EXHIBIT 10.52
REAL ESTATE
PURCHASE AND SALE
AGREEMENT
between
BRENDENWOOD MRC LIMITED PARTNERSHIP, a Maryland limited partnership, as Seller
and
BROOKDALE LIVING COMMUNITIES, INC.,
a Delaware corporation, as
Purchaser
for
Brendenwood Retirement Community
One Brendenwood Drive
Voorhees, New Jersey
LISTS OF EXHIBITS AND SCHEDULES
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EXHIBIT A - LEGAL DESCRIPTION OF REAL PROPERTY
EXHIBIT B - RENT ROLL
EXHIBIT C - LICENSES AND PERMITS
EXHIBIT D - PERSONAL PROPERTY
EXHIBIT E - ESCROW AGREEMENT
EXHIBIT F - PERMITTED EXCEPTIONS
EXHIBIT G - SERVICE CONTRACTS
EXHIBIT H - BARGAIN AND SALE DEED WITH COVENANTS AGAINST GRANTOR'S ACTS
EXHIBIT I - ▇▇▇▇ OF SALE
EXHIBIT J - ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT K - LEASING STANDARDS
EXHIBIT L - FEASIBILITY MATERIALS
EXHIBIT M - UNDELIVERED FEASIBILITY MATERIALS
EXHIBIT N - VIOLATIONS OF GOVERNMENTAL REGULATIONS
TABLE OF CONTENTS
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Section Page
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1. Definitions, and Agreement of Sale and Purchase........................ 1
2. Purchase Price and ▇▇▇▇▇▇▇ Money....................................... 5
3. Purchaser's Pre-Closing Activities and Obligations..................... 5
4. Feasibility Period..................................................... 6
5. Conditions Precedent and Closing....................................... 8
6. Documents.............................................................. 9
7. Brokerage and Other Commissions........................................ 11
8. Prorations, Credits and Adjustments.................................... 12
9. Possession and Loss by Fire or Other Casualty.......................... 13
10. Title Insurance and Survey............................................ 14
11. Taking or Condemnation................................................ 16
12. Seller's Covenants.................................................... 17
13. Remedies.............................................................. 18
14. Representations and Warranties of Purchaser........................... 20
15. Representations and Warranties of Seller.............................. 21
16. Notices............................................................... 24
17. No Assignment......................................................... 25
18. Miscellaneous......................................................... 26
REAL ESTATE PURCHASE
AND SALE AGREEMENT
------------------
THIS REAL ESTATE PURCHASE AND SALE AGREEMENT is made as of the 1st day of
October, 1997, by and between BRENDENWOOD MRC LIMITED PARTNERSHIP, a Maryland
limited partnership, (said partnership being herein referred to as "Seller") and
BROOKDALE LIVING COMMUNITIES, INC., a Delaware corporation (said corporation
being herein referred to as "Purchaser"), in consideration of, subject to and in
accordance with the following terms, covenants and conditions.
1. Definitions, and Agreement of Sale and Purchase.
-----------------------------------------------
1.01 Any initially capitalized term herein used, exclusive of proper names,
shall have the meaning assigned to such term in this Agreement, unless the
context otherwise expressly states.
1.02 In addition to the terms which may be elsewhere defined in this Agreement,
each of the following terms, whenever in this Agreement used, shall have the
meaning set forth in this Section 1.02:
"Agreement" means this Agreement and all the Exhibits and Schedules
attached to and made a part of this Agreement;
"Agreement Date" means the later of the dates upon which Seller and
Purchaser have caused this Agreement to be executed as evidenced by the
dates set forth below their signatures on the last page of this Agreement;
"Authorities" means any governmental or quasi-governmental body or agency
having jurisdiction over the Property and/or Seller including, without
limitation, the United States, the State of New Jersey, the Township of
▇▇▇▇▇▇▇▇ and the County of Camden;
"Appurtenances" means all rights, privileges and easements appurtenant to
the Land, including, without limitation, all minerals and oil, gas and
other hydrocarbon substances on and under the Land; development rights; air
rights; easements; rights of way; sidewalks; and all other appurtenances
used in connection with the beneficial use and enjoyment of the Land; and
all existing licenses, consents, easements, rights of way and approvals
required from private parties to make use of utilities and to insure
vehicular and pedestrian ingress and egress to the Real Property;
"Business Day" means each day other than Saturday, Sunday and legal
holidays in the State of New Jersey or Illinois;
"Closing" means the consummation of the transaction contemplated by this
Agreement;
"Closing Date" means (a) the later of (i) the date thirty (30) days after
the expiration of the Feasibility Period, as such date may be extended
pursuant to Section 5.02, or (ii) the date ten (10) Business Days after the
issuance to Purchaser of any Regulatory Licenses by the New Jersey
Department of Health (the "Department"), and/or the transfer to Purchaser
of the Regulatory Licenses approved by the Department, but in any event no
later than December 31, 1997, or (b) such other date to which Seller and
Purchaser may hereafter mutually agree in writing; provided, however, that
if any or all of Sections 13.01 or 13.02 hereafter become operative, the
Closing Date shall be determined in accordance with the provisions of
whichever of said Sections is operative or, if more than one of said
Sections are operative, the provisions of the Section which renders the
latest date;
"Feasibility Period" means a period commencing on the Agreement Date and
ending on the thirtieth (30th) day thereafter as may be extended pursuant
to Section 4.02;
"Governmental Regulations" means any applicable laws, ordinances, rules,
and regulations (including, without limitation, those relating to land use,
subdivision, zoning, environmental, toxic or hazardous wastes, the
Americans with Disabilities Act, occupational health and safety, and
building and fire codes) of any of the Authorities bearing on the
construction, alteration, rehabilitation, maintenance, use, operation, or
development of the Property;
"Improvements" means all buildings, fixtures, structures, parking areas,
landscaping and other improvements constructed and located on the Real
Property, including, but not limited to, a 149-unit congregate living
facility known as Brendenwood Retirement Community;
"Intangible Property" means all of Seller's interest in the assignable
intangible property consisting of: (a) any and all Licenses and Permits and
other approvals in effect on the Closing Date and necessary for the current
use and operation of the Real Property; (b) any and all warranties,
contractual rights, rebates and indemnities or other rights used or owned
in connection with the ownership or operation of the Real Property; and (c)
telephone numbers, trade names, including the name "Brendenwood Retirement
Community", and other assignable intangible property owned or used in
connection with the ownership or use of the Real Property;
"Land" means the parcel or parcels of land legally described on Exhibit A
attached hereto and made a part hereof, consisting of approximately 5.04
acres;
"Leases" means those leases, residency, occupancy and ancillary agreements
listed on Exhibit B attached to and made a part of this Agreement and any
such agreements entered into by Seller in respect of the Property after the
date of this Agreement and prior to the Closing Date pursuant to Section
12.01;
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"Licenses and Permits" means all licenses, permits, certificates of
occupancy, approvals, dedications, subdivision maps and entitlements
issued, approved or granted by Authorities to Seller in connection with the
ownership, use and operation of the Real Property including, without
limitation, those Licenses and Permits listed on Exhibit C attached hereto
and made a part hereof;
"Person", which may be expressed in the singular or plural form, means (a)
any individual, corporation, association, limited liability company,
cooperative business trust, estate, trust or partnership, (b) any two or
more of the entities described in clause (a) having a joint or common
interest or enterprise, (c) any governmental or quasi-governmental body,
authority or agency, or (d) any other legal entity;
"Personal Property" means all furniture, furnishings, equipment and other
tangible personal property owned by Seller that is located at the Real
Property and used in connection with the management, operation or repair of
the Real Property, including, without limitation, those items of personal
