms, conditions or
provisions of, or conflict with or constitute a default under, or result in the
creation of any lien, charge or encumbrance upon any property or assets of the
Purchaser pursuant to the terms of any indenture, mortgage, deed of trust, note,
evidence of indebtedness or any other agreement or instrument by which the
Purchaser is bound.
7.5 Litigation. Purchaser has received no written notice of and, to
Purchaser's knowledge, no investigation, action or proceeding is pending and, to
Purchaser's knowledge, no action or proceeding is threatened and Purchaser has
received no notice of, and to Purchaser's knowledge, no investigation looking
toward such an action or proceeding has begun, which questions the validity of
this Agreement or any action taken or to be taken pursuant hereto.
The representations and warranties made in this Agreement by the
Purchaser are made as of the date hereof and shall be deemed remade by the
Purchaser as of the Closing Date with the same force and effect as if made on,
and as of, such date. All representations and warranties made in this Agreement
by the Purchaser shall survive the Closing for a period of one year. Any action,
suit or proceeding with respect to the truth, accuracy or completeness of any
such representation or warranty shall be commenced and served, if at all, on or
before the date which is twelve (12) months after the date of the Closing and,
if not commenced on or before such date, thereafter shall be void and of no
force or effect.
As used in this Agreement, the phrase "to Purchaser's knowledge" or
words of similar import shall mean the actual (and not constructive or imputed)
knowledge, without independent investigation or inquiry, of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇.
SECTION 8. COVENANTS OF THE SELLER.
The Seller and MI hereby covenant with the Purchaser as follows:
8.1 Compliance with Laws. From the date of this Agreement to the
Closing Date, Seller shall use commercially reasonable efforts to comply in all
material respects with (i) all laws, regulations and other requirements
affecting the Property, from time to time applicable, of every governmental body
having jurisdiction of the Property or the use or occupancy of any Improvements
located thereon and (ii) all terms, covenants and conditions of instruments of
record affecting the Property.
8.2 Correction of Defects. Seller shall correct, at Seller's or MI's
cost, all defects in the Improvements that are discovered and disclosed by or to
the Seller within one year following the acceptance of the Improvements by the
Seller from the general contractor for such Improvements. At Closing, Seller and
MI shall, at Purchaser's request, certify the outside date of such one-year
warranty period to Purchaser. The Purchaser agrees to cooperate with the Seller,
MI and/or the Tenant in enforcing any applicable warranties or guaranties with
respect to such defects. Seller and/or Tenant shall have the exclusive right and
obligation to pursue the aforementioned rights and remedies; however, in the
event that Seller and/or Tenant fails to exercise such rights and remedies,
after ten (10) days from notice by Purchaser to Seller of such failure to
exercise such rights and remedies, Purchaser shall then have the right to pursue
the same. The provisions of this Section 8.2 shall survive any Closing under
this Agreement.
8.3 Insurance. The Seller shall, at no expense to the Seller,
reasonably cooperate with Purchaser in connection with Purchaser's obtaining any
insurance which may be required to be maintained by Purchaser under the terms of
the Lease for the Property following the Closing.
8.4 Material Defects in Structural Systems. If, to Seller's or MI's
knowledge, a material construction defect or a material design defect in the
structural system of the Improvements exists at any time prior to Closing,
Seller or MI shall disclose the same to Purchaser, provided that neither Seller
nor MI shall have any obligation to correct such disclosed defects if the cost
to correct such defects exceeds $250,000. If such cost exceeds $250,000 and
Seller and MI elect not to correct, then Purchaser's sole remedy shall be to
terminate this Agreement, in which event this Agreement shall terminate and be
of no further force or effect and Seller shall reimburse to Purchaser the
Purchaser's expenses incurred in respect of the Property, not to exceed $5,000
(and direct Escrow Agent to refund to Purchaser the Deposit as provided in
Section 10.3).
SECTION 9. APPORTIONMENTS.
