EXHIBIT 2.1
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ASSET PURCHASE AGREEMENT
Dated as of December 28, 2001
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ASSET PURCHASE AGREEMENT
TABLE OF CONTENTS
Article I. DEFINITIONS........................................................................................3
Section 1.1. Definitions.....................................................................................3
Section 1.2. Interpretation..................................................................................6
Article II. SALE AND PURCHASE OF ACQUIRED ASSETS...............................................................7
Section 2.1. Purchase and Sale...............................................................................7
Section 2.2. Acquired Assets and Excluded Assets.............................................................7
Section 2.3. Assumption of Certain Liabilities and Obligations; Adjustments..................................9
Article III. PURCHASE PRICE....................................................................................12
Section 3.1. Purchase Price.................................................................................12
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Section 3.2. Escrow.........................................................................................13
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Section 3.3. Allocation of Purchase Price...................................................................14
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Article IV. THE CLOSING.......................................................................................14
Section 4.1. Closing Date...................................................................................14
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Section 4.2. Transactions To Be Effected At The Closing.....................................................14
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Article V. REPRESENTATIONS AND WARRANTIES OF SELLER..........................................................15
Section 5.1. Seller's Organization. Good Standing...........................................................15
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Section 5.2. Authority; Execution and Delivery..............................................................15
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Section 5.3. Consents: No Violation, Etc....................................................................15
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Section 5.4. Financial Statements; Undisclosed Liabilities..................................................16
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Section 5.5. Title to Acquired Assets.......................................................................16
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Section 5.6. Real Property..................................................................................16
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Section 5.7. Accounts Receivable............................................................................16
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Section 5.8. Absence of Certain Changes or Events...........................................................16
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Section 5.9. Certain Tax Matters............................................................................16
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Section 5.10. Intentionally Deleted.......................................................................17
Section 5.11. Litigation..................................................................................17
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Section 5.12. Compliance with Laws........................................................................17
Section 5.13. Contracts...................................................................................18
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Section 5.14. Environmental Matters.......................................................................19
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Section 5.15. No Brokers..................................................................................19
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Section 5.16. No Adverse Parties In Possession............................................................19
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Section 5.17. Casualty and Condemnation...................................................................20
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Section 5.18. Unit Leases.................................................................................20
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Section 5.19. Insurance...................................................................................20
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Section 5.20. Employment Matters..........................................................................20
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Section 5.21. Suppliers, No Illegal Payments, Etc.........................................................20
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Section 5.22. Tenant Leases...............................................................................21
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Section 5.23. Business Names..............................................................................21
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Section 5.24. Governmental Bonds and Deposits.............................................................21
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Section 5.25. Exclusive Representations and Warranties....................................................21
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Article VI. REPRESENTATIONS AND WARRANTIES OF PURCHASER.......................................................21
Section 6.1. Purchaser's Organization; Good Standing........................................................21
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Section 6.2. Authority, Execution and Delivery..............................................................22
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Section 6.3. Consents; No Violations, Etc...................................................................22
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Section 6.4. Litigation.....................................................................................22
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Section 6.5. No Brokers.....................................................................................22
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Section 6.6. ERISA..........................................................................................22
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Article VII. CERTAIN COVENANTS AND AGREEMENTS..................................................................23
Section 7.1. Covenants of Seller Relating to Conduct of Business............................................23
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Section 7.2. Purchaser's Access to Information..............................................................23
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Section 7.3. Purchaser's Preservation of Records............................................................24
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Section 7.4. Legal Conditions to Closing....................................................................24
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Section 7.5. Collection of Receivables......................................................................24
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Section 7.6. Expenses.......................................................................................24
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Section 7.7. Financial Information..........................................................................25
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Section 7.8. Bulk Transfer Laws.............................................................................25
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Section 7.9. Actions of Seller and Purchaser................................................................25
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Section 7.10. Intentionally Deleted.......................................................................25
Section 7.11. Maintenance; Repair; Risk of Loss...........................................................25
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Section 7.12. Title Matters...............................................................................26
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Section 7.13. Tenant Security Deposits....................................................................27
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Section 7.14. NO REPRESENTATIONS BY SELLER................................................................27
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Section 7.15. Intentionally Deleted.......................................................................28
Section 7.16. Intentionally Deleted.......................................................................28
Article VIII. DUE DILIGENCE PERIOD...........................................................................28
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Section 8.1. Due Diligence Period...........................................................................28
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Article IX. CONDITIONS PRECEDENT..............................................................................29
Section 9.1. Conditions to Each Party's Obligations.........................................................29
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Section 9.2. Conditions to Obligations of Purchaser.........................................................29
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Section 9.3. Conditions to Obligations of Seller............................................................31
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Article X. TERMINATION, AMENDMENTS AND WAIVERS...............................................................31
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Section 10.1. Termination.................................................................................31
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Section 10.2. Amendments and Waivers......................................................................32
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Article XI. INDEMNIFICATION...................................................................................32
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Section 11.1. Indemnification by Seller...................................................................32
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Section 11.2. Indemnification by Purchaser................................................................33
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Section 11.3. Defaults....................................................................................34
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Section 11.4. Losses Net of Insurance.....................................................................35
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Section 11.5. Termination of Indemnification..............................................................35
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Section 11.6. Procedure...................................................................................35
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Article XII. GENERAL PROVISIONS................................................................................36
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Section 12.1. Notices.....................................................................................36
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Section 12.2. Headings....................................................................................37
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Section 12.3. Survival of Representations and Warranties..................................................37
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Section 12.4. Severability................................................................................38
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Section 12.5. Counterparts................................................................................38
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Section 12.6. Entire Agreement; No Third-Party Beneficiaries..............................................38
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Section 12.7. Governing Law...............................................................................38
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Section 12.8. Consent to Jurisdiction.....................................................................38
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Section 12.9. Publicity...................................................................................39
Section 12.10. Assignment..................................................................................39
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT, dated as of December 28, 2001
(this "Agreement"), is by and between NHP Retirement Housing Partners I Limited
Partnership, a Delaware limited partnership ("NHP"), Amherst Limited
Partnership, a New York limited partnership ("Nominee", together with NHP,
"Seller"), and BRE/Amberleigh Inc., a Delaware corporation, or its Permitted
Assignee as purchaser ("Purchaser").
WHEREAS, Seller is engaged in the Business and owns the
Acquired Assets (as hereinafter defined); and
WHEREAS, Seller desires to sell to Purchaser, and Purchaser
desires to purchase from Seller, the Acquired Assets, all upon the terms and
subject to the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants
herein contained and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto hereby agree as
follows:
Article I. DEFINITIONS
Section 1.1. Definitions.
As used in this Agreement, the following terms shall have the
meanings set forth below:
"Acquired Assets" shall have the meaning set forth in Section
2.2(a).
"Actual Knowledge" shall mean the actual awareness of facts or
circumstances concerning a matter by ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, or ▇▇▇▇▇ ▇▇▇▇▇▇▇.
"Adjustment Date" shall have the meaning set forth in Section
2.3(d).
"Affiliate" shall mean, with respect to any person, any other
person that directly or indirectly Controls, is Controlled by or is under common
Control with such first person. A person shall be deemed to "Control" another
person if such first person has the power to direct or cause the direction of
such other person, whether through ownership of securities, by contract or
otherwise.
"Assumed Liabilities" shall have the meaning set forth in
Section 2.3(a).
"Business" shall mean the operation of the 271-unit full
service retirement community (including 271 independent living units ("Units")
and related community amenities) located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇.
"Business Account Payable" shall mean any account payable of
Seller that relates primarily to or arises primarily out of the operation of the
Business prior to the Closing.
"Business Account Receivable" shall mean any account
receivable of Seller that relates primarily to or arises primarily out of the
operation of the Business.
The term "business day" shall mean any day other than a
Saturday, Sunday or other day on which banks in the City of New York are
permitted or required to close by law or regulation.
"Business Equipment" shall mean all furniture, appliances,
computers, medical and other equipment, tools, and other tangible property
(except for the Excluded Assets) that are used or held at the Facility for use
in the Business.
"Business Inventory" shall mean all inventory of goods and
supplies used or maintained in connection with the Business including, but not
limited to, food, cleaning materials, disposables, linens, consumables, office
supplies, drugs and medical supplies.
"Business Names" shall mean all of the following owned by
Seller or issued or licensed to Seller and used in connection with the operation
of the Facility or the Business: trademarks, trade names, service marks and
other intellectual property rights (including without limitation, the names and
marks "Amberleigh" and any and all formative, variants and derivatives thereof).
"Claims" shall mean all of Seller's rights, claims, credits,
causes of action, or rights of setoff against third parties relating to the
Acquired Assets, including, without limitation, unliquidated rights under
manufacturers' and vendors' warranties and guaranties but excluding all amounts
representing reimbursements for items paid by Seller.
"Closing" and "Closing Date" shall have the respective
meanings set forth in Section 4.1.
"Closing Costs" shall mean all costs incurred by Purchaser in
connection with the transactions contemplated by this Agreement including
without limitation financing fees, legal fees, title insurance policy premiums,
environmental and engineering review costs, and other diligence costs.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Confidentiality Agreement" shall have the meaning set forth
in Section 7.2.
"Contracts" shall mean all contracts, leases, indentures,
agreements, commitments, purchase orders and all other legally binding
arrangements, whether in existence on the date hereof or subsequently entered
into, including all amendments thereto for any equipment, machinery, vehicles,
furniture or other personal property located at the Facility and used in the
operation of the Facility which are held by or on behalf of Seller; all
maintenance, service and supply contracts, and credit card service agreements;
and all other contracts and agreements which are held by Seller or its
Affiliates in connection with the operation of the Business.
"Disclosure Schedule" shall mean the Schedules referred to in
Article V of this Agreement.
"Due Diligence Period" means the time period commencing on the
date of full execution of this Agreement and continuing to and including the
fifteenth (15th) day thereafter or the Closing Date, whichever is earlier,
provided that if such former date is not a business day, the Due Diligence
Period shall end on the next succeeding business day.
"Environmental Law" shall mean any applicable Governmental
Rule issued, promulgated or entered into by any Governmental Entity relating to
the environment, to the preservation or reclamation of natural resources, or to
Hazardous Substances.
"Excluded Assets" shall have the meaning set forth in Section
2.2(b).
"Excluded Liabilities" shall have the meaning set forth in
Section 2.3(b).
"Existing Mortgage" means the first consolidated mortgage in
the original principal amount of $23,500,000 more particularly described as
Items 7, 8 and 9 of Schedule B, Section I of the Title Commitment.
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"Facility" shall mean the fee simple interest in the Land
together with: (i) all buildings, structures, and improvements erected or
situated on the Land including without limitation the 271-unit independent
living facility located thereon, all replacements or additions thereto between
the date hereof and the Closing Date (the "Buildings"); (ii) all systems,
facilities, fixtures, machinery, equipment and conduits to provide fire
protection, security, heat, exhaust, ventilation, air conditioning, electrical
power, light, plumbing, refrigeration, gas, sewer and water to the Facility
(including all replacements or additions thereto between the date hereof and the
Closing Date); (iii) all privileges, development and other rights, easements,
hereditaments, and appurtenances thereto belonging; and (iv) all right, title
and interest of Seller in and to any streets, alleys, passages and other
rights-of-way included therein or adjacent thereto (before or after the vacation
thereof).
"Files and Records" shall have the meaning set forth in
Section 2.2(a)(ix).
"Financial Statements" shall have the meaning set forth in
Section 5.4.
"General Assignment and ▇▇▇▇ of Sale" shall have the meaning
set forth in Section 9.2(c).
"Governmental Bonds and Deposits" shall mean all transferable
bonds or deposits made by Seller or its predecessors in title with any
governmental agency or authority or with any utility company or third party
relating to the construction, use, operation, or enjoyment of the Acquired
Assets.
"Governmental Entity" shall mean any court, administrative
agency or commission or other governmental authority or instrumentality of the
United States, New York State, Erie County, or the Town of Amherst.
"Governmental Rule" shall mean any law, judgment, order,
decree, statute, ordinance, rule or regulation issued or promulgated by any
Governmental Entity.
"Hazardous Substance" means any materials listed in 49
▇.▇.▇.▇▇. 172. 101 and any materials defined as toxic or hazardous pursuant to
42 U.S.C.A.ss.9601 (14) or any other Environmental Law.
"Initial Financing" shall mean the initial financing obtained
by the Purchaser after the Closing Date from a lender which is not an Affiliate
of Purchaser and which shall be secured by the Facility.