property listed on Exhibit D attached to and made a part of this Agreement;
"Permitted Exceptions" means all (a) exceptions to title to the Real
Property described on Exhibit E attached hereto and made a part hereof, (b)
exceptions to title to the Real Property created prior to the Closing Date
with the prior written consent of Purchaser, (c) the Leases, (d) acts done
or suffered by, and judgments against, Purchaser or any Person claiming by,
through or under Purchaser, (e) those Unpermitted Exceptions which are
accepted by Purchaser pursuant to Section 10.05, (f) those Unpermitted
Exceptions which are insured or endorsed over pursuant to Sections 10.03
and 10.04, and (g) those exceptions to title occurring or arising pursuant
to Section 11.02;
"Property" means, collectively or severally, as the context requires, the
Real Property, the Personal Property, the Intangible Property, the Service
Contracts and the Records and Plans;
"Purchaser's Affiliates" means any Person controlling, controlled by or
under common control with Purchaser, it being agreed that, for the purposes
hereof, the concept of control shall mean, in the case of an individual,
any relationship based on marriage or blood and, in all cases, any
relationship based on ownership or voting rights in excess of ten percent
(10%) of the equity of the Person or on the ability to direct, by
affirmative or negative action or by omission, the business and affairs of
the Person;
"Purchaser's Default", which may be expressed in the singular or plural
form, means any failure in the payment, performance or observance of or in
compliance with any of the covenants, agreements, representations,
warranties and obligations of Purchaser under this Agreement in any
material respect;
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"Purchaser's Group" means Purchaser and all the directors, officers,
employees, agents and independent contractors of Purchaser;
"Real Property" means the Land, together with the Improvements and the
Appurtenances;
"Records and Plans" means, to the extent in the possession or control of
Seller or any of Seller's Group, (a) all financial and other books and
records maintained by Seller in connection with the operation of the
Property, (b) all preliminary, final and proposed building plans and
specifications (including "as-built" drawings) respecting the Improvements,
and (c) all structural reviews, architectural drawings and engineering,
environmental, soils, seismic, geologic and architectural reports, studies
and certificates and other similar documents pertaining to the Property;
"Regulatory Licenses" has the meaning set forth in clause (i) of Section
5.01 hereof;
"Seller's Default", which may be expressed in the singular or plural form,
means any failure in the payment, performance or observance of or in
compliance with any of the covenants, agreements, representations,
warranties and obligations of Seller under this Agreement in any material
respect;
"Seller's Group" means collectively Seller and all the partners, members,
directors, officers, employees, agents, and independent contractors of
Seller at any time and from time to time;
"Service Contracts" means those design contracts, space planning contracts,
construction contacts, subcontracts and purchase orders, utility contracts,
water and sewer service contracts, maintenance contracts, equipment leases
and management contracts, to which Seller is a party, which relate to the
Property, which Purchaser has elected to assume (or is deemed to have
elected to assume) pursuant to the terms of this Agreement and which are
listed on Exhibit E;
"Title Insurer" means Lawyer's Title Insurance Corporation; and
"Unpermitted Exceptions" means the exceptions to title to the Real
Property, other than Permitted Exceptions.
1.03 Seller hereby agrees to sell and to convey, assign and transfer to
Purchaser, and Purchaser hereby agrees to purchase from Seller, the Property,
subject to and in accordance with the terms and conditions, representations,
warranties and agreements set forth in this Agreement.
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2. Purchase Price and ▇▇▇▇▇▇▇ Money.
2.01 Purchaser agrees to pay or cause to be paid to Seller, as the purchase
price (the "Purchase Price") for the Property, the sum of Fifteen Million Seven
Hundred Fifty Thousand and No/100 Dollars ($15,750,000.00) plus or minus net
prorations, adjustments and credits as herein provided, which shall be paid and
satisfied at the Closing in cash by wire transfer or other immediately available
funds.
2.02 Purchaser shall, within two (2) Business Days following the Agreement
Date, deliver to the Title Insurer the sum of One Hundred Thousand and No/100
Dollars ($100,000.00) as ▇▇▇▇▇▇▇ money to be held by the Title Insurer, at its
office in Chicago, Illinois, in escrow pursuant to the terms of an Escrow
Agreement substantially in the form attached hereto as Exhibit G and made part
hereof, which shall be increased by an additional Two Hundred Fifty Thousand and
No/100 Dollars ($250,000.00) within two (2) Business Days following the
expiration of the Feasibility Period (the sum on deposit at any time with the
Title Insurer pursuant to this Section 2.02, together with the earnings thereon
is herein referred to as the "▇▇▇▇▇▇▇ Money").
2.03 The ▇▇▇▇▇▇▇ Money shall be invested and, together with any earnings
thereon, shall be, if necessary, reinvested, by the Title Insurer in a money
market account, or such other investments designated by Purchaser. Unless
otherwise expressly herein provided, the ▇▇▇▇▇▇▇ Money shall, at the Closing, be
paid to Purchaser.
3. Purchaser's Pre-Closing Activities and Obligations.
3.01 From and after the Agreement Date until the Closing or earlier termination
of this Agreement, Purchaser's Group, or any of them, shall have the right and
license to enter on the Real Property at any time, and from time to time, after
reasonable notice to Seller, for the purpose of conducting (a) surveys
(topographical, boundary and geological), (b) soil borings and tests, (c)
traffic, engineering, hydrological and drainage studies, (d) environmental
studies, (e) engineering and structural studies of the Improvements, (f)
appraisals, and (g) such other tests, inspections and studies as Purchaser shall
deem necessary to determine the feasibility of the Property (all of the
foregoing together with such other activities described in Section 4 being
herein collectively referred to as "Purchaser's Pre-Closing Activities").
3.02 Purchaser's Pre-Closing Activities shall be exercised and conducted, in
all respects, in a commercially reasonable manner by Purchaser's Group in
compliance with all Governmental Regulations.
3.03 (i) Purchaser shall, at Purchaser's expense, promptly cause (a) all
borings resulting from Purchaser's Pre-Closing Activities to be plugged or
capped in a safe manner, (b) all Property, if any, damaged or destroyed by
Purchaser's Group, or any of them, to be
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repaired, restored or replaced and (c) all debris, if any, resulting from
or in connection with Purchaser's Pre-Closing Activities to be removed
from the Property.
(ii) Purchaser's Group shall exercise the rights of entry herein granted
to Purchaser's Group in a manner so as not to unreasonably disturb or
interfere with any of the tenants or occupants under the Leases
("Tenants").
3.04 Purchaser hereby agrees to pay, and to indemnify, protect, save, defend
and hold forever harmless, Seller from and against all liabilities, obligations,
claims, damages, judgments, awards, penalties, costs and expenses, including,
without limitation, court costs, expert witness fees and reasonable attorneys'
fees and expenses at trial and on appeal, which Seller may incur, suffer or
sustain, or for which Seller may become obligated or liable by reason of:
(i) any injury to or death of persons or loss of or damage to property in
connection with, or as a result of, any entry or entries upon, or use of,
the Property by Purchaser's Group, or any of them; and
(ii) any labor or services performed or any materials furnished by or for
the account or benefit, or at the sufferance, of Purchaser in respect of
the Property.
3.05 Purchaser shall, within two (2) Business Days of the Agreement Date,
provide Seller with evidence of public liability and property loss insurance
covering Purchaser's Pre-Closing Activities and naming Seller as an additional
insured.
4. Feasibility Period.
4.01 This Agreement and the obligations of Purchaser hereunder are subject to
and conditioned upon Purchaser, at its own expense, being satisfied, in its sole
discretion, with its "Feasibility Review" (as such term is defined below) during
the Feasibility Period.