9.1 Apportionments. Representatives of the Purchaser, Tenant and the
Seller shall make and perform any and all of the adjustments and apportionments
which are appropriate and usual for a transaction of this nature, taking into
account the applicable provisions of the Lease and this Agreement. The
adjustments hereunder shall be calculated or paid in an amount based upon a fair
and reasonable estimated accounting performed and agreed to by representatives
of the Seller and the Purchaser at the applicable Closing. Subsequent final
adjustments and payments shall be made in cash or other immediately available
funds as soon as practicable after the Closing Date, and in any event within
ninety (90) days after the Closing Date, based upon an agreed accounting
performed by representatives of the Seller, Tenant and the Purchaser. In the
event the parties have not agreed with respect to the adjustments required to be
made pursuant to this Section 9.1 within such ninety-day period, upon
application by either party, a certified public accountant reasonably acceptable
to the Purchaser and the Seller shall determine any such adjustments which have
not theretofore been agreed to between the Seller and the Purchaser. The charges
of such accountant shall be borne fifty percent (50%) by the Seller and fifty
percent (50%) by the Purchaser. Seller shall pay the entire amount of the
calendar year 1999 real estate taxes after the ▇▇▇▇ for such real estate taxes
is received after the Closing Date and prior to the date such real estate taxes
become delinquent. Seller shall pay (on or before the due date) that portion of
the calendar year 2000 real estate taxes allocable (on a daily basis) to the
period commencing on January 1, 2000 and ending on the Closing Date and Tenant
shall, pursuant to the Lease, pay (on or before the due date) that portion of
the calendar year 2000 real estate taxes allocable (on a daily basis) to the
period commencing on the day after the Closing Date and ending on December 31,
2000.
9.2 Closing Costs.
(a) In the event that Closing is consummated hereunder, Seller shall
pay all Third-Party Costs (hereinafter defined) and Transfer Taxes (hereinafter
defined) to the extent that the aggregate amount of all Third-Party Costs and
Transfer Taxes does not exceed Sixty Eight Thousand Nine Hundred Dollars
($68,900) and Purchaser shall pay any Third-Party Costs and Transfer Taxes in
excess of Sixty Eight Thousand Nine Hundred Dollars ($68,900). As used herein,
the term "Third-Party Costs" include but shall not be limited to (i) the
Environmental Reports; (ii) the Existing Survey; (iii) premiums for the title
insurance policies to be provided at the Closing pursuant to Section 2.3 and
Section 4.3(a); (iv) any closing or escrow charges or other expenses payable to
the Title Company conducting the Closing; (v) the third party MAI property
appraisal of the Property obtained by Purchaser; (vi) the third party market
assessment report obtained by Purchaser; (vii) the third party architectural and
engineering inspection report of the Property obtained by Purchaser; and (viii)
the third party audited Special Purpose Financial Statement for the Property
obtained by Purchaser. All Third-Party Costs shall be advanced by Purchaser
prior to Closing and in the event that Closing is not consummated hereunder,
Purchaser shall pay the entire amount of the Third-Party Costs; provided,
however, that in the event that this Agreement is terminated by Purchaser
pursuant to Section 2.3 or Section 8.4, Seller shall pay (or reimburse Purchaser
for) such Third-Party Costs in an amount not exceeding Five Thousand Dollars
($5,000).
(b) As used herein, the term "Transfer Taxes" shall mean any transfer,
sales, use, recordation or other similar taxes, impositions or expenses incurred
in connection with the Closing of the transactions contemplated hereby and/or
the recordation or filing of any documents or instruments in connection
therewith or the sale, transfer or conveyance of the Property from Seller to
Purchaser or the lease of the Property from Purchaser to Tenant; provided
Transfer Taxes shall not include, and Seller shall be solely responsible for any
taxes due in respect of its income, net worth or capital, if any, and any
privilege, sales and occupancy taxes, due or owing to any governmental entity in
connection with the operation of the Property for any period of time prior to
Closing, and Purchaser or Tenant, as applicable, shall be solely responsible for
all such taxes for any period from and after Closing, and provided further that
any income tax arising as a result of the sale and transfer of the Property by
Seller to Purchaser shall be the sole responsibility of Seller and any income
tax arising as a result of the lease of the Property from Purchaser to Tenant
shall be the sole responsibility of Tenant or Purchaser, as applicable.
(c) Except as expressly provided in this Section 9, Seller and
Purchaser shall each pay their own separate costs and expenses incurred in
connection with the transactions contemplated hereby, including the fees and
expenses of counsel in connection with the preparation and negotiation of this
Agreement, the Lease and all other documents and instruments in connection
therewith and in consummating any and all of the transactions contemplated
hereby and thereby.
(d) The obligations of the parties under this Section 9 shall survive
the Closings.
SECTION 10. DEFAULT.