"Intangible Property" shall mean Seller's interest, if any, in
or to all of the following items used in the operation of the Facility (i)
warranties and guaranties held by Seller including without limitation the
warranties and guaranties set forth on Schedule 2.2(a); (iii) computer software
used in connection with any computer systems located at the Facility; (iv)
direct dial telephone numbers for the Facility; and (v) all goodwill in
connection with the ownership, operation and maintenance of the Facility.
"Land" means the parcels of land located in the Town of
Amherst, County of Erie, State of New York, as more specifically described in
Exhibit A.
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"Licenses and Permits" shall mean all certificates of
occupancy and other licenses, permits, registrations, authorizations, use
agreements, orders, or approvals (including, without limitation, if applicable,
medicare and medicaid licenses and permits) of governmental or
quasi-governmental agencies and authorities (whether federal, state, local,
municipal, or foreign) or private parties used in the construction, operation,
or enjoyment of the Acquired Assets.
"Lien" shall mean any mortgage, claim, charge, lien, security
interest, easement, right of way, pledge, covenant, restriction or encumbrance
of any nature whatsoever.
"Loss" shall mean any loss, liability, claim, damage or
expense, including reasonable legal fees and expenses.
"Management Agreement" shall mean the current management
contract between Capital Senior Living, Inc. ("Manager"), a Texas corporation,
and Seller pursuant to which Manager manages the Facility.
"Marketing Materials" shall mean all advertising materials,
customer lists, training materials and market research materials.
"Material Adverse Effect" shall mean an effect which,
individually or together with other adverse effects, is materially adverse to
the business, prospects, assets, financial condition or results of operations of
the Business taken as a whole, other than an effect relating to the economy in
general or changes relating to the Business' industry in general.
"Nominee" shall mean Amherst Limited Partnership, a New York
limited partnership which is a wholly-owned subsidiary of Seller, and which owns
record title to Parcel II (more particularly described on Exhibit A).
"Partnership Agreement" shall mean that certain Third Amended
and Restated Agreement of Limited Partnership of NHP Retirement Housing Partners
I Limited Partnership, dated as of September 23, 1986, by and between
NHP/RHGP-I, a Delaware limited partnership and NHP RHP-1 Assignor Corporation, a
Delaware corporation, as amended.
"Permitted Assignee" shall have the meaning set forth in
Section 12.10.
"Permitted Exceptions" shall mean (i) any Lien or other matter
disclosed in Schedule B - Section 2 of the Title Commitment issued by the Title
Company annexed to this Agreement as Exhibit B, (ii) those matters not objected
to by Purchaser as provided in Section 7.12, and (iii) any additional
encumbrances or liens placed against the Facility by Purchaser. In no event
shall the Existing Mortgage be a Permitted Exception.
The term "person" shall mean any individual, corporation,
partnership, limited liability company, joint venture, trust, business
association, organization, Governmental Entity or other entity.
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"Personal Property" shall mean all of the Acquired Assets
other than the Facility.
"Prepaid Expenses" shall mean all prepaid rentals and other
prepaid expenses arising from payments made by Seller in the ordinary and usual
course of the operation of the Business prior to the close of business on the
Adjustment Date.
"Purchase Price" shall have the meaning set forth in Section
3.1.
"Purchaser Indemnified Parties" shall have the meaning set
forth in Section 11.1.
"Purchaser Note A" shall mean the promissory note in the
amount of $1,000,000 substantially in the form of Exhibit G.
"Purchaser Note B" shall mean the promissory note in the
amount of $1,000,000 substantially in the form of Exhibit H.
"Rent Roll" shall mean a rent roll showing all Unit Leases,
rent amounts, and term.
"SEC" shall mean the Securities and Exchange Commission.
"SEC Reports" shall have the meaning set forth in Section 5.4.
"Seller Indemnified Parties" shall have the meaning set forth
in Section 11.2.
"Tax" shall mean all Federal, state, local and foreign taxes
and assessments, including all interest, penalties and additional with respect
thereto.
"Tax Returns" shall have the meaning set forth in Section 3.3.
"Tenant Leases" shall mean all leases, subleases, licenses,
concessions, and similar agreements granting an interest to any other person or
entity for the use and occupancy of any portion of the Facility excluding the
Unit Leases.
"Termination Date" shall have the meaning set forth in Section
12.3.
"Third Party Claim" shall have the meaning set forth in
Section 11.6(b).
"Title Company" shall mean Fidelity National Title Insurance
Company of New York.
"Unit Leases" means leases or other occupancy arrangements for
residential Units within the Facility.
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Section 1.2. Interpretation.
When used in this Agreement the words "include", "includes"
and "including" shall be deemed to be followed by the words "without
limitation".
(a) When used in this Agreement, the word "primarily" shall be deemed
to be followed by the words "or exclusively".
(b) Any terms defined in the singular shall have a comparable meaning
when used in the plural, and vice versa.
(c) When used in this Agreement, the word "or" is not exclusive.
(d) All references to Articles, Sections, Exhibits, Schedules and
Appendices shall be deemed references to Articles, Sections, Exhibits,
Schedules and Appendices to this Agreement.
(e) This Agreement shall be deemed drafted jointly by all the parties
hereto and shall not be specifically construed against any party hereto
based on any claim that such party or its counsel drafted this
Agreement.
Article II. SALE AND PURCHASE OF ACQUIRED ASSETS
Section 2.1. Purchase and Sale.
Upon the terms and subject to the conditions of this
Agreement, on the Closing Date, Seller shall sell, assign, transfer, convey and
deliver to Purchaser, and Purchaser shall purchase, acquire and accept, all of
Seller's right, title and interest in, to and under the Acquired Assets.
Section 2.2. Acquired Assets and Excluded Assets.
(a) The term "Acquired Assets" shall mean the following items set forth
in this Section 2.2, provided that the Acquired Assets shall not
include the Excluded Assets:
(i) the Facility;
(ii) all Business Equipment;
(iii) all Business Inventory;
(iv) all Business Accounts Receivable;
(v) all Business Names;
(vi) all Contracts (other than those Contracts which are
identified on Schedule 5.13 as Contracts not being assumed by
Purchaser), together with all security deposits held
thereunder;
(vii) all right, title and interest of Seller in and to the
Unit Leases, together with all security deposits held
thereunder;
(viii) all Marketing Materials that relate primarily to or
arise primarily out of the operation of the Business that are
in the possession of Seller;
(ix) all records and lists pertaining to residents, accounts
and suppliers, books, ledgers, files and other printed,
written, and computer-based materials reasonably necessary for
Purchaser's continuing operation of the Business, including
without limitation, all information that is necessary for the
preparation of any Tax Returns to be filed by the Purchaser
after the Closing Date or the determination of the Tax basis
of the Acquired Assets (the "Files and Records");
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(x) all Intangible Property, including the warranties and
guarantees identified on Schedule 2.2(a);
(xii) all Claims;
(xii) all Tenant Leases together with all security deposits
held thereunder;
(xiii) all Licenses and Permits;
(xiv) all Governmental Bonds and Deposits; and
(x) all Prepaid Expenses.
(b) The term "Excluded Assets" shall mean the following:
(i) cash on hand or in banks and cash equivalents owned by
Seller relating to the operations of the Business, provided
that the Excluded Assets shall not include security deposits
held by, or on behalf of Seller in connection with the
Contracts, Unit Leases, Tenant Leases or any other aspect of
the Business;
(ii) all rights of Seller under this Agreement and the
agreements, instruments and certificates delivered in
connection with this Agreement;
(iii) all records prepared in connection with the sale of the
Business, including the bids and other information received
from third persons in respect of the Business and analyses
relating to the Business, except for the Files and Records;
(iv) all rights relating to the Excluded Liabilities;
(v) business records reasonably retained by Seller; provided,
however, that Purchaser may retain copies of such records that
are reasonably required in the operation of the Business by
Purchaser;
(vi) any tax refunds, insurance refunds from prepaid
insurance, insurance deposits or recoveries from claims with
respect to periods (or portions thereof) ending prior to the
Closing Date, except as provided in Section 7.11(b) hereof;
(vii) manuals developed and owned by Manager relating to
personnel, marketing and accounting policies and procedures;
(viii) the Management Agreement; and
(ix) all of Seller's rights, claims, causes of action or
rights of set-off against third parties relating to the
Business or Acquired Assets with respect to periods (or
portions thereof) ending on or prior to the Closing Date.
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(c) Nothing in this Agreement shall be construed as an attempt by
Seller to assign any Contract to the extent that such Contract is not
assignable without the necessary consent of the other party or parties
thereto. Seller shall use reasonable efforts, in cooperation with
Purchaser, to secure any necessary consent to assignment of those
Contracts indicated with an asterisk on Schedule 5.13 prior to the
Closing, and thereafter, Seller shall continue to use reasonable
efforts to obtain those consents that have not been obtained prior to
the Closing Date; provided, however, that Seller shall not be required
to make any payment to any person or forego any benefits in order to
obtain such consent.
Section 2.3. Assumption of Certain Liabilities and Obligations;
Adjustments.
(a) Upon the terms and subject to the conditions of this Agreement,
Purchaser shall assume, effective as of the Closing, and agrees to pay,
perform and discharge when due, and agrees to indemnify Seller and its
Affiliates and hold Seller and its Affiliates harmless from and after
the Closing from any Losses of Seller arising out of the Assumed
Liabilities (as defined below). "Assumed Liabilities" means the
following and only the following:
(i) all obligations and liabilities of Seller pursuant to the
Contracts, Tenant Leases and Unit Leases included in the
Acquired Assets relating to any periods (or portions thereof)
beginning on or after the Closing Date;
(ii) all Business Accounts Payable for which payment is made
or credit is given by Seller to Purchaser pursuant to Section
2.3(c) hereof; and
(iii) any obligation or liability for Taxes for any periods
that are attributable to the Business or relating to the
Acquired Assets, relating to any periods (or portions thereof)
beginning on or after the Closing Date.
(b) Upon the terms and subject to the conditions of this Agreement,
Seller agrees to pay, perform and discharge when due, and agrees to
indemnify Purchaser and its Affiliates and hold Purchaser and its
Affiliates harmless from any Losses of Purchaser arising out of the
Excluded Liabilities (as defined below). The term "Excluded
Liabilities" shall mean:
(i) any obligation or liability for Taxes that relates
primarily to or arises primarily as a result of any of the
Excluded Assets;
(ii) any obligation or liability for income Taxes that relates
solely to or arises solely as a result of the sale or transfer
from Seller to Purchaser of any of the Acquired Assets;
(iii) any obligation or liability of Seller for Taxes
attributable to the Business or relating to the Acquired
Assets for any periods (or portions thereof) ending on or
prior to the Adjustment Date;
(iv) all obligations and liabilities of Seller in respect of
any current or former employee of Seller engaged in the
Business, which obligation or liability arises out of acts or
conditions that occurred prior to or on the Adjustment Date,
including, without limitation, any liability or obligation
under bonus programs maintained by Seller, regardless of when
such claims are asserted;
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(v) except as otherwise provided in Section 2.3(a)(ii), all
payments due prior to the Closing Date pursuant to the
Contracts, Unit Leases, and Tenant Leases included in the
Acquired Assets;
(vi) all Business Accounts Payable for which payment is not
made or credit is not given by Seller to Purchaser pursuant to
Section 2.3(c) hereof;
(vii) any liability under the Management Agreement;
(viii) all obligations and liabilities under the Existing
Mortgage and the notes and indenture evidencing the
indebtedness secured thereby, including any actions taken by
the trustee thereunder;
(ix) all obligations and liabilities of Seller or the general
partner of Seller under the Partnership Agreement or any
fiduciary duties emanating therefrom or under applicable
Governmental Rule;
(x) any claim (direct, derivative or class) by a direct or
indirect holder of equity interests or indebtedness of Seller
in any respect relating to the transactions contemplated by
this Agreement; and
(xi) all other liabilities and obligations of Seller or its
Affiliates with respect to the Facility or the Business, which
are not expressly assumed by Purchaser pursuant to this
Agreement.
(c) Except as to those items which are to be apportioned as provided in
Section 2.3(d) below, with regard to expenses incurred in respect of
Business Accounts Payable during periods (or portions thereof) ending
on or prior to the Adjustment Date, Seller agrees (i) to pay all
Business Accounts Payable due and payable prior to the Adjustment Date
and (ii) at the Closing, to pay to Purchaser or credit Purchaser an
amount equal to the estimated cost of Business Accounts Payable not
previously paid.