4.02 No later than five (5) Business Days following the Agreement Date, Seller
shall make available to Purchaser at the office of the Purchaser in Chicago,
Illinois, or at Purchaser's election, at the offices of Seller where such items
are kept, each of the following items (individually or collectively, as the
context may require, the "Feasibility Materials") in respect of the Property for
review by Purchaser and its consultants and independent contractors
("Feasibility Review"):
(i) copies of all Leases, together with a current copy the rent roll in
the form attached hereto as Exhibit B;
(ii) copies of the Service Contracts;
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(iii) copies of the tax bills and value renditions with respect to the
Property for the current tax year and the three (3) prior tax years and
copies of all notices and documents for any assessments with respect to the
Property for the current tax year and the three (3) prior tax years;
(iv) existing survey of the Property;
(v) copies of all existing title policies insuring title to the Property;
(vi) copies of operating statements, prepared on a monthly basis, for the
calendar years 1995 and 1996, and corresponding year-to-date information
for calendar year 1997, showing current income and expense items,
itemization of all capital expenditures made during the respective periods
and a schedule of all employees employed by Seller in the operation of the
Property, setting forth the terms of any contract with them;
(vii) copies of all Records and Plans;
(viii) a list and copies of the Licenses and Permits and a copy of any
notice of any statute or code violation pertaining to the Property,
including any documents pertaining to the resolution thereof;
(ix) the Commitment to be delivered in accordance with Section 10.01;
(x) the Survey to be delivered in accordance with Section 10.01; and
(xi) the other items described on Exhibit L attached hereto.
If Seller fails to deliver any of the Feasibility Materials within said 5
Business Day Period specified above, then the Feasibility Period shall be
extended one day for each day beyond said 5 Business Day Period that Seller
fails to deliver the Feasibility Materials. Purchaser acknowledges that only
those items described on Exhibit M attached hereto have not been delivered to
Purchaser as of the Agreement Date.
4.03 At any time during the Feasibility Period, Purchaser may terminate this
Agreement for any reason by the delivery of written notice to Seller, on or
before the last day of the Feasibility Period, of Purchaser's election to
terminate this Agreement. If Purchaser fails to give notice as required in this
Section 4.03 on or before the last day of the Feasibility Period, then Purchaser
shall be deemed to have elected to waive such condition.
4.04 If Purchaser elects to terminate this Agreement in accordance with
Section 4.03, Seller shall cause the ▇▇▇▇▇▇▇ Money to be returned to Purchaser,
and Seller and Purchaser shall be
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released from their respective obligations and liabilities under this Agreement,
subject to Section 18.14 hereof.
4.05 At any time, and from time to time, during the Feasibility Period,
Purchaser may elect not to assume one or more of the Service Contracts, which
election shall be made by the delivery of written notice to Seller, in which
event, Seller shall terminate on or before the Closing Date, at no cost or
expense to Purchaser, all Service Contracts which Purchaser has elected not to
assume. Purchaser shall be deemed to have elected to assume all Service
Contracts with respect to which Purchaser has not delivered written notice
pursuant to this Section 4.05.
4.06 The Feasibility Materials shall remain the sole property of the Seller
until Closing. If Closing does not occur for any reason, Purchaser shall return
all of the Feasibility Materials to Seller at the earliest practicable time and
shall not retain any copies thereof. Purchaser acknowledges that Seller
considers the Feasibility Materials to be confidential and proprietary and
agrees not to disclose the Feasibility Materials to any Person except (i) for
those employees, agents, professionals and financial sources consulted by
Purchaser in connection with the transaction contemplated by this Agreement,
(ii) to any governmental agencies or authorities in connection with the issuance
and/or transfer of the Regulatory Licenses or (iii) as required by law,
ordinance or court order. Purchaser shall be liable to Seller for violation of
the confidentiality provisions set forth herein, including the violation of such
provisions by any Person with whom Purchaser shares the Feasibility Materials.
5. Conditions Precedent and Closing.
--------------------------------
5.01 The following shall be additional conditions precedent to Purchaser's
obligation to perform under this Agreement:
(i) On or before December 15, 1997, Purchaser shall have received from
the Department (a) all licenses, or (b) the approval of the transfer of all
of Seller's licenses, necessary to operate the facility as an assisted
living facility (the "Regulatory Licenses");
(ii) Prior to the expiration of the Feasibility Period, (a) Seller
shall have filed a resale form and paid all applicable fees to the ▇▇▇▇▇▇▇▇
Township Zoning Administrative Officer (the "Zoning Officer") together with
a copy of the approved site plan and verification that the site plan has
been delivered to Purchaser and (b) Purchaser shall file an application for
zoning permit #2 with the Zoning Officer together with the applicable
$25.00 fee, and (c) the Zoning Officer shall have issued a certificate of
conformance for the Property without exception or exclusion;
(iii) At the Closing, the Title Insurer shall be ready, willing and
able to issue the owner's policy of the title insurance described in
Section 10.02 hereof;
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(iv) At Closing, there shall be no existing Seller's Defaults not
previously waived in writing by Purchaser; and
(v) All of Seller's representations and warranties contained herein
and in any other written documents delivered by or on behalf of Seller
pursuant to the terms of this Agreement are true and correct in all
material respects when made and shall be true and correct as of the Closing
Date.
Purchaser may, at Purchaser's sole option, elect to waive any of the foregoing
conditions precedent to performance of its obligations hereunder by giving
written notice to Seller of such election at any time on or before the Closing
Date. If Purchaser elects to waive any such conditions precedent, this Agreement
shall continue in full force and effect. If any of the foregoing conditions are
not satisfied or waived on or before the date specified, Purchaser shall give
written notice to Seller, on or before the date specified, of its election to
terminate this Agreement. If Purchaser fails to give notice on or before the
date specified, then the conditions hereunder shall be deemed satisfied or
waived and this Agreement shall continue in full force and effect. If this
Agreement is terminated pursuant to this Section 5.01, Purchaser shall be
entitled to the immediate refund of the ▇▇▇▇▇▇▇ Money, and Seller and Purchaser
shall be released from their respective obligations and liabilities under this
Agreement except as otherwise provided in Section 18.14 hereof, and each party
shall bear its own expenses incurred in connection with this Agreement.
5.02 Purchaser shall use commercially reasonable efforts to obtain the transfer
or issuance of the Regulatory Licenses and Seller shall use all commercially
reasonable efforts in cooperating with Purchaser in order to fulfill the
condition precedent set forth in clause (i) of Section 5.01 by completing such
requests and applications necessary to obtain the Regulatory Licenses. Such
cooperation shall include, at the request of Purchaser, Seller agreeing to
transfer the existing Regulatory Licenses to Purchaser or causing the holder of
the existing Regulatory Licenses to transfer such Regulatory Licenses to
Purchaser, and promptly completing and filing with the appropriate authority, or
causing the holder of the existing Regulatory Licenses to promptly complete and
file with the appropriate authority, without any out-of-pocket expense to
Seller, such forms, documents and other information as may be necessary to cause
and effect the transfer of the existing Regulatory Licenses to Purchaser. In
addition, Seller covenants and agrees to complete all alterations and
improvements to the Improvements necessary for the issuance of the Regulatory
Licenses on or before December 15, 1997. If such alterations and improvements
are not so completed, Purchaser may, at its election, terminate this Agreement
as provided in Section 5.01, or withhold from the Purchase Price a sum
reasonably estimated by Purchaser to complete such alterations and improvements.
Upon completion of such alterations and improvements, Purchaser shall pay any
excess amounts to Seller. The Closing Date may be extended, at Purchaser's
option by its written notice to Seller given at least ten (10) Business Days
prior to the then scheduled Closing Date, for two (2) consecutive thirty (30)
day periods in order to fulfill the condition precedent set forth in clause (i)
of Section 5.01 above, subject to Purchaser's further rights to terminate this
Agreement upon the expiration of the period of any such extension if all such
conditions have not then been satisfied or waived.