10.1 Default by the Seller. If the Seller or MI shall have made any
representation or warranty herein which shall be untrue in any material respect
when made or updated as herein provided, or if the Seller or MI shall fail to
perform any of the material covenants and agreements contained herein and such
condition or failure continues for a period of ten (10) days (or such additional
period as may be reasonably required to effectuate a cure of the same) after
notice thereof from the Purchaser, the Purchaser may terminate this Agreement
and Seller shall reimburse to Purchaser the Purchaser's expenses incurred in
respect of the Property, not to exceed $30,000 (and direct Escrow Agent to
refund to Purchaser the Deposit as provided in Section 10.3), and/or the
Purchaser may pursue any and all remedies available to it at law or in equity,
including, but not limited to, a suit for specific performance or other
equitable relief; provided, however, that in such event (x) neither Seller nor
MI shall be liable for (and Purchaser hereby agrees that it will not commence or
prosecute any action for) consequential or punitive or exemplary damages and (y)
the aggregate liability of the Seller or MI under this Agreement shall not
exceed an amount equal to One Hundred Thousand Dollars ($100,000) plus the
reasonable attorneys' fees and expenses incurred by Purchaser in enforcing the
Agreement against Seller and/or MI in respect of Seller's or MI's default. It is
understood and agreed that for purposes of this Section 10.1, if a default
results from a false representation or warranty, such default shall be deemed
cured if the events, conditions, acts or omissions giving rise to the falsehood
are cured within the applicable cure period even though, as a technical matter,
such representation or warranty was false as of the date actually made.
10.2 DEFAULT BY THE PURCHASER. IF THE PURCHASER SHALL HAVE MADE ANY
REPRESENTATION OR WARRANTY HEREIN WHICH SHALL BE UNTRUE OR MISLEADING IN ANY
MATERIAL RESPECT OR IF THE PURCHASER SHALL FAIL TO PERFORM ANY OF THE COVENANTS
AND AGREEMENTS CONTAINED HEREIN AND SUCH CONDITION OR FAILURE SHALL CONTINUE FOR
A PERIOD OF TEN (10) DAYS (OR SUCH ADDITIONAL PERIOD AS MAY BE REASONABLY
REQUIRED TO EFFECTUATE A CURE OF THE SAME; PROVIDED THAT NO SUCH EXTENSION OF
TIME SHALL APPLY TO PURCHASER'S FAILURE TO PAY THE PURCHASE PRICE AT CLOSING OR
OTHERWISE OPERATE TO EXTEND THE CLOSING DATE) AFTER NOTICE THEREOF FROM THE
SELLER, THE SELLER MAY, AS ITS SOLE AND EXCLUSIVE REMEDY, AT LAW, OR IN EQUITY,
TERMINATE THIS AGREEMENT, WHEREUPON, THE PURCHASER SHALL PAY TO THE SELLER, AS
LIQUIDATED DAMAGES AND NOT AS A PENALTY, THE SUM OF ONE HUNDRED THOUSAND DOLLARS
($100,000) (the "LIQUIDATED DAMAGES AMOUNT") PLUS THE REASONABLE ATTORNEYS' FEES
AND EXPENSES INCURRED BY SELLER IN ENFORCING THE AGREEMENT AGAINST PURCHASER IN
RESPECT OF PURCHASER'S DEFAULT.
------------------------------------------------------------ ---------------------------------------------------------
PURCHASER'S INITIALS SELLER'S INITIALS
------------------------------------------------------------ ---------------------------------------------------------
------------------------------------------------------------ ---------------------------------------------------------
----------------------------- -------------------------------------
CNL HEALTHCARE MARRIOTT SENIOR LIVING
PARTNERS, LP SERVICES, INC.
--------------------------------------------------------
MARRIOTT INTERNATIONAL, INC.
------------------------------------------------------------ ---------------------------------------------------------
It is understood and agreed that for purposes of this Section 10.2, if
a default results from a false representation or warranty, such default shall be
deemed cured if the events, conditions, acts or omissions giving rise to the
falsehood are cured within the applicable cure period even though, as a
technical matter, such representation or warranty was false as of the date
actually made.
10.3 Purchaser's Deposit. In order to secure Purchaser's performance
hereunder, including, without limitation, its obligation to pay liquidated
damages as provided in Section 10.2, Purchaser has heretofore provided, or will
provide immediately upon the execution and delivery of this Agreement, a cash
deposit in the amount of the Liquidated Damages Amount (said deposit is herein
referred to as the "Deposit") to the Escrow Agent. The Escrow Agent shall hold
and disburse the Deposit pursuant to the terms of the Escrow Agreement entered
into among Seller, Purchaser and Escrow Agent of even date herewith, a true copy
of which is attached hereto as Schedule P (the "Escrow Agreement").