(d) Any rent, additional rent or other payments made by tenants under
Unit Leases, Tenant Leases, ad valorem, use, real and personal
property, intangible and other similar Taxes, installments or special
assessments, utility, water, sewer taxes and rents, permit, license and
inspection fees, fuel oil stored at the Facility, all costs and
expenses of operating the Facility, any amounts payable under any
Contracts, or similar payments arising from, or relating to, the
Acquired Assets or the conduct of the Business (including such other
items as are normally apportioned at the closings of sales of
properties similar to the Facility in Erie County, New York), which
relate to periods both before and after the Closing Date, and all
Prepaid Expenses shall be prorated and adjusted between Seller and
Purchaser as of 11:59 p.m., Eastern Standard Time, December 31, 2001,
(the "Adjustment Date") and the net amount thereof shall either
increase the Purchase Price or be credited against the Purchase Price.
Seller shall be entitled to, and responsible only for, as the case may
be, the portion of such amounts allocable to the period prior to the
Closing Date, and Purchaser shall be entitled to and responsible for,
as the case may be, the portion of such amounts allocable to the period
from and after the Closing Date.
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(e) If on, or prior to, the Closing, Purchaser has entered into a rate
lock arrangement in connection with the Initial Financing that would
result in an all-in interest rate on the Initial Financing (the "Actual
Interest Rate") of other than 6.77% per annum, Seller shall give
Purchaser a credit against the Purchase Price in the amount of the
Interest Rate Factor (as defined below).
As used herein, the term "Interest Rate Factor" shall mean
$240,000 plus an amount equal to (a) $4,000 multiplied by (b) the
difference between (i) 483 basis points and (ii) the 10-year Treasury
Rate as of the Closing Date expressed as a number of basis points
(i.e., 4.83% is equal to 483 basis points), which is estimated to be
$184,000.
(f) No later than 180 days after the Closing Date, Seller and the
Purchaser shall make a final adjustment to the prorations pursuant to
subsections (c) and (d) and to the Interest Rate Factor pursuant to
subsection (e) (the "Final Closing Adjustment"). The Final Closing
Adjustment shall be made in the following manner:
(i) General. All adjustments or prorations which could not be
determined at the Closing because of the lack of actual
statements, bills or invoices for the current period or any
other reason shall be made as a part of the Final Closing
Adjustment. Any net adjustment in favor of the Purchaser shall
be paid in cash by the Seller to the Purchaser no later than
20 days after the Final Closing Adjustment. Any net adjustment
in favor of the Seller shall be paid in cash by the Purchaser
to the Seller no later than 20 days after the Final Closing
Adjustment; and
(ii) No Further Adjustments. The Final Closing Adjustment
shall be conclusive and binding upon the Seller and the
Purchaser and the Seller and the Purchaser hereby waive any
right to contest after the Final Closing Adjustment any
prorations, apportionment or adjustments to be made pursuant
to this Section.
(iii) Offset. Seller shall have the right to receive amounts
in the Indemnity Escrow and/or to set off against any amounts
that may be due and payable to Seller pursuant to Purchaser
Note A or Purchaser Note B, any amounts for which Seller shall
be obligated to pay to Purchaser pursuant to the provisions of
this Section 2.3(f).
(g) If any tenant is in arrears in the payment of rent under a Unit
Lease or a Tenant Lease on the Closing Date, rents received from such
tenant after the Closing shall be applied in the following order of
priority: (a) first to periods following the Closing; (b) second to the
month in which the Closing occurred; and (c) then to the period
preceding the Closing. If rents or any portion thereof received by
Seller or Purchaser after the Closing are payable to the other party by
reason of this allocation, the appropriate sum, less a proportionate
share of any reasonable attorneys' fees, costs and expenses of
collection thereof, shall be promptly paid to the other party, which
obligation shall survive the Closing.
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(h) Except for the Assumed Liabilities, all obligations and liabilities
arising as a result of the ownership by Seller prior to the Closing of,
or the operation prior to the Closing of the activities conducted at,
the Facility (including all obligations and liabilities relating to
personal injury or Environmental Laws) shall be the responsibility of
Seller. All obligations and liabilities arising as a result of the
ownership by Purchaser on or subsequent to the Closing of, or the
operation on or subsequent to the Closing of the activities conducted
at, the Facility (including all obligations and liabilities relating to
personal injury or Environmental Laws) shall be the responsibility of
Purchaser.
The provisions of Section 2.3 shall survive the Closing.
Article III. PURCHASE PRICE
Section 3.1. Purchase Price.
The purchase price (the "Purchase Price") for the Acquired
Assets shall be $20,000,000 and, payable as follows:
(a) Deposit. Upon the full execution of this Agreement, the Purchaser
shall post an ▇▇▇▇▇▇▇ money deposit (together with all interest accrued
thereon, the "Deposit") in immediately available funds in the amount of
$500,000 with Fidelity National Title Insurance Company of New York, ▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ (the "Escrow Agent"). The Deposit made
by the Purchaser under this Agreement shall be applied against the
Purchase Price at Closing or refunded to the Purchaser or paid to the
Seller as set forth in this Agreement. The failure of Purchaser to
deliver the Deposit in accordance with this Section 3.1, shall be
deemed Purchaser's option to terminate this Agreement whereupon neither
party shall have any further rights against or obligations to the other
under this Agreement.
(b) Capital Expenditure Holdback. Purchaser shall receive a credit
against the Purchase Price in an amount equal to $285,000 for purposes
of funding all capital expenditures, upgrades, and other costs required
at the Facility after Closing.
(c) Indemnity Escrow. Purchaser shall deliver the amount of $250,000
("Indemnity Escrow") to the Escrow Agent at Closing and receive a
credit against the Purchase Price in an amount equal to $250,000 for
such Indemnity Escrow.
(d) Purchaser Note A. Purchaser shall receive a credit against the
Purchase Price in an amount equal to $1,000,000 by delivery of
Purchaser Note A to Seller at Closing.
(e) Purchaser Note B. Purchaser shall receive a credit against the
Purchase Price in an amount equal to $1,000,000 by delivery of
Purchaser Note B to Seller at Closing. An amount equal to up to
$250,000 ("Additional Indemnity Escrow") shall be deposited by
Purchaser with the Escrow Agent in lieu of payment by Purchaser to
Seller of up to $250,000 of the amount due under the Purchaser Note B.
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(f) Cash Balance. The balance of the Purchase Price, as adjusted by the
prorations and adjustments set forth in this Agreement, shall be
payable by Purchaser to Seller by wire transfer in immediately
available funds at Closing to an account or accounts designated by
Seller.
Section 3.2. Escrow.
(a) The Deposit, Indemnity Escrow, the Additional Indemnity Escrow, and
the Offset Amount (as defined in Section 11.1(b)), if any, (the
"Escrowed Funds") to be held by the Escrow Agent hereunder shall be
invested in a federally insured interest-bearing money market account
or accounts and interest shall accrue for the benefit of and be paid to
the party to whom the Escrowed Funds are paid pursuant to this
Agreement. The Deposit shall be paid by Purchaser to Seller or as
Seller directs at the Closing and shall not be part of the Escrowed
Funds after the Closing.
(b) If this Agreement is terminated in accordance with the terms
hereof, or if the Closing does not take place under this Agreement by
reason of the failure of either party to comply with such party's
obligations hereunder, Escrow Agent shall pay the Escrowed Funds
(together with all interest thereon, if any) to Seller and/or
Purchaser, as the case may be, in accordance with the provisions of
this Agreement.
(c) The parties acknowledge that Escrow Agent is acting solely as a
stakeholder and except (i) in the event of the Closing or (ii) in
connection with a termination notice by Purchaser in accordance with
Section 8.1(a), Escrow Agent shall not deliver the Escrowed Funds
except on seven days' prior written notice to the parties and only if
neither party shall object within such seven-day period. If there is
any dispute as to whether Escrow Agent is obligated to deliver all or
any portion of the Escrowed Funds or as to whom such Escrowed Funds are
to be delivered, Escrow Agent shall not make any delivery, but in such
event Escrow Agent may hold the same until receipt by Escrow Agent of
an authorization in writing, signed by all of the parties having any
interest in such dispute, directing the disposition of the Escrowed
Funds (together with all interest thereon, if any), or in the absence
of such authorization, Escrow Agent may hold the Escrowed Funds
(together with all interest thereon, if any), until the final
determination of the rights of the parties in an appropriate
proceeding. Notwithstanding the foregoing, in connection with a
termination notice by Purchaser in accordance with Section 8.1(a),
Seller hereby authorizes and directs Escrow Agent to immediately
deliver the Deposit to Purchaser without the necessity of any prior
notice or consent by Seller. If such written authorization is not given
or proceedings for such determination are not initiated within 30 days
after the date Escrow Agent shall have received written notice of such
dispute, and thereafter diligently continued, Escrow Agent may, but is
not required to, bring an appropriate action or proceeding for leave to
deposit the Escrowed Funds (together with all interest thereon, if
any), with a court of competent jurisdiction pending such
determination. Escrow Agent shall be reimbursed for all costs and
expenses of such action or proceeding including, without limitation,
reasonable attorneys' fees and disbursements, by the party determined
not to be entitled to the Escrowed Funds, or if the Escrowed Funds are
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split between the parties hereto, such costs of Escrow Agent shall be
split, pro rata, between Seller and Purchaser, in inverse proportion to
the amount of the Escrowed Funds received by each. Upon making delivery
of the Escrowed Funds (together with all interest thereon, if any), in
the manner provided in this Agreement, Escrow Agent shall have no
further obligation or liability hereunder.
(d) Escrow Agent shall not be deemed to be the agent of either of the
parties, and that Escrow Agent shall not be liable to either of the
parties for any act or omission on its part unless taken or suffered in
bad faith, in willful disregard of this Agreement or involving gross
negligence. Seller and Purchaser shall jointly and severally indemnify
and hold Escrow Agent harmless from and against all costs, claims and
expenses, including reasonable attorneys' fees, incurred in connection
with the performance of Escrow Agent's duties hereunder (excluding,
however, fees incurred in representing Seller), except with respect to
actions or omissions taken or suffered by Escrow Agent in bad faith, in
willful disregard of this Agreement or involving gross negligence on
the part of Escrow Agent.
(e) Escrow Agent has acknowledged agreement to these provisions by
signing in the place indicated on the signature page of this Agreement.
Section 3.3. Allocation of Purchase Price.
Seller and Purchaser have mutually agreed on the allocation of
the Purchase Price among the Acquired Assets as set forth in Schedule 3.3 hereto
in accordance with Section 1060 of the Code and the regulations promulgated
thereunder and all applicable provisions of state, local and foreign law (such
allocations, the "Section 1060 Allocations"). Each of the parties hereto agrees
(i) to prepare and file reports, returns, declarations, statements, forms,
extensions or other documents filed or required to be filed with any federal,
state, local or other governmental department, court or other authority in
respect of any Tax ("Tax Returns"), including Form 8594, in a manner consistent
with the Section 1060 Allocations, as set forth on Schedule 3.3, (ii) to report
this transaction for federal, state, local and foreign income tax purposes in
accordance with the Section 1060 Allocations, as set forth on Schedule 3.3, and
(iii) to use its best efforts to sustain the Section 1060 Allocations, as set
forth on Schedule 3.3, in any subsequent tax audit or dispute.
Article IV. THE CLOSING
Section 4.1. Closing Date.
The closing of the sale and transfer of the Acquired Assets
(hereinafter called the "Closing") shall take place at the offices of
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, 1221 Avenue of the Americas, New York, New York
on or prior to December 28, 2001, or at such earlier date as shall be mutually
agreed to by the parties hereto (such date of the Closing being hereinafter
referred to as the "Closing Date").
Section 4.2. Transactions To Be Effected At The Closing.
At the Closing:
(a) Each Seller shall deliver or cause to be delivered to Purchaser all
documents referred to in Section 9.2, in each case appropriately
executed;
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(b) Purchaser shall deliver or cause to be delivered to Seller all
documents referred to in Section 9.3, in each case appropriately
executed; and
(c) Purchaser shall pay the remainder of the Purchase Price in
accordance with Section 3.1, by wire transfers to such bank account or
accounts as may be designated by Seller. Purchaser shall be provided
with wire transfer instructions at least two business days prior to the
Closing Date.
Article V. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Purchaser as follows:
Section 5.1. Seller's Organization. Good Standing.