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5.03 The obligations of Seller to perform under this Agreement are subject to
and conditioned upon the absence of any existing Purchaser's Defaults not
previously waived in writing by Seller. Seller may, at Seller's sole option,
elect to waive this condition precedent to performance of its obligations
hereunder by giving written notice to Purchaser of such election at any time on
or before the Closing Date. If Seller elects to waive any such conditions
precedent, this Agreement shall continue in full force and effect.
5.04 The Closing shall occur on the Closing Date at the offices of the Title
Insurer in Chicago, Illinois, or at any other mutually agreeable location.
6. Documents.
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6.01 Unless otherwise herein expressly provided, Seller shall, at Closing,
deliver or cause to be delivered, to the Title Insurer (with copies to Purchaser
or counsel to Purchaser) the originals of the following documents:
(i) Bargain and Sale Deed With Covenants Against Grantor's Acts, in
the form attached to and made a part of this Agreement as Exhibit H
("Deed"), executed by Seller, conveying to Purchaser fee simple title to
the Real Property subject only to the Permitted Exceptions;
(ii) ▇▇▇▇ of Sale, in the form attached to and made a part of this
Agreement as Exhibit I, executed by Seller, conveying title to the Personal
Property to Purchaser;
(iii) Affidavit, in the customary form of the Title Insurer executed by
Seller, as to matters pertaining to parties in possession and mechanic's
liens and other matters reasonably requested by the Title Insurer;
(iv) Assignment and Assumption Agreement, in the form attached to and
made a part of this Agreement as Exhibit J ("Assignment and Assumption
Agreement"), executed by Seller, assigning and transferring to Purchaser,
all the right, title and interest of Seller in and to the Leases, the
Intangible Property, the Service Contracts and the Records and Plans;
(v) Completed declarations or statements, executed by or on behalf of
Seller, in the form prescribed by any applicable governmental authority to
be filed in connection with the payment of the documentary stamp or
transfer tax imposed on the transfer of title to the Property;
(vi) The originals or, if originals are not available, true and correct
copies thereof as certified by Seller, of all Leases together with notices
addressed to each and all of the Tenants of the change in ownership of the
Property and place of payment of rent;
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(vii) Non-foreign affidavit, in form sufficient to evidence the non-
foreign exemption provided under Section 1445(f)(3) of the Internal Revenue
Code, executed by an officer of Seller;
(viii) Counterpart of the "Closing Statement" (as such term is
defined in Section 8.05) executed by Seller or its counsel.
6.02 Unless otherwise herein expressly provided, Purchaser shall, at the
Closing, deliver or cause to be delivered to the Title Insurer (with copies to
Seller or counsel to Seller) the originals of the following documents:
(i) The Purchase Price;
(ii) Affidavit, in customary form of the Title Insurer, executed by
Purchaser as to matters pertaining to parties in possession and mechanics'
liens;
(iii) Counterpart of the Assignment and Assumption Agreement executed
by Purchaser;
(iv) Counterpart of the Closing Statement executed by Purchaser or
its counsel; and
(v) Completed declarations or statements, executed by or on behalf of
Purchaser in the form prescribed by any applicable governmental authority
to be filed in connection with the payment of the documentary stamp or
transfer tax imposed on the transfer of title to the Property.
6.03 Seller shall deliver or cause to be delivered to the custody of Purchaser
on or before the Closing:
(i) Building supplies, keys and card keys appropriately tagged for
identification with an accounting of keys known by Seller to be in the
possession of others, and other items comprising the Personal Property;
(ii) Originals of all Service Contracts and any warranties or guaranties
received by Seller from any contractors, subcontractors, suppliers or
materialmen in connection with any construction, repair or alternation of
the Improvements;
(iii) Originals or if originals are not available, certified copies of the
Records and Plans;
(iv) Originals of all Licenses and Permits;
(v) Originals of all Leases; and
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(vi) All books and records (or copies thereof) relating to the
operation and maintenance of the Property prior to the Closing Date.
7. Brokerage and Other Commissions.
-------------------------------
7.01 Seller hereby warrants to Purchaser that none of Seller's Group has dealt
with any Person, other than Marcus & Millichap of Fort ▇▇▇, New Jersey (the
"Broker"), who would be entitled to the payment of a brokerage commission,
finder's fee or other similar compensation in connection with the transaction
hereby contemplated on account of the acts or omissions of Seller's Group or any
of them. Seller agrees to pay, and to indemnify, defend, protect and hold
forever harmless Purchaser from and against, any and all losses, costs, damages,
expenses and liabilities, including, without limitation, court costs, expert
witness fees and reasonable attorneys' fees and expenses at trial and on appeal,
which Purchaser may incur, suffer or sustain, or for which Purchaser may become
liable or obligated, by reason of or in connection with any right, claim, demand
or damage made or asserted by any Person or Persons, including, without
limitation, the Broker, for the payment of a brokerage commission, finder's fee
or other similar compensation on account of the acts or omissions of Seller's
Group, or any of them, in connection with the transaction hereby contemplated.
Seller agrees to pay the Broker a commission pursuant to a separate agreement
between Seller and Broker.
7.02 Purchaser hereby warrants to Seller that none of Purchaser's Group has
dealt with any Person, other than the Broker, who would be entitled to the
payment of a brokerage commission, finder's fee or other similar compensation in
connection with the transaction hereby contemplated on account of acts or
omissions of Purchaser's Group, or any of them. Purchaser agrees to pay, and to
indemnify, defend, protect and hold forever harmless Seller's Group from and
against, any and all losses, costs, damages, expenses and liabilities,
including, without limitation, court costs, expert witness and reasonable
attorneys' fees and expenses at trial or on appeal, which Seller's Group, or any
of them, may incur, suffer or sustain, or for which Seller's Group, or any of
them, may become liable or obligated, by reason of or in connection with any
right, claim, demand or damage made or asserted by any Person or Persons other
than the Broker for the payment of a brokerage commission, finder's fee or other
similar compensation on account of the acts or omissions of Purchaser's Group,
or any of them, in connection with the transaction hereby contemplated.
8. Prorations, Credits and Adjustments.
-----------------------------------
8.01 The following items in respect of the Property shall be prorated as of
11:59 p.m. of the day immediately preceding the Closing Date and adjusted at the
Closing:
(i) Subject to the provisions of Section 8.02, all general real
estate taxes and municipal assessments for public improvements which have
been completed as of the Closing Date attributable to the Property;
(ii) Subject to the provisions of Section 8.03, prepaid rents under
the Leases;
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(iii) Security deposits held under the Leases shall be credited to
Purchaser unless actually transferred;
(iv) Any other items required under this Agreement to be prorated
and adjusted at the Closing; and
(v) All other items of revenue and expense including all utilities,
which, by local custom and practice, are prorated or adjusted between
sellers and purchasers of real property similar in kind to the Property.
8.02 If, at the Closing Date, general real estate taxes for the current year are
not fixed, but the assessed value of the Property is available for the current
year, then general real estate taxes will be prorated based upon such assessment
and one hundred ten percent (110%) of the prior year's tax rate. If, at the
Closing Date, the current year's assessed valuation is not available, then
general real estate taxes will be prorated on the basis of one hundred ten
percent (110%) of the prior year's taxes. Purchaser and Seller shall reprorate
general real estate taxes upon receipt of the tax bills for the year in which
Closing occurs. This provision shall survive Closing.
8.03 As used in this Agreement, the term "rents" includes all rentals,
additional rentals and any other sums and charges payable under the Leases or in
the normal course by Tenants for services rendered in connection with the
occupancy of the Property by the Tenants. Delinquent rents for the period prior
to the Closing Date shall remain the property of Seller. Purchaser shall deliver
to Seller any rents, net of the costs of collection, received by Purchaser which
are properly allocable to rental periods occurring before the Closing Date. It
shall be conclusively presumed between Purchaser and Seller that all rents
received after the Closing Date from Tenants with rental delinquencies on the
Closing Date shall be applied as follows: (i) first, to rent then due and
payable to Purchaser (including any previously unpaid rent then due and payable
to Purchaser), (ii) second, to the delinquent rents of such Tenant attributable
to the calendar months prior to the Closing Date, and (iii) third, to future
rent due and payable to Purchaser.