If Purchaser defaults on its obligations hereunder such that Seller
becomes entitled to the Liquidated Damages Amount as provided in Section 10.2,
Seller shall be immediately entitled to the entire Deposit as such liquidated
damages. If Purchaser elects to terminate this Agreement pursuant to Sections
2.3 or 8.4, or if Seller elects to terminate this Agreement pursuant to the
provisions of Section 3.3, Purchaser shall be entitled to the prompt return of
the Deposit and the parties shall so direct the Escrow Agent to pay the Deposit
to Purchaser and thereupon shall have no further obligations hereunder in
respect of the Property except any obligations which expressly survive a
termination of this Agreement. In the event Seller becomes entitled to the
Deposit hereunder, the Escrow Agent shall promptly disburse the Deposit to
Seller in the manner provided for in the Escrow Agreement.
The Deposit shall be held by Escrow Agent in an interest-bearing
account and Escrow Agent shall be authorized to deliver the interest accrued
thereon from time to time to Purchaser. In the event that Closing is consummated
hereunder, the Deposit shall be returned to Purchaser promptly following the
occurrence of the Closing.
SECTION 11. MISCELLANEOUS.
11.1 Agreement to Indemnify.
(a) Subject to any express provisions of this Agreement to the
contrary, from and after the Closing, (i) the Seller and MI shall indemnify,
defend and hold harmless the Purchaser from and against any and all obligations,
claims, losses, damages, liabilities, and expenses (including, without
limitation, reasonable attorneys' and accountants' fees and disbursements)
arising out of (v) any termination of employment of employees at the Property
prior to or upon the Closing resulting from the termination of employment of
such employees by Seller or its operator and/or the failure of Tenant to hire
such employees (including, without limitation, severance pay, wrongful discharge
claims, and claims and/or fines under federal, state or local statutes or
regulations, including without limitation the Worker Adjustment and Retraining
Notification Act), (w) the employment of such individuals prior to the Closing
Date, including, without limitation, employment-related claims; COBRA-related
claims; disability claims; vacation; sick leave; wages; salaries; payments due
(or allocable) to any medical, pension, and health and welfare plans, and any
other employee benefit plan established for the employees at the Property; and
employee-related tax obligations such as, but not limited to, social security
and unemployment taxes accrued as of the Closing Date, (x) events, acts, or
omissions of the Seller that occurred in connection with its ownership or
operation of the Property prior to the Closing Date or obligations accruing
prior to the Closing Date under any Contract of Seller (except to the extent of
any adjustment made in respect of such Contract at Closing), (y) any material
breach of a representation or warranty made by Seller and MI under Section 6 (as
such representations and warranties may be modified pursuant to said Section 6
and subject to the one-year limitation period set forth therein), or (z) any
claim against Purchaser for damage to property of others or injury to or death
of any person or any debts or obligations of or against Seller and arising out
of any event occurring on or about or in connection with the Property or any
portion thereof, at any time or times prior to the Closing Date, and (ii) the
Purchaser and, if Purchaser is not CHCLP, CHCLP shall indemnify, defend and hold
harmless the Seller from and against any and all obligations, claims, losses,
damages, liabilities and expenses (including, without limitation, reasonable
attorneys' and accountants' fees and disbursements) arising out of (x) events,
acts, or omissions of the Purchaser that occur in connection with its ownership
or operation of the Property from and after the Closing Date or obligations
accruing from and after the Closing Date under any Contract (except to the
extent of any adjustment made in respect of such Contract at Closing), (y) any
material breach of a representation or warranty made by Purchaser and, if
Purchaser is not CHCLP, CHCLP under Section 7 (and subject to the one year
limitation period set forth therein), or (z) any claim against Seller for damage
to property of others or injury to or death of any person or any claims for any
debts or obligations of or against Seller and arising out of any event occurring
on or about or in connection with the Property or any portion thereof, at any
time or times from and after the Closing Date. The provisions of this Section
11.1 shall not apply to any liabilities or obligations with respect to hazardous
substances, the liabilities of the parties with respect thereto being governed
by the representation and warranty of Seller set forth in Section 6.13.
(b) Whenever it is provided in this Agreement that an obligation will
continue after Closing as an obligation of Purchaser or be assumed by Purchaser
after the Closing, the Purchaser and, if Purchaser is not CHCLP, CHCLP shall be
deemed to have also agreed to indemnify and hold harmless the Seller and MI and
their respective successors and assigns from and against all claims, losses,
damages, liabilities, costs, and expenses (including, without limitation,
reasonable attorneys' and accountants' fees and expenses) arising from any
failure of the Purchaser to perform the obligation so continued or assumed after
the Closing (but not with respect to any act or omission which occurred prior to
Closing).
(c) Whenever either party shall learn through the filing of a claim or
the commencement of a proceeding or otherwise of the existence of any liability
for which the other party is or may be responsible under this Agreement, the
party learning of such liability shall notify the other party promptly and
furnish such copies of documents (and make originals thereof available) and such
other information as such party may have that may be used or useful in the
defense of such claims and shall afford said other party full opportunity to
defend the same in the name of such party and shall generally cooperate with
said other party in the defense of any such claim.