NHP is a limited partnership, duly organized, validly existing
and in good standing under the laws of the State of Delaware. NHP is duly
qualified to conduct business as a foreign entity in the State of New York.
Nominee is a limited partnership, duly organized, validly existing and in good
standing under the laws of the State of New York. Each Seller has the requisite
power and authority to own the Acquired Assets owned by such Seller and to carry
on the Business as currently conducted.
Section 5.2. Authority; Execution and Delivery.
Seller has the requisite power and authority to enter into
this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by Seller, and the consummation of the
transactions contemplated hereby have been duly and validly authorized. This
Agreement has been duly executed and delivered by Seller and, assuming the due
authorization, execution and delivery of this Agreement by Purchaser,
constitutes the legal, valid and binding obligation of Seller, enforceable
against Seller in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer and other similar
laws affecting creditors' rights generally from time to time in effect and to
general principles of equity (including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing) regardless of whether
considered in a proceeding in equity or at law.
Section 5.3. Consents: No Violation, Etc.
Except as set forth on Schedule 5.3, the execution and
delivery of this Agreement do not, and the consummation of the transactions
contemplated hereby and the compliance with the terms hereof will not (i)
violate any Governmental Rule applicable to Seller, (ii) conflict with the
Partnership Agreement, (iii) conflict with any Contract, or (iv) require any
approval, authorization, consent, license, exemption, filing or registration
with any court, arbitrator or Governmental Entity, except for such approvals,
authorizations, consents, actions or filings which have been obtained or made or
which, if not obtained or made, would not have a Material Adverse Effect or
materially interfere with Seller's performance of its obligations hereunder.
Seller is not a "foreign person" as defined in Section 1445 of the Code and the
regulations relating thereto.
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Section 5.4. Financial Statements; Undisclosed Liabilities.
Attached hereto as Schedule 5.4 are (i) the Seller's Annual
Reports on Form 10-K for the fiscal years ended December 31, 2000 and 1999 and
Seller's Quarterly Reports on Form 10-Q for the quarters ended March 31, 2001,
June 30, 2001, and September 30, 2001 respectively, each filed with the SEC (the
"SEC Reports"), which in the case of the Annual Reports include the audited
financial statements of Seller as of December 31, 2000 and December 31, 1999,
respectively, and in the case of the Quarterly Reports include Seller's
unaudited financial statements as of March 31, 2001, June 30, 2001, and
September 30, 2001 respectively; (ii) unaudited financial statements for the
Business conducted at the Facility for the twelve months ended December 31, 2000
and December 31, 1999, respectively (collectively, the "Financial Statements"),
and (iii) unaudited financial statements for October and November 2001. The
Financial Statements have been prepared from the books and records of Seller and
fairly present in all material respects the financial condition and results of
operations of Seller for the periods indicated (except in each case as described
in Schedule 5.4 and as may be described in the notes included therein). There
are no liabilities or obligations related to the Business which would reasonably
be expected to have a Material Adverse Effect, other than as reflected in the
Financial Statements or as disclosed in the Disclosure Schedule.
Section 5.5. Title to Acquired Assets.
Seller has good and valid title to all the Acquired Assets,
which, at Closing, shall be free and clear of all Liens other than Permitted
Exceptions. This Section 5.5 does not relate to the Facility, which is
exclusively the subject of Section 5.6.
Section 5.6. Real Property.
NHP as to Parcel I and Nominee as to Parcel II each has good
and insurable fee title to the Facility, which at Closing shall be free and
clear of all exceptions other than Permitted Exceptions.
Section 5.7. Accounts Receivable.
All the trade accounts receivable of Seller that relate
primarily to or arise primarily out of the operation of the Business as of the
Closing Date will represent actual sales or Unit rentals made in the ordinary
course of business.
Section 5.8. Absence of Certain Changes or Events.
Except as set forth in Schedule 5.8, to Seller's Actual
Knowledge, since December 31, 2000, Seller has conducted the Business in the
ordinary course consistent with past practice, and there has not occurred any
event or condition which would reasonably be expected to have a Material Adverse
Effect.
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Section 5.9. Certain Tax Matters.
(a) Except as otherwise specifically disclosed on Schedule 5.9, Seller:
(i) Has filed or will file or furnish when due in accordance
with all applicable laws all Tax Returns required to be filed
on or prior to the Closing Date;
(ii) Has caused all Tax Returns to be (and as to any Tax
Returns not filed as of the date hereof that are required to
be filed on or prior to the Closing Date, will cause such Tax
Returns to be) complete and accurate in all material respects;
(iii) Has timely paid (or adequate provision has been made for
the payment of) all Taxes shown as due and payable on the Tax
Returns that have been filed prior to the date hereof or that
are being apportioned pursuant to this Agreement; and
(iv) Is not subject to any liens for Taxes now due and payable
on the Acquired Assets.
(b) Seller shall submit to Purchaser a list of all jurisdictions to
which any Tax is currently being paid by Seller.
(c) None of the Acquired Assets is (A) an asset or property that is or
will be required to be treated as described in Section 168(f)(8) of the
Internal Revenue Code of 1954 and in effect immediately before the Tax
Reform Act of 1986, or (B) tax-exempt use property within the meaning
of Section 268(h)(1) of the Code.
Section 5.10. Intentionally Deleted.
Section 5.11. Litigation.
Except as set forth on Schedule 5.11, as of the date hereof,
there is no suit, claim, action, investigation or proceeding pending or
threatened in writing against Seller that relates to the Business or the
Acquired Assets which (i) if adversely determined would be reasonably expected
to result in a Material Adverse Effect or (ii) challenges or seeks to prevent or
enjoin the transactions contemplated by this Agreement.
Section 5.12. Compliance with Laws.
(a) Except as set forth on Schedule 5.12, Seller is in compliance in
all material respects with all Governmental Rules applicable to it
which relate primarily to the Acquired Assets, except where the failure
to so comply would not reasonably be expected to have a Material
Adverse Effect. Except as set forth in Schedule 5.12, Seller has not
received any written notice of any asserted violation of any such
Governmental Rules and Seller has not received any written notice since
January 1, 1999 that any investigation or review by any Governmental
Entity with respect to the Business is pending or that any such
investigation or review is contemplated. This Section 5.12 does not
relate to environmental matters, which are exclusively the subject of
Section 5.14. Seller has not received written notice from any agency
supervising or having authority over the Facility or services provided
at the Facility requiring such Facility or any service, staff, or
16
practice provided at the Facility to be modified, restricted or
conditioned as to service or eligibility or be reworked or redesigned
or additional furniture, fixtures, equipment or inventory to be
provided at the Facility so as to conform or comply with any existing
in any applicable law, code or standard.
(b) Seller's Permits. Schedule 5.12 attached hereto contains a true and
complete list of the Licenses and Permits. The Licenses and Permits are
all of the licenses, permits, approvals, certificates of need,
qualifications and the like which are necessary for the ownership and
operation by Seller of the Business and the Acquired Assets, including
the Facility. The Licenses and Permits are in full force and effect and
no such Permit is conditional or restricted.
(c) Compliance of Facility with State Licensure Requirements. As of the
Closing Date, the Facility shall meet, in all material respects, all
standards and conditions for the operation and licensure of independent
living facilities to the extent such standards and conditions are
applicable to such Facility and is not subject to any variances or
waivers with respect to licensure or operational requirements. The
provision of services by Mercy Home Care of Western New York pursuant
to its agreement with The Amberleigh, dated August 1, 1995, does not
require any additional licensure of the Seller or the Facility.
(d) Work Order, Statements of Deficiencies. Except as set forth on
Schedule 5.12, there are no pending work orders or statements of
deficiencies relating to the Facility which have been required or
issued by any state department of health or any insurance company,
police or fire department, sanitation, health or work authorities or
any other federal, state, or municipal authority.
Section 5.13. Contracts.
Except for Contracts listed on Schedule 5.13, the Existing
Mortgage, and except for Contracts relating to Excluded Assets, Seller is not a
party to or bound by any Contract including without limitation the following:
(i) an indenture, note, loan or credit agreement or other
Contract relating to the borrowing of money by Seller or to
the direct or indirect guarantee or assumption by Seller of
the obligation of any other person in excess of $ 10,000;
(ii) a lease or similar agreement under which Seller is a
lessee of, or holds or operates, any real property owned by
any third party;
(iii) a Contract involving future payment for goods or
services by Seller unless terminable without payment or
penalty upon no more than 30 days' notice;
(iv) a Contract involving the obligation of Seller to deliver
in the future products or services unless terminable without
payment or penalty upon no more than 30 days' notice;
(v) a Contract evidencing any Lien on the Acquired Assets
(other than Permitted Exceptions); or
17
(vi) a Contract with or permit by or from any Governmental Entity,
the loss of which would materially interfere with the
operation of the Business as presently conducted.
Except as disclosed in Schedule 5.13, each Contract listed thereon is a valid
and binding obligation of Seller. Except as disclosed in Schedule 5.13, Seller
has not received any notice of default or notice of the intention of any party
to any such Contract to terminate such Contract. Complete and correct copies of
all Contracts referred to in Schedule 5.13, together with all modifications and
amendments thereto, have been delivered to Purchaser.
Section 5.14. Environmental Matters.
Except as set forth on Schedule 5.14, to the Actual Knowledge
of Seller, the Facility is not in violation of any federal, state or local law,
ordinance or regulation relating to industrial hygiene or to the environmental
conditions on, under or about the Facility, including soil and groundwater
condition. Neither Seller, nor to the Actual Knowledge of Seller, any third
party, has used, generated, manufactured, stored or disposed of on, under or
about the Facility or transported to or from the Facility, or incorporated into
any improvements now or at any time thereon, any Hazardous Substances. Seller
has not received any written notice of any claim or citation of noncompliance
with respect to any violation of Environmental Laws and, to the Actual Knowledge
of Seller, there are not facts, circumstances, conditions, or occurrences on the
Facility that could reasonably be expected to result in the violation of any
such Environmental Laws or cause to be subject to any restrictions on the
existing or contemplated development, use or transferability thereof under any
Environmental Laws. To the Actual Knowledge of Seller, there are no underground
storage tanks under the Facility. Seller has not released or agreed to any
limitation of liability of any person, firm or entity with respect to its or
their obligations arising with respect to the Facility pursuant to any of the
foregoing laws or regulations or any state law or regulation regarding Hazardous
Substances. To the Actual Knowledge of Seller, it has obtained, maintained, and
complied in all material respects with all permits, licenses and other approvals
required under any Environmental Laws.
Section 5.15. No Brokers.
Except for Marcus & Millichap Real Estate Investment Brokerage
Company, the fees and expenses of which will be paid by Seller, Seller has not
entered into any agreement, arrangement or understanding with any person or firm
which will result in the obligation to pay any finder's fee, brokerage
commission or similar payment in connection with the transactions contemplated
hereby.
Section 5.16. No Adverse Parties In Possession.
There are no adverse or other parties in possession of the
Facility, except for residents pursuant to the Unit Leases and tenants pursuant
to the Tenant Leases.
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Section 5.17. Casualty and Condemnation.
There is no unrepaired casualty damage to the Facility and
there is no pending or, to the Actual Knowledge of Seller, threatened eminent
domain or condemnation proceedings, with respect to the Facility or any portion
thereof.
Section 5.18. Unit Leases.
Except for Unit Leases listed on Exhibit C, Seller is not a
party to or bound by any Unit Lease. Except as disclosed on Exhibit C, each Unit
Lease listed thereon is a valid and binding obligation of Seller and the tenant
thereunder. Except as disclosed in Schedule 5.18, Seller has not received any
written notice of default or notice of the intention of any party to any such
Unit Lease to terminate such Unit Lease. Complete and correct copies of all Unit
Leases referred to in Exhibit C, together with all modifications and amendments
thereto, have been delivered to Purchaser. Attached to Exhibit C is a true and
complete list of the Unit Leases and a true and correct copy of the current
standard form of Unit Leases. There are no material undisclosed amendments or
agreements to such Unit Leases, nor any special rates, services or concessions
promised to any resident of the Facility except as disclosed in the Unit Leases
and the rent rolls attached hereto. The Unit Leases comply in all material
respects with all applicable municipal, county, state and federal laws,
regulations, ordinances and orders and with all applicable municipal health and
building laws.
Section 5.19. Insurance.