8.04 (i) Seller shall pay (a) all intangible, documentary stamp, transfer,
recordation or other taxes imposed on or in connection with the Deed, (b)
the cost of the Survey, and (c) one-half (1/2) of the charges of the Title
Insurer for its service as escrow or closing agent.
(ii) Purchaser shall pay (a) the title insurance premium charged by
the Title Insurer to issue its owner's policy of title insurance pursuant
to Section 10.02, (b) the cost of recording and filing of the Deed, and (c)
one-half (1/2) of the charges of the Title Insurer for its service as
escrow or closing agent.
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(iii) Except as otherwise expressly provided, each of Seller and
Purchaser shall pay its costs, fees and expenses incurred or sustained in
connection with the negotiation and consummation of this Agreement and the
transaction hereby contemplated.
8.05 Seller shall prepare or cause to be prepared a statement showing all
prorations, adjustments and credits made and determined as provided in this
Agreement and shall deliver such statement to Purchaser at least three (3)
Business Days prior to the Closing Date. Such statement, after
review and approval by Purchaser (the "Closing Statement"), shall, at the
Closing, be executed and delivered by or on behalf of Seller and Purchaser.
9. Possession and Loss by Fire or Other Casualty.
---------------------------------------------
9.01 Seller shall, concurrently with the Closing, deliver or cause to be
delivered to Purchaser possession of the Property subject only to the rights of
the Tenants under the Leases.
9.02 If, at any time from and after the date of this Agreement and prior to the
Closing, the Property or any part thereof shall be damaged or destroyed by fire
or other casualty ("Casualty"), then in such event, Seller shall forthwith give
to Purchaser written notice thereof.
9.03 If any such Casualty shall occur, then, unless this Agreement is terminated
pursuant to Section 9.04, this Agreement shall remain in full force and effect
and Purchaser shall consummate the transaction hereby contemplated upon the
terms and conditions herein contained; provided that:
(i) If the proceeds of the insurance have not then been paid to or
for the benefit or account of, and received by, Seller, then Seller shall
assign and transfer or cause to be assigned and transferred, at the
Closing, to Purchaser all rights and interests of Seller to such proceeds
and Purchaser shall thereafter, at Purchaser's expense, bear all
responsibility for the negotiation, settlement and collection thereof and
Purchaser shall receive a credit against the Purchase Price for the
deductible under any such policy of insurance; or
(ii) If the insurance proceeds, or any part thereof, have been so paid
and received by Seller, then Seller shall, at the Closing, pay to
Purchaser, or give to Purchaser as a credit against the Purchase Price, an
amount equal to such award so paid and received plus the amount of the
deductible under any such policy of insurance.
9.04 In the event that at any time from and after the date of this Agreement and
prior to Closing, any Casualty occurs and by reason thereof, all the Property or
a material part thereof (the term "material" as here used shall be deemed to
refer to a Casualty requiring in excess of One Hundred Thousand and No/100
Dollars ($100,000.00) to repair or replace), then Purchaser
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may, at its election and upon written notice thereof given to Seller within
thirty (30) days after the date of the notice from Seller terminate this
Agreement, in which case Seller and Purchaser shall be released and discharged
of and from their respective obligations under this Agreement, subject to
Section 18.14 hereof, and except that (i) the ▇▇▇▇▇▇▇ Money shall be forthwith
returned to Purchaser, and (ii) Purchaser shall have no claim or right in and to
the proceeds of insurance resulting from any such Casualty.
10. Title Insurance and Survey.
--------------------------
10.01 Seller shall arrange for the delivery to Purchaser or counsel to
Purchaser within ten (10) days following the Agreement Date the following:
(i) a preliminary title report ("Commitment") committing the Title
Insurer to issue its owner's policy of title insurance covering title to
the Real Property, with extended coverage and with an ALTA 3.1 zoning
endorsement, an access endorsement, a survey endorsement, a contingency
endorsement (if applicable) and such other endorsements as Purchaser may
reasonably require together with copies of all documents referred to
therein; and
(ii) a current plat of survey ("Survey") of the Real Property prepared
by a licensed New Jersey land surveyor, certified to and for the benefit of
Seller, Purchaser and the Title Insurer as being prepared in accordance
with the Minimum Standard Detail Requirements for ALTA/ACSM Land Surveys
adopted in 1992, for an Urban Survey, with such Table A requirements as
Purchaser may reasonably require and certifying to such other matters as
Purchaser may reasonably require.
The Commitment shall be conclusive evidence of good and indefeasible title as
therein shown as to all matters to be insured by the policy of title insurance,
subject only to the exceptions, qualifications and limitations as therein
stated.
10.02 The obligation of Purchaser to close the transaction hereby contemplated
shall, in addition to other conditions herein stated, be subject to the
condition that, at the Closing, the Title Insurer be prepared to issue its
owner's policy of title insurance pursuant to the Commitment (and the Title
Insurer shall issue a new Commitment or update the existing Commitment to the
date of Closing to so insure), insuring title to the Real Property in Purchaser,
in an amount equal to the Purchase Price, subject only to the Permitted
Exceptions with the deletion of the standard exceptions customarily contained in
a commitment for an owner's policy of title insurance issued by the Title
Insurer and with such endorsements as Purchaser may reasonably require, by
notice to the Title Insurer and the Seller prior to the end of the Feasibility
Period.
10.03 If the Commitment shall disclose any Unpermitted Exceptions which
constitute interests, encumbrances or liens of definite or liquidated amounts
and such Unpermitted Exceptions may be discharged or satisfied by the payment of
money, then Seller shall discharge or satisfy the same (i) prior to the Closing,
by using its own funds or (ii) at the Closing, by using the Purchase
15
Price provided, however, that if any Unpermitted Exceptions constitute
mechanics' or materialmen's liens, then Seller may, at its election, provide, in
lieu of the discharge or satisfaction thereof, a bond in accordance with law
and, otherwise, in form and amount as may be required by the Title Insurer to
delete such Unpermitted Exceptions.
10.04 If the Commitment shall disclose any Unpermitted Exceptions which do not
constitute interests, encumbrances or liens of definite or liquidated amounts,
then, within five (5) Business Days following receipt of the last of the
Commitment or the Survey, Purchaser shall notify Seller of any Unpermitted
Exceptions disclosed in the Commitment or Survey and Seller shall have a period
ending on the date five (5) days before the expiration of the Feasibility Period
to cure or correct such Unpermitted Exceptions or, if Seller, after exercising
reasonable diligence, is unable to cure or correct any such Unpermitted
Exceptions, then, if available at a commercially reasonable cost, to cause the
Title Insurer to commit to insure Purchaser and all subsequent owners and
lenders of all or any part of the Property affected by any such Unpermitted
Exceptions, by affirmative endorsement reasonably satisfactory to Purchaser,
against any loss or damage resulting from any such Unpermitted Exceptions, all
at Seller's expense.
10.05 In the event that any Unpermitted Exceptions are not discharged or
satisfied as provided in Section 10.03 or cured or corrected or insured over as
provided in Section 10.04, then Seller shall give notice thereof to Purchaser at
or prior to the expiration of the period specified in Section 10.04 and
Purchaser may, upon notice thereof given to Seller on or before the Closing
Date, elect to (i) accept title to the Property, subject to the then
undischarged or unsatisfied, uncured or uncorrected, or uninsured Unpermitted
Exceptions in which case such Unpermitted Exceptions shall be deemed Permitted
Exceptions and the transaction hereby contemplated shall be consummated at the
Closing, without adjustment of the Purchase Price or payment of consideration of
any kind to Purchaser on account of such Unpermitted Exceptions, or (ii)
terminate this Agreement in which case Seller and Purchaser shall be released
and discharged of and from their respective obligations under this Agreement to
sell and purchase the Property and the provisions of Section 13.02(iii) shall be
operative and binding on Seller and Purchaser.