(d) The provisions of this Section 11.1 shall survive the Closing
hereunder and the termination of this Agreement. All representations and
warranties made in this Agreement shall survive the Closing for a period of one
year. Any action, suit or proceeding with respect to the truth, accuracy or
completeness of any such representation or warranty shall be commenced, if at
all, on or before the date which is twelve (12) months after the date of the
Closing and served promptly (but in no event later than sixty (60) days after
commencement) and, if not commenced on or before such date and so served,
thereafter shall be void and of no force or effect.
11.2 Brokerage Commissions. Each of the parties hereto represents to
the other party that it dealt with no broker, finder or like agent in connection
with this Agreement or the transactions contemplated hereby, and that it
reasonably believes that there is no basis for any other person or entity to
claim a commission or other compensation for bringing about this Agreement or
the transactions contemplated hereby. The Seller shall indemnify and hold
harmless the Purchaser and its successors and assigns from and against any loss,
liability or expense, including, reasonable attorneys' fees, arising out of any
claim or claims for commissions or other compensation for bringing about this
Agreement or the transactions contemplated hereby made by any broker, finder or
like agent, if such claim or claims are based in whole or in part on dealings
with the Seller. The Purchaser shall indemnify and hold harmless the Seller and
its successors and assigns from and against any loss, liability or expense,
including, reasonable attorneys' fees, arising out of any claim or claims for
commissions or other compensation for bringing about this Agreement or the
transactions contemplated hereby made by any broker, finder or like agent, if
such claim or claims are based in whole or in part on dealings with the
Purchaser. Nothing contained in this section shall be deemed to create any
rights in any third party. The provisions of this Section 11.2 shall survive the
Closing hereunder and any termination of this Agreement.
11.3 Publicity. The parties agree that no party shall, with respect to
this Agreement and the transactions contemplated hereby, contact or conduct
negotiations with public officials, make any public pronouncements, issue press
releases or otherwise furnish information regarding this Agreement or the
transactions contemplated hereby to any third party without the consent of the
other party, which consent shall not be unreasonably withheld, conditioned or
delayed, except as may be required by law or as may be reasonably necessary, on
a confidential basis, to inform any rating agencies, potential sources of
financing, financial analysts, or to entities involved with a sale of a
controlling interest in the Seller, the Purchaser or any of their affiliates or
to receive legal, accounting and/or tax advice; provided, however, that, if such
information is required to be disclosed by law, the party so disclosing the
information will use reasonable efforts to give notice to the other party as
soon as such party learns that it must make such disclosure.
11.4 Notices.
(a) Any and all notices, demands, consents, approvals, offers,
elections and other communications required or permitted under this Agreement
shall be deemed adequately given if in writing and the same shall be delivered
either in hand, by telecopier with written acknowledgment of receipt, or by mail
or Federal Express or similar expedited commercial carrier, addressed to the
recipient of the notice, postpaid and registered or certified with return
receipt requested (if by mail), or with all freight charges prepaid (if by
Federal Express or similar carrier).
(b) All notices required or permitted to be sent hereunder shall be
deemed to have been given for all purposes of this Agreement upon the date of
acknowledged receipt, in the case of a notice by telecopier, and, in all other
cases, upon the date of receipt or refusal, except that whenever under this
Agreement a notice is either received on a day which is not a Business Day or is
required to be delivered on or before a specific day which is not a Business
Day, the day of receipt or required delivery shall automatically be extended to
the next Business Day.
(c) All such notices shall be addressed,
if to the Seller to:
Marriott International, Inc
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇. 52/924.94
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Treasury
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Marriott International, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇. 52/923.24
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esquire
Law Department
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
and
Arent Fox ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇, PLLC
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
If to the Purchaser, to:
CNL Health Care Partners, LP
CNL Center at City Commons
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ or Chief Operating Officer
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Lowndes, Drosdick, Doster, ▇▇▇▇▇▇ & ▇▇▇▇, P.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Post Office Box 2809
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
If to MI:
Marriott International, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇. 52/924.04
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Treasury
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Marriott International, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇. 52/923.24
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esquire
Law Department
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
and
Arent Fox ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇, PLLC
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
(d) By notice given as herein provided, the parties hereto and their
respective successors and assigns shall have the right from time to time and at
any time during the term of this Agreement to change their respective addresses
effective upon receipt by the other parties of such notice and each shall have
the right to specify as its address any other address within the United States
of America.