Attached as Schedule 5.19 hereto is a list of all insurance
coverage maintained by Seller, or by the Manager for the direct benefit of
Seller, as of the date hereof in connection with the Facility and the operation
thereof. All such insurance coverage is in full force and effect (with no
overdue premium) in the amounts set forth on Schedule 5.19.
Section 5.20. Employment Matters.
(a) Nothing in this Agreement shall obligate the Purchaser to employ or
offer employment to any person.
(b) Seller shall be responsible for any and all costs, obligations or
liabilities involving employees of or consultants to the Business
incurred on or prior to the Closing Date.
(c) Seller shall indemnify, defend and hold Purchaser harmless from and
against any and all claims, actions, suits, demands, proceedings,
losses, expenses, damages, obligations and liabilities (including costs
of collection, attorney's fees and other costs of defense) arising out
of or otherwise in respect of any claim or suit by any employee or
former employee of the Business arising out of conditions, actions, or
events occurring on or prior to the Closing Date.
Section 5.21. Suppliers, No Illegal Payments, Etc.
Seller has not: (a) directly or indirectly given or agreed to
give any illegal gift, contribution, payment or similar benefit to any supplier,
customer, governmental official or employee or other person who was, is or may
19
be in a position to help or hinder Seller (or assist in connection with any
actual or proposed transaction) or refer any resident or made or agreed to make
any illegal contribution, or reimbursed any illegal political gift or
contribution made by any other person, to any candidate for federal, state,
local or foreign public office which might subject Seller to any damage or
penalty in any civil, criminal or governmental litigation or proceeding or the
non-continuation of which has had or might have any effect on the Facility; or
(b) established or maintained any unrecorded fund or asset or made any false
entries on any books or records for any purpose.
Section 5.22. Tenant Leases.
Schedule 5.22 sets forth a true and accurate list of all
Tenant Leases, and all amendments or modifications to, and side letters
modifying in any material respect the terms thereof. Each Tenant Lease is in
full force and effect in accordance with the terms thereof; each represents the
entire agreement between the parties thereto with respect to the occupancy of
the portion of the Facility occupied thereunder. Neither Seller nor any
Affiliate has given or received any written notice claiming the existence of any
default under any Tenant Lease, which default remains uncured. As of the date of
this Agreement, no party to any Tenant Lease has paid rent or fees for more than
one month in advance or claims or is entitled to any offset against such
amounts. Seller has delivered to Purchaser true and complete copies of the
Tenant Leases and all amendments, modifications and letter agreements relating
thereto. No tenant improvements, concessions, abatements, allowances or leasing
concessions are due and unpaid under any Tenant Lease.
Section 5.23. Business Names.
Schedule 5.23 sets forth a true and accurate list of the
Business Names.
Section 5.24. Governmental Bonds and Deposits.
Schedule 5.24 sets forth a true and accurate list of the
Governmental Bonds and Deposits.
Section 5.25. Exclusive Representations and Warranties.
Other than the representations and warranties set forth
herein, Seller is not making any other representation or warranty, express or
implied, with respect to the Business or the Acquired Assets.
Article VI. REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller as follows:
Section 6.1. Purchaser's Organization; Good Standing.
Purchaser is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Purchaser or, if this Agreement is assigned, the Permitted Assignee will be duly
qualified to conduct business as a foreign corporation in the State of New York
on the Closing Date. Purchaser has all requisite power and authority to carry on
its business as it is currently being conducted.
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Section 6.2. Authority, Execution and Delivery.
Purchaser has the requisite power and authority to enter into
this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by Purchaser and the consummation of
the transactions contemplated hereby have been duly and validly authorized. This
Agreement has been duly executed and delivered by Purchaser and, assuming the
due authorization, execution and delivery of this Agreement by Seller,
constitutes the legal, valid and binding obligation of Purchaser, enforceable
against Purchaser in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
other similar laws affecting creditors' rights generally from time to time in
effect and to general principles of equity (including, without limitation,
concepts of materiality, reasonableness, good faith and fair dealing) regardless
of whether considered in a proceeding in equity or at law.
Section 6.3. Consents; No Violations, Etc.
The execution and delivery of this Agreement do not, and the
consummation of the transactions contemplated hereby and the compliance with the
terms hereof will not (i) violate any applicable law, (ii) conflict with any
provision of the certificate of formation or the limited liability company
agreement of Purchaser or (iii) require any approval, authorization, consent,
license, exemption, filing or registration with any court, arbitrator or
Governmental Entity, except for such approvals, authorizations, consents,
actions or filings which have been obtained or made or which, if not obtained or
made, would not materially interfere with Purchaser's performance of its
obligations hereunder.
Section 6.4. Litigation.
As of the date hereof, there is no suit, claim, action,
investigation or proceeding pending or threatened in writing against or
affecting Purchaser which if adversely determined would be reasonably expected
to prevent or materially delay the ability of Purchaser to perform its
obligations hereunder.
Section 6.5. No Brokers.
Purchaser has not entered into any agreement, arrangement or
understanding with any person or firm which will result in the obligation to pay
any finder's fee, brokerage commission or similar payment in connection with the
transactions contemplated hereby.
Section 6.6. ERISA.
Purchaser is not acquiring the Acquired Assets with the assets
of any "employee benefit plan" as defined in Section 3(3) of ERISA.
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Article VII. CERTAIN COVENANTS AND AGREEMENTS
Section 7.1. Covenants of Seller Relating to Conduct of Business.
During the period from the date of this Agreement and
continuing until the Closing, Seller agrees (except as expressly provided in
this Agreement or the Disclosure Schedule, or to the extent that Purchaser shall
otherwise consent in writing) that:
(a) Ordinary Course. Seller shall carry on the Business and operate the
Acquired Assets in the ordinary course in substantially the same manner
as presently conducted, maintain the business records of the Business
in substantially the same manner as presently maintained and use
reasonable efforts to preserve intact the Business' present business
organization, keep available the services of the Business' present
employees and preserve the Business' relationships with residents,
customers, suppliers and others having business dealings with the
Business; provided, however, that nothing contained herein shall be
deemed to require the expenditures of any funds outside the ordinary
course of business.
(b) No Dispositions. Seller shall not sell, lease, encumber, or
transfer, or agree to sell, lease, or transfer, any of the Acquired
Assets, except Business Inventory in the ordinary course of business
and entering into new Unit Leases for Units which are presently vacant
or which may become vacant or renewing or extending Unit Leases, in the
ordinary course of business consistent with prior practice. Seller
shall put all vacant units in "rent ready" condition.
(c) No Material Contracts. Seller shall not enter into any Contract
providing for the payment by Seller, individually or in the aggregate,
of an amount greater than $10,000 without the prior written consent of
Purchaser (which consent shall not be unreasonably withheld).
(d) Other Actions. Seller shall not knowingly take any action that
would reasonably be expected to result in any of the representations
and warranties of Seller set forth in this Agreement becoming untrue in
any material respect or in any of the conditions of the Closing set
forth in Article IX not being satisfied.
(e) Advise of Changes. Seller shall advise Purchaser within three
business days after Seller becomes of any matter or event that occurs
after the date hereof and on or prior to the Closing Date which is
material to the Business.
Section 7.2. Purchaser's Access to Information.
Seller shall afford to Purchaser and its accountants, counsel
and other representatives reasonable access upon reasonable advance notice and
during normal business hours during the Due Diligence Period to all the
properties, books, contracts, commitments, Tax Returns and records of the
Business (other than the Excluded Assets) (the "Due Diligence Materials").
Purchaser acknowledges that any information being provided to it or its
representatives by Seller pursuant to this Agreement is subject to the terms of
a confidentiality agreement between Purchaser and Seller, dated December 17,
2001 (the "Confidentiality Agreement"), which terms are incorporated herein by
reference.
Section 7.3. Purchaser's Preservation of Records.
Purchaser agrees that, at its own expense, it shall use
reasonable efforts to preserve and keep the Files and Records for a period of
three years from the Closing Date, or for any longer periods as may be required
by any Governmental Entity. Upon the prior written request of Seller, Purchaser
shall provide Seller with reasonable access during normal business hours to the
Files and Records delivered to Purchaser by Seller. All information received or
retained by Seller or any representative of Seller pursuant to this Section 7.3
shall be treated as confidential by Seller and by such representatives and,
except to the extent such information is or becomes generally available, Seller
and its representatives shall use all reasonable efforts to maintain the
confidentiality of such information. If Seller or any of its representatives is
22
required to disclose any such information by or to any Governmental Entity,
Seller shall, prior to such disclosure, notify Purchaser of such requirement.
Purchaser shall have the right, at its own expense, to seek confidential
treatment of any information to be so disclosed.
Section 7.4. Legal Conditions to Closing.
Each of Seller and Purchaser agrees to take all reasonable
actions necessary to comply promptly with all legal requirements which may be
imposed on it with respect to the Closing, and shall cooperate with and furnish
information to each other and to other parties in connection with any such legal
requirements.
Section 7.5. Collection of Receivables.
From and after the Closing, Purchaser shall have the right and
authority to collect for its own account all accounts receivable and other items
that are included in the Acquired Assets and to endorse with the name of Seller
any checks or drafts received with respect to any such accounts receivable or
other items. Seller agrees to deliver to Purchaser any cash or other property
received directly or indirectly by it with respect to such accounts receivables
and other items after the Closing.
Section 7.6. Expenses.
Whether or not the Closing occurs, except as set forth in this
Agreement, the following costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid as follows:
(a) By the Seller: (i) any real property transfer, or similar Taxes
applicable to the conveyance and transfer from Seller to Purchaser of
the Acquired Assets and (ii) any other transfer or documentary Taxes or
any filing or recording fees and related expenses applicable to such
conveyance and transfer (including filing fees and related expenses
with respect to the transfer of the Facility to Purchaser); and
23
(b) By the Purchaser: (i) any sales Taxes payable in connection with
the transfer of Personal Property, (ii) title insurance premiums, and
(iii) due diligence costs of Purchaser, and (iv) legal fees of
Purchaser, and (v) estimated mortgage recording tax in connection with
the Initial Financing.
Seller shall provide Purchaser with a credit at Closing in an
amount equal to $642,500 to cover a portion of Purchaser's Closing Costs.
Seller shall prepare and timely file all returns and other
documents required in connection with any such sales Taxes foregoing and shall
provide Purchaser with evidence of filing of such returns and documents and
payment of such sales, use, transfer, stamp, documentary and similar Taxes
promptly thereafter.
Section 7.7. Financial Information.
After the Closing, upon reasonable written notice, Purchaser
and Seller shall furnish or cause to be furnished to each other and their
respective accountants, counsel and other representatives reasonable access,
during normal business hours, to such information (including records pertinent
to the Business) and assistance relating to the Business as is reasonably
necessary for financial reporting and accounting matters, the preparation and
filing of any returns, reports or forms or the defense of any Tax audit,
proceeding, claim or assessment.
Section 7.8. Bulk Transfer Laws.
Purchaser hereby waives compliance by Seller with the
provisions of any so-called "bulk transfer law" of any jurisdiction in
connection with the sale of the Acquired Assets to Purchaser. Seller shall
indemnify and hold harmless Purchaser against any and all liabilities, excluding
Assumed Liabilities, that may be asserted by third parties against Purchaser as
a result of noncompliance with any such bulk transfer law.
Section 7.9. Actions of Seller and Purchaser.
Neither Seller nor Purchaser shall knowingly take any action
that would reasonably be expected to result in any of the representations or
warranties made by such party set forth in this Agreement becoming untrue in any
material respect or in any of the conditions of the Closing set forth in Article
IX not being satisfied.
Section 7.10. Intentionally Deleted.
Section 7.11. Maintenance; Repair; Risk of Loss.
(a) Until the Closing, Seller shall maintain the Facility in
substantially its present condition, subject to ordinary wear and tear.
Notwithstanding the foregoing, Seller shall have no obligation to make
any structural repairs or capital improvements.