11. Taking or Condemnation.
----------------------
11.01 If, at any time from and after the Agreement Date and prior to the
Closing, Seller shall receive notice the Property or any part thereof shall be
taken or condemned under or pursuant to eminent domain proceedings ("Taking"),
then in such event, Seller shall forthwith give to Purchaser written notice
thereof.
11.02 If any such eminent domain proceedings shall be instituted or threatened,
then, unless this Agreement is terminated pursuant to Section 11.03, this
Agreement shall remain in full force and effect and Purchaser shall consummate
the transaction hereby contemplated upon the terms and conditions herein
contained; provided, however, that Seller shall only be obligated to convey to
Purchaser, and Purchaser shall accept (a) the Property less that portion so
taken or
16
condemned, and (b) title to the Property subject, in addition to other Permitted
Exceptions, to such exceptions thereto as may occur or arise by reason of such
Taking, and provided, further, that:
(i) If the condemnation award has not then been paid to or for the
benefit or account of, and received by Seller, then Seller shall assign and
transfer or cause to be assigned and transferred, at the Closing, to
Purchaser all rights and interests of Seller in the Property so taken or
condemned and in such award and Purchaser shall thereafter, at Purchaser's
expense, bear all responsibility for the negotiation, settlement and
collection thereof from the condemning authority; or
(ii) If the condemnation award, or any part thereof, has been so paid
and received by Seller, then Seller shall, at the Closing, pay to
Purchaser, or give to Purchaser as a credit against the Purchase Price, an
amount equal to such award so paid and received.
11.03 In the event that at any time from and after the date of this Agreement
and prior to the Closing, any eminent domain proceedings shall be instituted by
any public or quasi-public authority or utility company, then Purchaser may, at
its election and upon written notice thereof given to Seller within thirty (30)
days after receipt of Seller's notice pursuant to Section 11.01 terminate this
Agreement, in which case Seller and Purchaser shall be released and discharged
of and from their respective obligations under this Agreement, subject to
Section 18.14 hereof, and except that (i) the ▇▇▇▇▇▇▇ Money shall be forthwith
returned to Purchaser, and (ii) Purchaser shall have no claim or right in and to
the award or other proceeds resulting from any such eminent domain proceedings.
12. Seller's Covenants.
------------------
12.01 Seller covenants and agrees with Purchaser as follows:
(i) Seller shall not, without the prior written consent of Purchaser
in each instance, (a) modify, amend or terminate (except for material
breach or nonpayment of rent or other sums due) in any manner whatsoever,
any of the Leases, (b) consent to the assignment or subletting of any of
the Leases, or (c) enter into any new lease of the Property or any portion
thereof or extend or renew any existing Lease which is not on the standard
form of lease currently in use for the Property and which does not comply
with the Leasing Standards set forth in Exhibit K attached hereto and made
a part hereof (all such permitted leases shall be deemed to be included
within the term "Leases"); provided Seller may offer concessions to tenants
if such concessions will expire or be extinguished prior to Closing. If
Seller desires to take any of the actions described in clauses (a), (b) or
(c) of this Section 12.01(i), Seller shall so notify Purchaser. Purchaser
shall have five (5) Business Days from receipt of Seller's notice to object
in writing to any proposed action described in Seller's notice. If
Purchaser fails to notify Seller on a timely basis of any objections, it
shall be conclusively presumed that Purchaser consented to all of the
actions described in Seller's notice and Seller may immediately
17
implement such actions. If Purchaser notifies Seller of any objections to
the actions proposed in Seller's notice and thereafter Seller and Purchaser
cannot agree on a course of action within fifteen (15) Business Days of the
date of Purchaser's notice of objections, Seller shall not take any action
to which Purchaser has objected.
(ii) Seller shall not, without the prior written consent of Purchaser
in each instance, enter into any new commitments, contracts, licenses,
options or other agreements of any kind affecting or relating to the
Property except for agreements that are terminable on or before Closing
Date at no cost to Purchaser and Leases that are governed by Section
12.01(i).
(iii) If Seller removes any item of Personal Property prior to the
Closing Date, Seller shall substitute therefor an item of like kind and
comparable value.
(iv) Subject to the provisions of Articles 9 and 11 hereof, Seller
shall, between the date of this Agreement and the Closing Date, at Seller's
sole cost and expense, maintain the Property in good order, condition and
repair, reasonable wear and tear excepted, shall perform all work required
to be done by the landlord under the terms of the Leases, and shall make
all repairs, maintenance and replacements of the Improvements and any
Personal Property and otherwise operate the Property in the same manner as
before the making of this Agreement and as though Seller were retaining the
Property. Seller shall not make any alterations to the Property except as
required under the Leases. Seller shall not, after the date of this
Agreement, without in each case obtaining Purchaser's prior written consent
thereto, enter into, amend, terminate or permit the early termination of
any Service Contract which Purchaser has elected to assume or waive any
rights of Seller thereunder, or extend any Service Contract which Purchaser
has not elected to assume. The foregoing notwithstanding, Purchaser's
consent shall not be required for Seller to enter into, extend (including
by exercise of option) any Service Contract, provided the term of such
Service Contract does not extend beyond the Closing Date and does not
otherwise expose Purchaser to any liability.
(v) At all times prior the Closing Date, Seller shall maintain and pay
for fire and extended coverage insurance for the full replacement cost of
the Improvements and Personal Property and other casualty coverage and
public liability insurance in amounts no event less than the coverage in
effect on the date of this Agreement and/or as may be required under the
Leases and all Service Contracts.
(vi) Seller shall immediately notify Purchaser of any fact or other
circumstance which, if known by Seller on the Agreement Date or the Closing
Date, would render any representation or warranty of Seller incorrect or
incomplete.
(vii) Between the date of this Agreement and the Closing Date, Seller
shall keep all Licenses and Permits and the Regulatory Licenses in full
force and effect and operate the
18
Property or cause the Property to be operated, in compliance with all
Licenses and Permits and all Regulatory Licenses.
(viii) Without Purchaser's consent, Seller shall not (a) voluntarily
subject any right, title or interest in or to this Property to any
mortgage, pledge, lien or other hypothecation or encumbrance, or (b)
transfer, convey or assign any right, title or interest in or to all or
any portion of the Property.
12.02 Without limiting the provisions of Section 12.01 hereof, Seller will
at all times after the Agreement Date to and including the Closing Date operate
the Property in a manner consistent with the operation of the Property on the
date hereof.
13. Remedies.
--------
13.01 (i) If, prior to or at the Closing Date as determined without regard
to the provisions of Section 13.01(ii), a Purchaser's Default shall occur
or exist, then Purchaser shall have a period ("Purchaser's Curative
Period") expiring the earlier of the Closing Date or the fifth (5th)
Business Day after the date of such Purchaser's Default, to correct or
cure such Purchaser's Default.
(ii) In the event that Purchaser's Default is corrected or cured
within Purchaser's Curative Period, the Closing Date shall be the later
of (1) the date determined in Section 1.02 or (2) the tenth (10th)
Business Day following the date such Purchaser's Default has been cured
or corrected, or on such other date to which Seller and Purchaser shall
mutually agree in writing, provided that there are not other Purchaser's
Defaults then pending and all other conditions precedent to the
performance by Seller of its obligations under this Agreement have been
satisfied or waived.
(iii) If, within Purchaser's Curative Period, such Purchaser's
Default is not cured or corrected then at the election of Seller and
effective upon notice thereof given to Purchaser prior to or at 5:00 p.m.