11.5 Waivers, Etc. Any waiver of any term or condition of this
Agreement, or of the breach of any covenant, representation or warranty
contained herein, in any one instance, shall not operate as or be deemed to be
or construed as a further or continuing waiver of any other breach of such term,
condition, covenant, representation or warranty or any other term, condition,
covenant, representation or warranty, nor shall any failure at any time or times
to enforce or require performance of any provision hereof operate as a waiver of
or affect in any manner such party's right at a later time to enforce or require
performance of such provision or any other provision hereof. This Agreement may
not be amended, nor shall any waiver, change, modification, consent or discharge
be effected, except by an instrument in writing executed by or on behalf of the
party against whom enforcement of any amendment, waiver, change, modification,
consent or discharge is sought.
11.6 Assignment; Successors and Assigns. This Agreement and all rights
and obligations hereunder shall not be assignable by any party without the
written consent of the other party, except that the Purchaser may assign this
Agreement to any entity wholly owned, directly or indirectly, by CHCLP provided,
however, that, in the event this Agreement shall be assigned to any entity
wholly owned, directly or indirectly, by CHCLP, CHCLP shall remain fully and
primarily liable for the obligations of the "Purchaser" hereunder. This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and permitted assigns. This Agreement is
not intended and shall not be construed to create any rights in or to be
enforceable in any part by any other persons.
11.7 Severability. If any provision of this Agreement shall be held or
deemed to be, or shall in fact be, invalid, inoperative or unenforceable as
applied to any particular case in any jurisdiction or jurisdictions, or in all
jurisdictions or in all cases, because of the conflict of any provision with any
constitution or statute or rule of public policy or for any other reason, such
circumstance shall not have the effect of rendering the provision or provisions
in question invalid, inoperative or unenforceable in any other jurisdiction or
in any other case or circumstance or of rendering any other provision or
provisions herein contained invalid, inoperative or unenforceable to the extent
that such other provisions are not themselves actually in conflict with such
constitution, statute or rule of public policy, but this Agreement shall be
reformed and construed in any such jurisdiction or case as if such invalid,
inoperative or unenforceable provision had never been contained herein and such
provision reformed so that it would be valid, operative and enforceable to the
maximum extent permitted in such jurisdiction or in such case.
11.8 Counterparts, Etc. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement
constitutes the entire agreement of the parties hereto with respect to the
subject matter hereof and shall supersede and take the place of any other
instruments purporting to be an agreement of the parties hereto relating to the
subject matter hereof. This Agreement may not be amended or modified in any
respect other than by the written agreement of all of the parties hereto.
11.9 Governing Law. This Agreement shall be interpreted,
construed, applied and enforced in
accordance with the laws of the State of Maryland.
To the maximum extent permitted by applicable law, any action to
enforce, arising out of, or relating in any way to, any of the provisions of
this Agreement may be brought and prosecuted in such court or courts located in
the State of Maryland as is provided by law; and the parties consent to the
jurisdiction of said court or courts located in the State of Maryland and to
service of process by registered mail, return receipt requested, or by any other
manner provided by law.
11.10 Performance on Business Days. In the event the date on which
performance or payment of any obligation of a party required hereunder is other
than a Business Day, the time for payment or performance shall automatically be
extended to the first Business Day following such date.
11.11 Attorneys' Fees. If any lawsuit or arbitration or other legal
proceeding arises in connection with the interpretation or enforcement of this
Agreement, the prevailing party therein shall be entitled to receive from the
other party the prevailing party's costs and expenses, including reasonable
attorneys' fees, incurred in connection therewith, in preparation therefor and
on appeal therefrom, which amounts shall be included in any judgment therein.
11.12 Relationship. Nothing herein contained shall be deemed or
construed by the parties hereto, nor by any third party, as creating the
relationship of principal and agent or of partnership or joint venture between
the parties hereto, it being understood and agreed that no provision contained
herein, nor any acts of the parties hereto shall be deemed to create the
relationship between the parties hereto other than the relationship of seller
and purchaser.