(b) Prior to the Closing, the risk of loss or damage (except ordinary
wear and tear) by fire or other casualty to the Facility, and the risk
of condemnation of the Facility, is on Seller. In case of damage beyond
ordinary wear and tear or a condemnation, (i) if the estimated cost to
repair the damage or restore to substantially the condition existing
before the casualty or condemnation shall be less than $1,000,000, if
24
the estimated time to repair the damage or restore is less than 60
days, and such loss or damage does not have a Material Adverse Effect
Seller may, at Seller's option, elect to proceed to Closing and assign
to Purchaser the proceeds of any insurance or award applicable to such
casualty or condemnation, or proceed promptly to repair and restore, at
Seller's expense, such damage in a good and workmanlike manner, using
equivalent materials, in which case the Closing shall be adjourned,
pending completion of such repair and restoration, or (ii) in any other
case, either party may terminate this Agreement upon written notice to
the other given within five (5) business days of obtaining Actual
Knowledge of such casualty or condemnation. In the event of such
termination, the Deposit shall be refunded to Purchaser and neither
party shall have any further obligations hereunder. Purchaser may
preserve this Agreement following receipt of a termination notice from
Seller by notifying Seller, in writing, within five (5) business days
of Seller's election to terminate, of Purchaser's election to purchase
the Property in its damaged condition without abatement of Purchase
Price (but with an assignment from Seller of all insurance and/or
condemnation proceeds). Notwithstanding any other provision of this
Agreement, if there is an adjournment of the Closing Date by Seller
pursuant to this Section 7.11(b), the Closing Date shall be on any
business day selected by Purchaser after substantial completion of
restoration on ten (10) days' notice to Purchaser, provided that if the
Facility is not substantially restored within 60 days of the loss or
damage, Purchaser shall have the right to terminate this Agreement. In
the event of such termination, the Deposit shall be refunded to
Purchaser and neither party shall have any further obligations
hereunder.
Section 7.12. Title Matters.
(a) Title to the Land and Buildings shall be good and insurable at
ordinary rates on an A.L.T.A. owner's policy (the "Title Policy") by
the Title Company, and shall be conveyed in such condition to the
Purchaser at Closing subject only to the Permitted Exceptions and those
matters waived by the Purchaser pursuant to this Section 7.12 and with
(i) the requirements of Section 1 of Schedule B of the Title Commitment
fully satisfied, (ii) the standard printed exceptions set forth therein
deleted (except for the exceptions for tenants as tenants only set
forth on an attached rent roll and any state of facts shown on a survey
obtained by the Purchaser provided such state of facts does not have a
Material Adverse Effect), (iii) affirmative coverage for mechanics and
materialmen's liens, and (iv) A.L.T.A endorsements Nos. 1 (Owner's
Comprehensive) and endorsements for survey, public access and other
endorsements customarily obtained for similar properties in Erie
County, New York. The matters disclosed by the Title Commitment to
which Purchaser has noted its objection are identified as such on the
Title Commitment and are referred to as "Unpermitted Title Exceptions."
(b) As to Unpermitted Title Exceptions which can be cured by the
payment of a liquidated sum (e.g. mortgage loans, mechanics' liens,
judgment and tax liens) or by the filing of a release, termination or
other document, the Seller shall be obligated to pay or otherwise
discharge and/or file the same at Closing.
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(c) As to Unpermitted Title Exceptions which can not be cured by the
payment of a liquidated sum or by a filing as contemplated under
paragraph (b), the Seller shall notify the Purchaser at least ten (10)
days prior to the expiration of the Due Diligence Period whether the
Seller (i) will cause the same to be discharged at Closing or cause the
same to be deleted or insured over by the Title Company in form and
substance reasonably acceptable to the Purchaser (whereupon the Seller
will be obligated to do so) or (ii) will not so cause the same to be
discharged, deleted or insured over. The Seller's failure to respond
shall constitute the Seller's election to proceed under clause (ii).
(d) If the Seller notifies the Purchaser pursuant to paragraph (c) that
the Seller will not cause an Unpermitted Title Exception to be
discharged at Closing, the Purchaser shall notify the Seller within
five (5) days after receipt of the Seller's response of the Purchaser's
election, in its sole discretion, either (i) to accept title subject to
such Unpermitted Title Exception(s) as the Seller shall have declined
to cure, in which event the Purchase Price shall be equitably reduced
by an amount reasonably estimated by the Purchaser and the Seller as
necessary to cure such items (but in an amount not to exceed $200,000
in the aggregate), or (ii) receive a prompt refund of the Deposit
whereupon this Agreement shall terminate. The Purchaser's failure to
respond shall constitute the Purchaser's election to proceed under
clause (i).
Section 7.13. Tenant Security Deposits.
Seller hereby indemnifies and agrees to defend Purchaser
against any claims made pursuant to ss.7-107 or ss.7-108 of the New York General
Obligations Law (the "GOL") by tenants who resided in the Facility on or prior
to the Closing Date other than (a) claims with respect to tenants' security
deposits paid, credited or assigned to Purchaser pursuant to Section 9.2
(c)(iii) hereof, (b) claims made pursuant to ss.7-107 of the GOL with respect to
funds for which Seller was not liable, and (c) claims made pursuant to ss.7-108
of the GOL by tenants to whom Purchaser failed to give the written notice
specified in ss.7-108(c) of the GOL within thirty days after the Closing Date.
The foregoing indemnity and agreement shall survive the Closing and shall be in
lieu of any escrow permitted by ss.7-108(d) of the GOL, and Purchaser hereby
waives any right it may have to require any such escrow. From and after the
Closing, Purchaser shall indemnify and hold harmless the Seller and Manager
against any claims made by tenants with respect to security deposits paid,
credited or assigned to Purchaser pursuant to Section 9.2(c)(iii) hereof. The
foregoing indemnity by Purchaser shall survive the Closing.
Section 7.14. NO REPRESENTATIONS BY SELLER.
OTHER THAN AS EXPRESSLY SET FORTH IN THIS AGREEMENT, SELLER
HAS NOT MADE AND DOES NOT MAKE ANY REPRESENTATIONS OR WARRANTIES AS TO THE
PHYSICAL OR ENVIRONMENTAL CONDITION, LAYOUT, LEASES, FOOTAGE, RENTS, INCOME,
EXPENSES, ZONING, OPERATIONS, OR ANY OTHER MATTER OR THING AFFECTING OR RELATING
TO THE FACILITY, INCLUDING, WITHOUT LIMITATION, THE ENVIRONMENTAL CONDITION
THEREOF. PURCHASER ACKNOWLEDGES THAT NO SUCH REPRESENTATIONS HAVE BEEN MADE
OTHER THAN AS SPECIFICALLY SET FORTH IN THIS AGREEMENT AND AGREES UPON CLOSING
TO TAKE THE FACILITY "AS IS, WHERE IS" AND WITH ALL FAULTS, LATENT AND PATENT.
WITH RESPECT TO ANY ITEMS OF PERSONAL PROPERTY CONTAINED WITHIN THE FACILITY,
26
SELLER HAS NOT MADE AND DOES NOT MAKE ANY REPRESENTATIONS, PROMISES OR
WARRANTIES (EXPRESS OR IMPLIED AND WHETHER DEALING WITH MERCHANTABILITY, FITNESS
FOR USE OR OTHERWISE). PURCHASER HEREBY WAIVES, TO THE EXTENT PERMITTED BY LAW,
ANY AND ALL IMPLIED WARRANTIES. NO ORAL WARRANTIES, REPRESENTATIONS OR
STATEMENTS SHALL BE CONSIDERED A PART HEREOF. EXCEPT AS SET FORTH IN THIS
AGREEMENT, SELLER ASSUMES NO RESPONSIBILITY FOR THE CONDITION OF THE FACILITY OR
PERSONAL PROPERTY, HAS MADE NO REPRESENTATIONS WITH RESPECT THERETO AND SHALL
HAVE NO LIABILITY FOR THE ACCURACY OF ANY INSPECTION REPORT RELATING THERETO,
PURCHASER HEREBY ACKNOWLEDGING THAT PURCHASER HAS INSPECTED THE FACILITY AND
PERSONAL PROPERTY AND IS SATISFIED WITH THE CONDITION THEREOF, INCLUDING,
WITHOUT LIMITATION, THE ENVIRONMENTAL CONDITION OF THE FACILITY.
Section 7.15. Intentionally Deleted.
Section 7.16. Intentionally Deleted.
Article VIII. DUE DILIGENCE PERIOD
Section 8.1. Due Diligence Period.
(a) During the Due Diligence Period, Seller shall make available to
Purchaser and its representatives for review the Due Diligence
Materials in accordance with Section 7.2 hereof. In addition, during
the Due Diligence Period, the Purchaser may conduct such tests, studies
and evaluations of the Facility and its condition and operations as the
Purchaser, in its sole and absolute discretion deems appropriate, and
shall be given continuing access to the Facility after notice (which
may be by telephone, facsimile or otherwise) at all reasonable times
for such purposes. The Purchaser shall use commercially reasonable
efforts to minimize interruption with the conduct of the Business. The
Purchaser shall provide to the Seller upon the expiration of the Due
Diligence Period copies of third-party structural and/or environmental
reports, if any, conducted on behalf of the Purchaser if completed as
of such date. The Purchaser, at any time prior to 6:00 p.m. (Eastern
Standard Time) of the last day of the Due Diligence Period, TIME BEING
OF THE ESSENCE may elect for any reason or no reason not to acquire the
Acquired Assets by written notice to the Seller of such election, in
which event, the Deposit shall be refunded to the Purchaser and this
Agreement shall terminate. Purchaser's right to terminate this
Agreement pursuant to this Section 8.1(a) shall lapse on the expiration
of the Due Diligence Period in the event Purchaser fails to send such
written notice of termination and, in such event, Purchaser shall be
bound to perform under the provisions of this Agreement.
(b) The Purchaser shall not conduct or permit any physically invasive
testing or other inspection or due diligence (collectively, "Work") of,
on or under the Facility without first obtaining the Seller's written
consent as to the timing and scope of such Work to be performed (which
consent shall not unreasonably withheld or delayed). The Purchaser
27
agrees that in connection with entering onto the Facility to perform
work, the Purchaser and the Purchaser's agents, architects and
employees shall (1) obtain or be covered by liability insurance in an
amount not less than $1,000,000 per occurrence and, upon request of the
Seller, provide the Seller with written evidence of the same, (ii) not
unreasonably interfere with the activity of any tenants, guests,
employees, visitors or agents of the Seller or any Tenant or any other
persons at the Facility and (iii) restore promptly, at the Purchaser's
cost, any damages caused to the Facility by the Purchaser, its agents,
architects and employees.
(c) The Purchaser shall indemnify, defend and hold harmless the Seller
from and against any cost expense (including reasonable attorneys' fees
and disbursements, as incurred) loss, claim, liability or cause of
action whatsoever resulting solely from the Purchaser or the
Purchaser's agent's, employer's, architect's or representative's
performance of the Work. Such indemnity shall survive the Closing or
earlier termination of this Agreement for a period of one year.
Article IX. CONDITIONS PRECEDENT
Section 9.1. Conditions to Each Party's Obligations.
The obligation of Purchaser to purchase the Acquired Assets
and assume the Assumed Liabilities and the obligation of Seller to sell, assign,
convey and deliver the Acquired Assets to Purchaser shall be subject to the
satisfaction prior to the Closing of the following: no temporary restraining
order, preliminary or permanent injunction or other legal restraint or
prohibition preventing the consummation of the transactions contemplated by this
Agreement shall be in effect.
Section 9.2. Conditions to Obligations of Purchaser.
The obligation of Purchaser to purchase the Acquired Assets
and assume the Assumed Liabilities is subject to the satisfaction on and as of
the Closing of each of the following conditions:
(a) Representations and Warranties. The representations and warranties
of Seller set forth in this Agreement shall be true and correct
(without regard to any knowledge qualifiers) as of the Closing as
though made on and as of the Closing.
(b) Performance of Obligations of Seller. Seller shall have performed
or complied in all material respects with all obligations, conditions
and covenants required to be performed by it under this Agreement at or
prior to the Closing, and Purchaser shall have received a certificate
of Seller to such effect.