(Chicago, Illinois time) on the second (2nd) Business Day next following
the date of expiration of Purchaser's Curative Period, this Agreement
shall terminate and the parties hereto shall be released and discharged
of and from all further obligation and liability under this Agreement,
subject to Section 18.14, and except that exclusive of and in addition to
the liability, if any, of Purchaser accruing as a result of Purchaser's
breach of any of the representations, warranties and covenants deemed by
Section 18.14 to survive any termination of this Agreement, the Title
Insurer shall deliver the ▇▇▇▇▇▇▇ Money to Seller in full settlement and
liquidation of all damages sustained by Seller, it being acknowledged and
agreed that the damages sustained by Seller as a result of a material
default by Purchaser hereunder, exclusive of and in addition to the
liability of Purchaser accruing as a result of Purchaser's breach of any
of the representations, warranties and covenants deemed by Section 18.14
to survive any termination of this Agreement, would be substantial but
difficult to ascertain.
19
(iv) Seller shall not be entitled, and hereby expressly waives its
right, to exercise any and all rights, powers and remedies at law or in
equity, other than such remedies as may be required to enforce the rights
of Seller as specifically provided in Section 13.01(iii).
13.02 (i) If, prior to or at the Closing Date (as determined without regard
to the provisions of Section 13.02(ii)), a Seller's Default shall occur
or exist, then Seller shall have a period ("Seller's Curative Period")
expiring the later of the (2nd) Business Day immediately preceding the
Closing Date or the fifth (5th) Business Day after the date of Seller's
Default, to correct or cure such Seller's Default.
(ii) In the event that Seller's Default is corrected or cured within
Seller's Curative Period, the Closing Date shall be the later of (1) the
date determined in Section 1.02 or (2) the tenth (10th) Business Day
following the date such Seller's Default has been cured or corrected, or
on such other date to which Seller and Purchaser shall mutually agree in
writing, provided that there are no other Seller's Defaults then pending
and all other conditions precedent to the performance by Purchaser of its
obligations under this Agreement have been satisfied or waived.
(iii) If, within Seller's Curative Period, such Seller's Default is
not cured or corrected then at the election of Purchaser and effective
upon notice thereof given to Seller prior to or at 5:00 p.m. (Chicago,
Illinois time) on the second (2nd) Business Day following the date of
expiration of Seller's Curative Period, this Agreement shall terminate
and the parties hereto shall be released and discharged of and from all
further obligation and liability under this Agreement, subject to Section
18.14 hereof, and except that:
(a) the ▇▇▇▇▇▇▇ Money shall be forthwith returned to Purchaser
by the Title Insurer; and
(b) exclusive of and in addition to the liability, if any, of
Seller accruing as a result of Seller's breach of any of the
representations, warranties and covenants deemed by Section 18.14 to
survive any termination of this Agreement, Purchaser shall have all
rights and remedies available at law or in equity on account thereof,
including, but not limited, the right to specific performance.
13.03 In any suit, action or proceeding under this Agreement, the party hereto
prevailing therein shall be entitled to reimbursement from the other party of
all reasonable costs and expenses, including, without limitation, court costs,
expert witness fees and reasonable attorneys' fees and expenses at trial and on
appeal, incurred or sustained by the prevailing party in connection with such
suit, action or proceeding, and all such costs and expenses shall be included in
any order, judgment or decree issued or rendered therein.
20
14. Representations and Warranties of Purchaser. As of the Agreement Date and as
of the Closing Date, Purchaser represents and warrants to and covenants with
Seller that:
14.01 Purchaser is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has all requisite power and
authority to own its property and carry on its business as now being conducted.
14.02 Purchaser has all necessary power and authority to enter into this
Agreement and to perform all of the obligations to be performed by Purchaser
hereunder.
14.03 This Agreement has been duly and validly executed and delivered by
Purchaser, and this Agreement constitutes the valid and legally binding
obligation of Purchaser, enforceable against Purchaser in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or similar laws affecting the
enforcement of creditors' rights generally and except that the availability of
injunctive relief is subject to the discretion of the court before which any
proceeding may be brought.
14.04 This Agreement and its consummation have been duly authorized and approved
on behalf of Purchaser by all requisite action. Neither the execution and
delivery by Purchaser of this Agreement nor the consummation by Purchaser of the
acquisition of the Property will conflict with, result in the breach of,
constitute a default under, or accelerate the performance provided by the terms
of (i) any law, ordinance, rule or regulation of any governmental body,
authority or agency, (ii) any judgment, order or decree of any court or any
governmental authority or agency to which Purchaser may be subject, (iii) any
material contract, material agreement or material instrument to which Purchaser
is a party or by which Purchaser is bound or committed or (iv) Purchaser's
Articles of Incorporation or By-Laws.
15. Representations and Warranties of Seller. As of the Agreement Date and as of
the Closing Date, Seller represents and warrants to and covenants with Purchaser
that:
15.01 Seller is a limited partnership, duly organized, validly existing and in
good standing under the laws of the State of Maryland and has all requisite
power and authority to own its property and carry on its business as now being
conducted.
15.02 Seller has all necessary power and authority to enter into this Agreement
and to perform all of the obligations to be performed by Seller hereunder.
15.03 This Agreement has been duly and validly executed and delivered by Seller,
and this Agreement constitutes the valid and legally binding obligation of
Seller, enforceable against Seller in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar laws affecting the enforcement of
creditors' rights generally and except that the availability of injunctive
relief is subject to the discretion of the court before which any proceeding may
be brought.
21
15.04 This Agreement and the consummation of the transactions contemplated
by this Agreement have been duly authorized and approved on behalf of Seller by
all requisite action. Neither the execution and delivery by Seller of this
Agreement nor the consummation by Seller of the sale of the Property will
conflict with, result in the breach of, constitute a default under, or
accelerate the performance provided by the terms of (i) any law, ordinance, rule
or regulation of any governmental body, authority or agency, (ii) any judgment,
order, or decree of any court or any governmental authority or agency to which
Seller or the Property may be subject, (iii) any material contract, material
agreement, or material instrument to which Seller is a party or by which Seller
or the Property is bound or committed, or (iv) any organizational document of
Seller.
15.05 Neither the execution and delivery of this Agreement, nor the
consummation of the transaction with Purchaser will constitute an event which,
with the lapse of time or action by a third party, could result in the creation
of any lien, charge, or encumbrance upon any of the Property.
15.06 There are no actions, suits or proceedings pending or, to the
knowledge of Seller, threatened against or affecting Seller, at law or in
equity, or before any federal, state, municipal or governmental department,
commission, board, bureau, agency or instrumentality which involve the
possibility of any judgment or liability, not substantially covered by
insurance, and which affects the Property or which may result in any material
adverse change in the business operations, prospects, properties or assets or in
the condition, financial or other, of Seller, or which could prevent Seller's
closing of this Agreement.
15.07 There are no pending, and Seller has not received any notice and has
no actual knowledge of any threatened, proceedings or other actions by any
Governmental Authority to rezone, condemn or impose any assessment, charge or
encumbrance on the Property.
15.08 Seller has not entered into any agreement, contract or other document
to sell, assign, transfer, convey, encumber or dispose of the Property or any
part thereof or interest therein other than this Agreement.
15.09 Except as disclosed on Exhibit N attached hereto, Seller has received
no notice of failure by Seller to comply with any applicable Governmental
Regulations, which failure remains uncured as of Agreement Date.
15.10 (a) The Feasibility Materials are, and at the Closing Date will be,
true, correct and complete copies thereof, (b) the Service Contracts are, and at
the Closing Date will be (subject to expiration of the term thereof or breach by
the other party thereto), in full force and effect, and all such Service
Contracts have been, or will be delivered to Purchaser pursuant to this
Agreement, and (c) there is no material default by Seller, nor any state of
facts which with the passage of time or giving of notice or both, would
constitute a material default by Seller under any of the Service Contracts,
which would give the other party thereto the right to terminate such Service
Contract.