11.13 Section and Other Headings. The headings contained in
this Agreement are for reference purposes only and shall not in any way
affect the meaning or interpretation of this Agreement
11.14 Disclosure. From and after Closing and at the written request of
Purchaser, Seller shall provide such financial statements in respect of the
Seller's operations relating to the Property from the date of Seller's
commencement of business to the date of the Closing to the extent such financial
statements are required by applicable securities laws and regulations and the
SEC's interpretation thereof; provided, however, that (i) Seller reserves the
right, in good faith, to challenge, and require Purchaser to use commercially
reasonable efforts to challenge, any assertion by the SEC, any other applicable
regulatory authority, or Purchaser's independent public accountants that
applicable law or regulations require the provision of such financial
statements, (ii) Purchaser shall not, without Seller's consent (which consent
shall not be unreasonably withheld, delayed or conditioned), acquiesce to any
such challenged assertion until Purchaser has exhausted all reasonable available
avenues of administrative review, and (iii) Purchaser shall consult with Seller
in pursuing any such challenge and will allow Seller to participate therein if
and to the extent that Seller so elects. Any and all costs and expenses incurred
by Seller, including without limitation reasonable attorneys fees and expenses,
in connection with providing such financial statements to Purchaser or in
connection with any challenge to an SEC assertion (including Seller's
consultation or participation with Purchaser in respect of same) shall be
reimbursed to Seller by Purchaser within ten (10) days following written demand
by Seller.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE]
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as a sealed instrument as of the date first above written.
SELLER:
MARRIOTT SENIOR LIVING SERVICES, INC.
By:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Agent
PURCHASER:
CNL HEALTH CARE PARTNERS, L.P.
By: CNL Health Care GP Corp.,
a Delaware corporation
its general partner
By:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Executive Vice President
MI:
MARRIOTT INTERNATIONAL, INC.
By:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Agent
The undersigned, CNL Health Care Properties, Inc., joins herein for the purpose
of evidencing its agreement to enter into and deliver the Guaranty of Landlord's
Obligations pursuant to the terms of the foregoing Agreement.
CNL HEALTH CARE PROPERTIES, INC.
By: ___________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Executive Vice President
and Chief Operating Officer
The undersigned, First American Title Insurance Company, joins herein
for the purpose of evidencing its agreement to enter into and deliver the Escrow
Agreement, attached hereto at Schedule P.
FIRST AMERICAN TITLE
INSURANCE COMPANY
By: _________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
Schedule A
Purchase Price
Thirteen Million Eight Hundred Forty-Eight Thousand Nine Hundred
Dollars ($13,848,900)
Schedule B
Guaranty
Schedule C
Lease Agreement
Schedule D
Limited Rent Guaranty
Schedule E
Membership Interest Pledge Agreement
Schedule F
Form of Owner Agreement
Schedule G
Permitted Encumbrances
Schedule H
Plans and Specifications
Schedule I
Legal Description of the Property
Schedule J
Owner's Policy Commitment
Schedule K
Leasehold Policy Commitment
Schedule L
Survey
M-2
Schedule M
Form of Architect's Certificate
ARCHITECT'S CERTIFICATE
__________________, 2000
CNL Health Care Partners, LP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies/Gentlemen:
We are the architects for _________________ in connection with the
construction of the project known as ___________________ located at
______________________________ County, _____________ (hereinafter referred to as
the "Project"). In this capacity, we hereby certify to you as follows:
1. We are duly licensed architects under the laws of the State of
Illinois.
2. The undersigned has prepared or is familiar with the plans for the
Project described as follows:
Job No. 9715
Drawing Nos. ___________________________________
Dated: August 29, 1997
and related specifications, addendum and change orders
(the "Plans and Specifications").
3. Based on our limited (12) site visits and observations of the
Project and to the best of our information, professional
knowledge and belief, the Project has been substantially
completed in accordance with the Plans and Specifications.
4. The Plans and Specifications have been prepared in accordance
with (i) applicable local building and zoning codes and state
building codes, and (ii) all restrictive covenants of record
applicable to the Project, in effect at the time of design or
known to us during construction. The elevation of all slabs
for the project and the height of the improvements, as set
forth in the Plans and Specifications, meet the applicable
requirements of building permits for the same. The Plans and
Specifications have been designed in accordance with the
recommendations contained in applicable soils reports,
compaction studies or soil borings tests.
5. The Project has been designed such that, if properly operated,
it will not result in the direct or indirect emission into the
atmosphere of any substance (other than motor vehicle
exhausts, steam, water vapor and the emissions from natural
gas or electric comfort heating, ventilation and air
conditioning systems).
6. The Project has been designed such that, if properly operated,
it will not result in the direct or indirect discharge of
pollutants into the waters of the State in which the Project
is located (other than contributions to the sanitary sewer
system serving the Project, provided, however, the foregoing
is in compliance with all applicable governmental regulations
and no further consents or approvals are required therefor).
7. The Project is substantially free of architectural barriers
and is otherwise in substantial compliance with the
requirements of applicable federal, state and local laws,
statutes and ordinances relating to accessibility by persons
with disabilities, including, without limitation, the
Americans With Disabilities Act and the respective regulations
promulgated thereunder. Notwithstanding the foregoing,
Marriott and the architect have differing opinions on the
interpretation and application of ADA Law. We followed
Marriott's direction in those items. The project was designed,
to the best of our knowledge, to comply with the Illinois
Accessibility Code, April 24, 1997 Edition.