(c) Deliveries. NHP, as to Parcel I, and Nominee, as to Parcel II,
shall have executed and delivered to Purchaser. or to Purchaser's
designee as to Parcel I, (i) a statutory form of bargain and sale deed,
with covenants against grantor's acts, containing the covenant required
by Section 13 of the New York Lien Law for the real property included
28
in the Facility; (ii) a general assignment and ▇▇▇▇ of sale in
substantially the form set forth on Exhibit D hereto (the "General
Assignment and ▇▇▇▇ of Sale"); (iii) an assignment and assumption of
Unit Leases in substantially the form set forth on Exhibit E hereto;
(iv) an assignment and assumption of contracts, leases, and warranties
in substantially the form set forth on Exhibit F hereto; (v) schedule
of all security deposits (and the most recent reports with respect
thereto issued by each banking organization in which they are deposited
pursuant to GOLss.7-103) and a check or credit to Purchaser in the
aggregate amount of any cash security deposits, including any interest
thereon, held by Seller on the Closing Date; (vi) any required transfer
tax forms and affidavit; (vii) a non-foreign person affidavit sworn to
by Seller as required by Section 1445 of the Code; (viii) a certificate
as to the incumbency and signature of officers or other authorized
representatives of Seller, (ix) certified copies of the articles of
organization of Seller, and a copy of the general authorizing
resolutions of the board of Seller, certified as of the Closing Date by
the Secretary or an Assistant Secretary or other authorized
representative of such person, which authorize the execution, delivery
and performance by such person of this Agreement and all documents
contemplated hereby to which such person is a party, together with such
other documents and evidence with respect to Seller and as Purchaser
may reasonably request in order to establish the consummation of the
transactions contemplated by this Agreement, the taking of all
corporate proceedings in connection therewith and compliance with the
conditions herein set forth; transaction contemplated hereunder; (x)
all originals (or copies if originals are not available) of the Tenant
Leases, the Unit Leases, the Contracts, the Licenses and Permits, the
Files and Records and keys and lock combinations and/or security codes
with respect to the Facility; (xi) Closing Statement in form and
substance acceptable to Seller and Purchaser; (xii) such additional
documents to be executed by Seller as may be reasonably requested by
Purchaser in order to effectuate the transaction contemplated hereby
(including, without limitation, any other documents required under
applicable Legal Requirements to convey the Acquired Assets to the
Purchaser or to record any deed or any other conveyancing document);
(xiii) such evidence or documents as may be reasonably required by the
Title Company in order to delete pre-printed exceptions relating to:
(i) mechanics' or materialmen's liens; (ii) parties in possession;
(iii) the status and capacity of the Seller and the authority of the
person or persons who are executing the various documents on behalf of
the Seller in connection with the contribution of the Acquired Assets
and or the legal existence of the Seller and such other title
affidavits and indemnities required by the Title Company to enable the
Title Company to issue a title insurance policy as required hereby; and
(xiv) the Financing Escrow shall be delivered to the Escrow Agent.
(d) Management Agreement. The Management Agreement shall be cancelled
and of no further force and effect.
(e) Title Policy. The Purchaser shall have received the Title Policy in
accordance with Section 7.12.
29
Section 9.3. Conditions to Obligations of Seller.
The obligations of Seller to sell, assign, convey, and deliver
the Acquired Assets, or to cause the Acquired Assets to be sold, assigned,
conveyed or delivered, as applicable, is subject to the satisfaction on and as
of the Closing of each of the following conditions:
(a) Representations and Warranties. The representations and warranties
of Purchaser set forth in this Agreement shall be true and correct in
all material respects as of the Closing as though made on and as of the
Closing, except to the extent such representations and warranties
expressly relate to an earlier date (in which case such representations
and warranties shall be true and correct as of such earlier date), and
Seller shall have received a certificate signed by an authorized
officer of Purchaser to such effect.
(b) Performance of Obligations of Purchaser. Purchaser shall have
performed in all material respects all obligations required to be
performed by it under this Agreement at or prior to the Closing, and
Seller shall have received a certificate signed by an authorized
officer of Purchaser to such effect.
(c) Deliveries. Purchaser shall have executed and delivered (i) any
required transfer tax forms and affidavits, (ii) Purchaser Note A, and
(iii) Purchaser Note B.
Article X. TERMINATION, AMENDMENTS AND WAIVERS
Section 10.1. Termination.
(a) Notwithstanding anything to the contrary in this Agreement, this
Agreement may be terminated, and the transactions contemplated hereby
abandoned at any time prior to the Closing:
(i) by Purchaser by giving written notice to Seller pursuant
to Section 8.1(a);
(ii) by mutual written consent of Seller and Purchaser; or
(iii) by Seller if the Closing does not occur on or prior to
December 31, 2001 TIME BEING OF THE ESSENCE; so long as the
failure to Close is not the result of a default by Seller.
(b) In the event of termination by Seller, on the one hand, or
Purchaser, on the other hand, pursuant to this Section 10.1, written
notice thereof shall forthwith be given to the other party and the
Escrow Agent and the deposits made by Purchaser and interest earned
thereon shall be paid by Escrow Agent to Purchaser. If the transactions
contemplated by this Agreement are terminated as provided herein:
30
(i) Purchaser shall return all documents and other material
received from Seller relating to the Business and to the
transactions contemplated hereby, whether so obtained before
or after the execution hereof, to Seller; and
(ii) all confidential information received by Purchaser with
respect to Seller or the Business shall be treated in
accordance with the Confidentiality Agreement, which shall
remain in full force and effect notwithstanding the
termination of this Agreement.
(c) If this Agreement is terminated and the transactions contemplated
hereby are abandoned, this Agreement shall become null and void and of
no further force and effect, except for the provisions of the last
sentence of Section 7.2 and the provisions of Sections 7.6, 10.1, 12.7,
12.8 and 12.9. Nothing in this Section 10.1 shall be deemed to release
any party from any liability for any breach by such party of the terms
and provisions of this Agreement.
Section 10.2. Amendments and Waivers.
This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto. By an instrument in
writing, Purchaser, on the one hand, or Seller, on the other hand, may waive
compliance by the other party with any term or provision of this Agreement that
such other party was or is obligated to comply with or perform.
Article XI. INDEMNIFICATION
Section 11.1. Indemnification by Seller.
(a) Seller hereby agrees to indemnify Purchaser and its Affiliates and
their respective officers, directors and employees (the "Purchaser
Indemnified Parties") against, and agrees to hold them harmless from,
any Loss to the extent such Loss arises from or in connection with the
following:
(i) any breach by Seller of any representation or warranty
contained in this Agreement or any other agreement or
documents delivered in connection herewith,
(ii) any breach by Seller of any of its covenants contained in
this Agreement;
(iii) any and all claims made by third parties arising out of
the operation of the Business or the Acquired Assets by Seller
prior to the Closing Date; or
(iv) any Excluded Liability.
Notwithstanding the foregoing, the indemnifications in favor of the
Purchaser Indemnified Parties contained in this Section 11.1 shall be
effective only as follows: (x) there shall be no indemnification in
respect of any Losses in an amount less than $50,000 in the aggregate;
and (y) there shall be no indemnification in respect of any Losses of
which notice has not been given to Seller that indemnification is
sought pursuant to this Section 11.1 during the period from the Closing
31
Date until the 365th day after the Closing Date (the "Twelve-Month
Period"); provided, however, that the foregoing limitations on Seller's
indemnification obligations pursuant to this Section 11.1 shall not
apply to any indemnification by Seller for any Losses asserted against,
imposed upon or incurred by the Purchaser Indemnified Parties resulting
from any Excluded Liability.
(b) Purchaser acknowledges and agrees that its sole and exclusive
remedy with respect to any and all claims relating to the subject
matter of this Agreement shall be pursuant to the indemnification
provisions set forth in this Article XI. The Escrowed Funds, other than
the Deposit, shall serve as security for Seller's obligations under
Agreement and the other documents being delivered in connection
herewith (the "Closing Documents"). The Indemnity Escrow shall survive
until December 31, 2002, at which time the Indemnity Escrow shall
terminate and the Indemnity Escrow and any interest earned thereon
shall be distributed to the Seller, and the Additional Indemnity Escrow
shall survive until September 30, 2002, at which time the Additional
Indemnity Escrow shall terminate and the Additional Indemnity Escrow
shall be distributed to the Seller, unless on or prior to either
termination date, Purchaser shall have given written notice to Seller
of a claim or claims for indemnification in accordance with the
provisions of Section 11.6 hereof or any other claim under this
Agreement or any Closing Document, in which case the amounts claimed
shall remain in escrow until such claims shall have been determined in
accordance with the provisions of this Article XI or by a court of
competent jurisdiction.
In furtherance of the foregoing and to secure the
indemnification obligations of Seller to Purchaser, Purchaser shall
have the right to set off against any amounts that may be due and
payable to Seller pursuant to Purchaser Note A or Purchaser Note B an
amount (the "Offset Amount") equal to any amounts for which Seller
shall be obligated to pay to Purchaser pursuant to the provisions of
this Agreement or any Closing Document. Such right to set off against
amounts due and payable to Seller pursuant to Purchaser Notes A and B
shall only apply if the amount of the claim at the time it is asserted
exceeds the amount of the Indemnity Escrow.
Following the assertion of a claim in accordance with the
provisions of Section 11.6(a) or any other claim under this Agreement
or any Closing Document, Purchaser shall nonetheless be obligated to
make all payments under Purchaser Note A and Purchaser Note B as and
when due to Seller, except the Offset Amount shall be paid to the
Escrow Agent and held in escrow until the claim shall have been
determined in accordance with the provisions of this Article XI or by a
court of competent jurisdiction. In furtherance of the foregoing,
Purchaser hereby waives, to the fullest extent permitted under
applicable law, any and all rights, claims and causes of action it may
have against Seller arising under or based upon any Governmental Rule.
32
Section 11.2. Indemnification by Purchaser.
(a) Purchaser hereby agrees to indemnify Seller and its Affiliates and
their respective officers, general partners, limited partners,
directors, officers and employees (the "Seller Indemnified Parties")
against, and agrees to hold them harmless from, any Loss to the extent
such Loss arises from or in connection with:
(i) any breach by Purchaser of any representation or warranty
contained in this Agreement or any other agreement or document
delivered in connection herewith;
(ii) any breach by Purchaser of any covenant contained in this
Agreement;
(iii) any and all claims made by third parties arising out of
the operation of the Business by Purchaser after the Closing
Date; or
(iv) any Assumed Liability.
Notwithstanding the foregoing, the indemnifications in favor of the
Seller Indemnified Parties contained in this Section 11.2 shall be
effective only as follows: (x) there shall be no indemnification in
respect of any Losses in an amount less than $50,000 in the aggregate;
and (y) there shall be no indemnification in respect of any Losses of
which notice has not been given to Purchaser that indemnification is
sought pursuant to this Section 11.2 during the Twelve-Month Period;
provided, however, that the foregoing limitations on Purchaser's
indemnification obligations pursuant to this Section 11.2 shall not
apply to any indemnification by Purchaser for any Losses asserted
against, imposed upon or incurred by the Seller Indemnified Parties
resulting from any Assumed Liability.
(b) Seller acknowledges and agrees that its sole and exclusive remedy
with respect to any and all claims relating to the subject matter of
this Agreement shall be pursuant to the indemnification provisions set
forth in this Article XI. In furtherance of the foregoing, Seller
hereby waives, to the fullest extent permitted under applicable law,
any and all rights, claims and causes of action it may have against
Purchaser arising under or based upon any Governmental Rule.
Section 11.3. Defaults.
(a) Seller Default. If Seller shall default in its obligation to convey
the Acquired Assets to Purchaser in accordance with the terms of this
Agreement, then Purchaser, at its option, may (i) terminate this
Agreement, in which event Escrow Agent shall refund to Purchaser, the
Deposit and neither party shall thereafter have any further rights or
obligations hereunder, (ii) bring an action against Seller for specific
performance, and (iii) seek actual damages.
(b) Purchaser Default. If Purchaser shall default in its obligation to
close in accordance with this Agreement, the parties hereto agree that
Seller's sole and exclusive remedy shall be to terminate this Agreement
and retain the Deposit as liquidated damages. Upon such termination,
neither party to this Agreement shall have any further rights or
obligations. It is expressly understood and agreed that in the event of
Purchaser's default, Seller's damages would be impossible to ascertain
and that the Deposit constitutes a fair and reasonable amount of
compensation in such event and in no event shall the delivery of the
Deposit be construed as punitive damages.
33
Section 11.4. Losses Net of Insurance.
(a) The amount of any Loss for which indemnification is provided under
this Article XI shall be net of any amounts recovered or recoverable by
the indemnified party under insurance policies with respect to such
Loss.
(b) Seller agrees to maintain, or cause to be maintained, the existing
director and officer and corporate liability insurance coverage that
currently names and covers the officers and directors of Seller and the
general partner of Seller.
Section 11.5. Termination of Indemnification.
The obligations to indemnify and hold harmless any party, (a)
pursuant to Sections 11.1(a)(i) and 11.2(a)(i), shall terminate when the
applicable representation or warranty terminates pursuant to Section 12.3 and
(b) pursuant to the other clauses of Sections 11.1 and 11.2, shall not
terminate.
Section 11.6. Procedure.