8. We have been informed that the real property upon which the
Project is located is currently zoned ___________ under
applicable zoning ordinances of ______________. We have
examined all applicable materials relative to the types of
restrictions and requirements which relate to such zoning
classifications. The Project complies in all respects with
such zoning classification.
9. This letter and certificate shall be binding upon the
undersigned and its successors and assigns, and shall inure to
the benefit of the addressees and their respective successors
and assigns.
--------------------------------
By: ____________________________
Schedule M-1
Form of Marriott's Architect Certificate
To: CNL Health Care Properties, Inc., as purchaser (together with
its successors and assigns "CNL"
From: Marriott International Design and Construction Services, Inc.
Date:
Re:
As an inducement to CNL to acquire the above referenced property, we do hereby
certify to CNL that Marriott International Design and Construction Services,
Inc., has received an Architect's Certificate (a copy of which is attached
hereto as Exhibit A) from the architect of record for the above referenced
property, which certifies that the plans and specifications [prepared by the
architect/reviewed by the architect] for construction of the above referenced
property comply with all applicable requirements of all governmental authorities
having jurisdiction over the improvements located on the above referenced
property, including without limitation, all applicable zoning laws, ordinances,
rules, regulations and restrictions (but excluding any such ordinances, rules,
regulations and restrictions relating to environmental matters) and that, to the
best of the architect's knowledge, the above referenced property was built in
substantial compliance with said plans, specifications and drawings. In
addition, I hereby certify that to the best of my knowledge, the above
referenced property was built in substantial compliance with the plans,
specifications, and drawings.
Marriott International Design and Construction Services, Inc.
By: ____________________________
Project Director
N-2
Schedule N
Form of Engineer's Certificate
CIVIL ENGINEER'S CERTIFICATE
March 21, 2000
CNL Health Care Partners, LP
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▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies/Gentlemen:
We are the civil engineers for Marriott International, Inc. in
connection with the construction of a the project known as Brighton Gardens
located at Orland Park, Illinois (hereinafter referred to as the "Project"). In
this capacity, we hereby state to the best of our knowledge and belief to you as
follows:
1. We are duly licensed civil engineers under the laws of the State of
Illinois.
2. There are no civil engineering permits or approvals of any
governmental authority or public agency required for the
Project which have not been obtained, issued or granted and
which do not, as of the date of the engineering construction
plans consisting of five (5) sheets prepared by our office
under Job No. 1247 dated April 18, 1997; latest revision June
24, 1998.
3. All sewage and other waste waters from the Project are
disposed of by a connection to the Orland Park sanitary sewer
system.
4. The construction of the Project does not involve the dredging
of materials from or the filling of materials in the waters of
the State of Illinois or the United States. Potable water has
not been appropriated from any natural surface or subsurface
source, but rather has been and will be supplied by Orland
Park.
5. All stormwater drainage at the Project is retained on-site or
discharged into existing public rights-of-way or stormwater
drainage easements maintained by Marriott International, Inc.
6. Our office did not perform construction observation or
management services, and therefore cannot state whether the
project was constructed in accordance with the approved
engineering and whether all permits, etc., are still in force
and effect.
7. This letter and certificate shall be binding upon the
undersigned and its successors and assigns, and shall inure to
the benefit of the addressees and their respective successors
and assigns.
----------------------------------
By: ______________________________
Schedule N-1
Form of Marriott's Engineer Certificate
To: CNL Health Care Properties, Inc., as purchaser (together with
its successors and assigns ("CNL")
From: Marriott International Design and Construction Services, Inc.
Date:
Re:
As an inducement to CNL to acquire the above referenced property, we do hereby
certify to CNL that an engineer duly registered under the laws and applicable
regulations of the State of [insert name] prepared the plans and specifications
for construction of the above referenced property. And to the best of my
knowledge those plans and specifications comply with all applicable requirements
of all governmental authorities having jurisdiction over the improvements
located on the above referenced property, including without limitation, all
applicable zoning laws, ordinances, rules, regulations and restrictions (but
excluding any such ordinances, rules, regulations and restrictions relating to
environmental matters). In addition, we hereby certify that to the best of our
knowledge, the above referenced property was built in substantial compliance
with the plans, specifications, and drawings.
Marriott International Design and Construction Services, Inc.
By: ______________________
Project Director
Schedule O
Operating Agreement
Schedule P
Escrow Agreement
Schedule Q
Environmental Report
Schedule R
FF&E SCHEDULE