(a) In order for an indemnified party (the "indemnified party") to be
entitled to any indemnification provided for under this Agreement, such
indemnified party shall, following the discovery of the matters giving
rise to any Loss, notify the indemnifying party (the "indemnifying
party") in writing of its claim for indemnification for such Loss,
specifying in reasonable detail the nature of such Loss and the amount
of the liability estimated to accrue therefrom; provided, however, that
failure to give such notification shall not affect the indemnification
provided hereunder except to the extent the indemnifying party shall
have been actually prejudiced as a result of such failure (except that
the indemnifying party shall not be liable for any expenses incurred
during the period in which the indemnified party failed to give such
notice. Thereafter, the indemnified party shall deliver to the
indemnifying party, within five business days after the indemnified
party's receipt of such notice, all information and documentation
reasonably requested by the indemnifying party with respect to such
Loss.
(b) If the indemnification sought pursuant hereto involves a claim made
by a third party against the indemnified party (a "Third-Party Claim"),
the indemnifying party shall be entitled to participate in the defense
of such Third-Party Claim and, if it so chooses, to assume the defense
of such Third-Party Claim with counsel selected by the indemnifying
party and reasonably acceptable to the indemnified party. Should the
indemnifying party so elect to assume and diligently and continuously
engage in the defense of a Third-Party Claim, the indemnifying party
shall not be liable to the indemnified party for any legal expenses
subsequently incurred by the indemnified party in connection with the
defense thereof. If the indemnifying party assumes such defense, the
indemnified party shall have the right to participate in the defense
34
thereof and to employ counsel, at its own expense, separate from the
counsel employed by the indemnifying party, it being understood that
the indemnifying party shall control such defense. The indemnifying
party shall be liable for the fees and expenses of counsel employed by
the indemnified party for any period during which the indemnifying
party has not assumed and diligently and continuously engaged in the
defense thereof (other than during any period in which the indemnified
party shall have failed to give notice of the Third-Party Claim as
provided above). If the indemnifying party chooses to defend or
prosecute a Third-Party Claim, all of the parties hereto shall
cooperate at the expense of the indemnifying party in the defense or
prosecution thereof. Such cooperation shall include the retention and
(upon the indemnifying party's request) the provision to the
indemnifying party of records and information which are reasonably
relevant to such Third-Party Claim, and making employees available on a
mutually convenient basis to provide additional information and
explanation of any material provided hereunder. If the indemnifying
party chooses to defend or prosecute any Third-Party Claim, the
indemnifying party shall have the right to enter into any settlement,
compromise or discharge of such Third-Party Claim which by its terms
obligates the indemnifying party to pay the full amount of the monetary
liability in connection with such Third-Party Claim and that does not
otherwise involve the admission of wrongdoing, or civil or criminal
penalties or fines or injunctive relief by or against the indemnified
party. Whether or not the indemnifying party shall have assumed the
defense of a Third-Party Claim, the indemnified party shall not admit
any liability with respect to, or settle, compromise or discharge, such
Third-Party Claim without the indemnifying party's prior written
consent, which shall not be unreasonably withheld or delayed.
Article XII. GENERAL PROVISIONS.
Section 12.1. Notices.
All notices, requests and other communications hereunder shall
be in writing and shall be sent, delivered or mailed, addressed, or faxed as
follows:
(a) if to Seller to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Capital Senior Living Corporation
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Capital Realty Group Senior
Housing, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which shall not constitute notice) to:
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
35
(b) if to Purchaser to:
BRE/Amberleigh Inc.
c/o Blackstone Real Estate Advisors
The Blackstone Group
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Managing Director
facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which shall not constitute notice) to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(c) if to Escrow Agent:
Fidelity National Title Insurance Company of New York
▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇
facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Each such notice, request or other communication shall be given (1) by hand
delivery, (ii) by certified mail, (iii) by nationally recognized courier
service, or (iv) by facsimile. Each such notice, request or communication shall
be effective when delivered at the address specified in this Section 12.1 (or in
accordance with the latest unrevoked direction from the receiving party).
Section 12.2. Headings.
The table of contents and headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 12.3. Survival of Representations and Warranties.
All representations and warranties of Seller and Purchaser
contained herein or made pursuant hereto shall survive the Closing Date for a
period of twelve (12) months after the Closing Date. Any right of
indemnification pursuant to Article XI hereof with respect to a claimed breach
of a representation or warranty shall expire at the date of termination of the
representation or warranty claimed to be breached (the "Termination Date"),
36
unless on or prior to the Termination Date the party from whom indemnification
is sought shall have received written notice of a claim with respect thereto
with the specificity required in accordance with the provisions of Section 11.6
herein.
Section 12.4. Severability.
If any provision of this Agreement, or the application thereof
to any person, place or circumstances, shall be held by a court of competent
jurisdiction to be invalid, unenforceable, or void, the remainder of this
Agreement and such provisions as applied to other persons, places, and
circumstances shall remain in full force and effect; provided, however, that in
the event that the terms and conditions of this Agreement are materially altered
as a result of this paragraph, the parties hereto will renegotiate the terms and
conditions of this Agreement to resolve any inequities.
Section 12.5. Counterparts.
This Agreement may be executed in one or more counterparts,
all of which shall be considered one and the same agreement and shall become
effective when one or more counterparts have been signed by each of the parties
and delivered to the other parties, it being understood that all parties need
not sign the same counterpart.
Section 12.6. Entire Agreement; No Third-Party Beneficiaries.
This Agreement and the Confidentiality Agreement constitute
the entire agreement and supersedes all prior agreements and understandings,
both written and oral, among the parties hereto with respect to the subject
matter hereof. Except as specifically provided herein or therein, such
agreements are not intended to confer upon any person other than the parties
hereto any rights or remedies hereunder or thereunder.
Section 12.7. Governing Law.
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, regardless of the laws that
might otherwise govern under applicable principles of conflicts of law.
Section 12.8. Consent to Jurisdiction.
Each of Purchaser and Seller irrevocably submits to the
non-exclusive jurisdiction of any New York state court and any Federal Court
located in the State of New York, and appellate courts therefrom, for the
purposes of any suit, action or other proceeding arising out of this Agreement
or any transaction contemplated hereby. Each of Purchaser and Seller further
agrees that service of any process, summons, notice or document by U.S.
registered mail to such party's respective address set forth in Section 12.1
shall be effective service of process for any action, suit or proceeding in New
York with respect to any matters to which it has submitted to jurisdiction as
set forth above in the immediately preceding sentence. Each of Purchaser and
Seller irrevocably and unconditionally waives any objection to the laying of
venue of any action, suit or proceeding arising out of this Agreement or the
transactions contemplated hereby in any New York state court and any Federal
Court located in the State of New York and hereby further irrevocably and
37
unconditionally waives and agrees not to plead or claim in any such court that
any such action, suit or proceeding brought in any such court has been brought
in an inconvenient forum.
Section 12.9. Publicity.
Prior to the Closing Date, Seller agrees to provide Purchaser
with a copy of any Current Report on Form 8-K that it may file with the
Securities and Exchange Commission pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 regarding the transactions contemplated by this
Agreement prior to filing for Purchaser's reasonable comment with respect to any
description of the Purchaser contained therein. Except as may be required by
applicable securities laws upon the advice of counsel, neither Seller, on the
one hand, nor Purchaser, on the other hand, shall issue or cause the publication
of any press release or other public announcement with respect to the
transactions contemplated by this Agreement without the consent of the other
party, which consent shall not be unreasonably withheld.
Section 12.10. Assignment.
Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto without the
prior written consent (which consent shall not be unreasonably withheld) of the
other parties. Notwithstanding the generality of the foregoing, Purchaser may
assign all of its rights and obligations pursuant to this Agreement to a
Permitted Assignee of Purchaser. A "Permitted Assignee" shall be an Affiliate of
Purchaser or any public or private fund where Purchaser is either the fund
manager or managing partner (including any entity controlled directly or
indirectly by the private equity fund known as the Blackstone Group).
Notwithstanding any assignment by Purchaser of this Agreement to a Permitted
Assignee, Purchaser shall not be discharged or released from its executory
obligations under this Agreement.
[SIGNATURE PAGES FOLLOW]
38
IN WITNESS WHEREOF, Purchaser and Seller have caused this
Agreement to be signed by their respective parties thereunto duly authorized,
all of the date first written above.
SELLER:
------
NHP RETIREMENT HOUSING PARTNERS I L.P.,
a Delaware limited partnership
By: Capital Realty Group Senior Housing, Inc.,
a Texas corporation, its general partner
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
Amherst Limited Partnership,
a New York Limited Partnership
By: NHP Retirement Housing Partners I
Limited Partnership,
a Delaware limited partnership,
its general partner
By: Capital Realty Group Senior
Housing, Inc., a Texas corporation,
its general partner
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
PURCHASER
BRE/AMBERLEIGH INC.,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice-President
39
AS TO SECTION 3.1, SECTION 3.2,
SECTION 10.1(b) AND SECTION 11.1(b):
ESCROW AGENT
FIDELITY NATIONAL TITLE INSURANCE COMPANY
OF NEW YORK
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice-President
40
EXHIBIT A
LEGAL DESCRIPTION OF LAND
Not included.
EXHIBIT B
TITLE COMMITMENT
Not included.
EXHIBIT C
UNIT LEASES - RENT ROLL
Not included.
EXHIBIT D
GENERAL ASSIGNMENT AND ▇▇▇▇ OF SALE
KNOW ALL MEN BY THESE PRESENTS, that NHP Retirement Housing
Partners, I Limited Partnership, a Delaware limited partnership ("Seller"), for
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, does hereby sell,
assign, transfer and convey to BRE/AMBERLEIGH Inc., a Delaware corporation
("Purchaser"), its successors and assigns, all of Seller's right, title and
interest, legal or equitable, in and to any and all of the Acquired Assets (as
defined in the Asset Purchase Agreement dated as of December 27, 2001, between
Seller and Purchaser (the "Agreement")). Except as otherwise expressly provided
herein, the terms and phrases defined in the Agreement shall have the same
meaning when used herein.
IN WITNESS WHEREOF, the undersigned has caused these presents
to be duly executed on and as of the __ day of ___________, 2001.
NHP RETIREMENT HOUSING PARTNERS I
LIMITED PARTNERSHIP, a Delaware limited
partnership
By: Capital Realty Group Senior Housing,
Inc., a Texas corporation,
its general partner
By:
-------------------------------------
BRE/AMBERLEIGH INC.
By:
------------------------------------------
ATTEST:
By:
-----------------------------------------
EXHIBIT E
ASSIGNMENT AND ASSUMPTION OF UNIT LEASES
Not included.
EXHIBIT F
OMNIBUS ASSIGNMENT AND ASSUMPTION
Not included.
EXHIBIT G
PURSHASER NOTE A
Not included.
EXHIBIT H
PURCHASER NOTE B
Not included.
DISCLOSURE SCHEDULES
INTRODUCTION
Reference is made to the Asset Purchase Agreement (the "Agreement") dated as of
December 28, 2001 among NHP Retirement Housing Partners I Limited Partnership, a
Delaware limited partnership ("NHP"), Amherst Limited Partnership, a New York
limited partnership ("Nominee", together with NHP, "Seller"), and BRE/AMBERLEIGH
Inc. ("Purchaser"). Capitalized terms used herein and not otherwise defined
shall have the respective meanings ascribed to such terms in the Agreement.
This Disclosure Schedule is qualified in its entirety by reference to specific
provisions of the Agreement, and is not intended to constitute, and shall not be
construed as constituting, representations or warranties of Seller except as and
to the extent provided in the Agreement. Inclusion of information herein shall
not be construed as an admission that such information is material to the
operations or financial condition of the Business or required to be disclosed by
the Agreement.
Matters reflected in this Disclosure Schedule and the SEC Reports constituting a
part thereof are not necessarily limited to matters required by the Agreement to
be reflected in the Disclosure Schedule. Such additional matters are set forth
for information purposes and do not necessarily include other matters of similar
nature.
Any matter disclosed in one provision, subprovision, section or subsection
hereof is deemed disclosed for all purposes of this Disclosure Schedule to the
extent the Agreement requires such disclosure under such provision,
subprovision, section or subsection or under any other provision, subprovision,
section or subsection.
Headings have been inserted on the sections of the Disclosure Schedule for
convenience of reference only and shall to no extent have the effect of amending
or changing the express description of the Sections as set forth in the
Agreement.
The Disclosure Schedules are not included.