22
15.11 Seller (a) is not party to, or otherwise bound by, any collective
bargaining agreement or multi-employer pension fund covering employees who
service the Property, (b) has not entered into any oral or written agreements
which would bind or obligate Purchaser to engage the services of any person as
employee or independent contractor relating to the Property, and (c) is not
involved in any current labor dispute with any maintenance or other personnel or
employees of Seller.
15.12 Seller knows of no facts, nor has Seller failed to disclose to
Purchaser any fact known to Seller, which would prevent Purchaser from using
and operating the Property after the Closing Date in the manner in which the
Property has been used and operated prior to the Agreement Date.
15.13 To Seller's knowledge (a) other than amounts disclosed by the
Commitment or by the tax bills delivered to Purchaser by Seller, no other real
property taxes have been or will be assessed against the Property for the
current year, (b) other than as disclosed in the public records, there are not
any special assessments or charges which have been levied against the Property,
and (c) there are no intended public improvements which will result in any
charge being levied against or in the creation of any lien upon the Property or
any portion thereof.
15.14 The statements of Seller contained herein and in any other written
documents delivered by or on behalf of Seller pursuant to the terms of this
Agreement are true and correct in all material respects as of the date thereof
and will be true and correct as of the Closing Date, and this Agreement and such
other documents, considered in the aggregate, do not as of the date thereof and
will not as of the Closing Date, omit any material fact necessary to make the
statements of Seller contained herein or therein, in light of the circumstances
under which they were made, not misleading.
15.15 To Seller's knowledge and except to the extent disclosed in the
Feasibility Materials, as of the Agreement Date (a) the Property is not in
violation of any applicable environmental law or regulation promulgated by any
Authority (collectively, "Environmental Laws"); (b) neither Seller nor any prior
owner or occupant of the Real Property has engaged in or permitted any release,
dumping, discharge, disposal, spillage or leakage (whether legal or illegal,
accidental or intentional) of substances or materials regulated under or
defined as being a "hazardous material" or a "hazardous substance" under any
Environmental Law ("Hazardous Materials") on the Property; and (c) there is no
friable asbestos present upon the Property. Seller has received no notice of any
proceeding or inquiry by any Authority with respect to the presence of any
Hazardous Substances on the Property or the migration thereof from or to other
property.
15.16 Except as disclosed in the Feasibility Materials, Seller has received
no notice, and Seller has no knowledge, that the Improvements are not
permitted, conforming structures under applicable zoning and building laws and
ordinances. Seller has received no notice from any insurer that the condition,
use or operation of the Property violates the terms of any insurance coverage
applicable to the Property, and, to Seller's knowledge, the current condition,
use or operation of the Property does not violate the terms of such insurance.
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15.17 The copies of the Leases delivered or to be delivered by Seller to
Purchaser are true, correct and complete copies of such Leases and are in full
force and effect, and include all modifications and amendments thereto in effect
as of the date of such delivery; and the information set forth in the Rent Roll
is true, correct and complete as of the date such Rent Roll was made available
to Purchaser and there are no leases of space in the Improvements and no
material defaults under any of the Leases, except as set forth in the Leases.
15.18 The operating statements for the Property delivered to Purchaser are
true, correct and complete and accurately reflect in all material respects the
financial condition of the Property for the periods to which such statements
relate.
15.19 The Licenses and Permits constitute all of the licenses and permits
required for the normal use and operation of the Property. To Seller's
knowledge, the Regulatory Licenses constitute all of the licenses required to
operate the Property as an adult living facility. Seller has materially complied
with all the terms of all Licenses and Permits and Regulatory Licenses and has
not received any notice that any such Licenses or Permits or Regulatory Licenses
will not be renewed upon expiration, or of any material conditions which will be
imposed in order to receive any such renewal.
16. Notices.
16.01 All notices, requests, demands and other communications required or
desired to be given hereunder shall be in writing signed by Seller or Purchaser,
or their respective authorized agents or attorneys, as the case may be, and
shall be deemed to have been properly given if (i) served in person, (ii)
mailed, by United States registered or certified mail, full postage prepaid,
return receipt requested (iii) sent by special courier service (e.g. Federal
Express) or (iv) sent by telecopy, provided that in confirmation thereof, an
executed original of such notice, request, demand or other communication is
concurrently given by means of any other mode of delivery permitted hereunder,
addressed as follows:
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If to Seller: Brendenwood MRC Limited Partnership
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier No.:
---------------
With a copy thereof to ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇
counsel to Seller: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
If to Purchaser: Brookdale Living Communities, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
Brookdale Living Communities, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy thereof to ▇▇▇▇▇, ▇▇▇▇▇▇, MacKay & ▇▇▇▇▇▇▇▇▇▇, P.C.
counsel to Purchaser: ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address in the United States of America as may from time to
time be designated by the party to be addressed by notice to the other in the
manner hereinabove provided.
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16.02 Any notice, request, demand or other communication served as provided
in Section 16.01(i) shall be deemed to have been given and received on the date
of actual receipt of such notice, request, demand or other communication. Any
notice, request, demand or other communication mailed as provided in Section
16.01(ii) or sent as provided in Section 16.01(iii) shall be deemed to have been
given and received on the earlier of (a) the date of actual receipt of such
notice, request, demand or other communication, regardless of mode of delivery,
or (b) the second Business Day next following the date of mailing by U.S.
registered or certified mail or (c) the date of delivery to such special courier
service of such notice, request, demand or other communication. Any notice,
request, demand or other communication delivered as provided in Section
16.01(iv), shall be deemed to be given and received on the date received
provided that the confirmation thereof is sent and deemed received pursuant to
the other provisions of this Section 16.02.
16.03 The delivery to or receipt by parties, other than and in addition to
Seller or Purchaser, of copies of any notice, request, demand or other
communication hereunder is merely an accommodation and is not necessary or
required to make effective the actual giving or receipt by Seller or Purchaser
of any notice, request, demand or other communication.
17. No Assignment.
17.01 Except as provided in Section 17.02, Purchaser shall not have the
right to transfer or assign this Agreement or any right or interest herein
without the prior written consent of Seller, and any purported assignment or
transfer thereof by Purchaser, without the prior written consent of Seller,
shall not vest in the transferee or assignee any right, title or interest herein
or in the Property.
17.02 Notwithstanding the provisions of Section 17.01, Purchaser may assign
this Agreement (i) at any time, to a Purchaser's Affiliate, or (ii) as part of a
sale or lease transaction, or a financing lease transaction, including a
"synthetic lease transaction" pursuant to which Purchaser or Purchaser's
Affiliate is the lessee and operator of the Property, which, in either case,
Purchaser shall give notice thereof to Seller.
17.03 In the event that, with the prior written consent of Seller or pursuant
to Section 17.02, Purchaser shall assign or transfer this Agreement or any right
or interest herein, the transferee or assignee shall, by instrument reasonably
satisfactory to Seller assume and agree to pay, perform and observe all the
covenants, agreements and obligations of Purchaser under this Agreement. No such
transfer shall release Purchaser from its obligations under this Agreement
unless Seller has expressly consented to such release in writing.
18. Miscellaneous. It is further understood and agreed that:
18.01 Time is of the essence of each and every covenant, condition and
obligation of this Agreement. Except as herein expressly permitted, neither
party hereto shall have the right to
26
extend the Closing, the Closing Date, the date of expiration of any period of
time or the date for the performance of any act or the satisfaction of any
condition. Failure by a party hereto to perform timely its covenants,
agreements and obligations hereunder, unless waived in writing by the other
party hereto, shall be a material default under this Agreement.
18.02 The Section headings of this Agreement and the captions of the
Exhibits and Schedules attached hereto are for convenience only and are not
intended, and shall not be construed, to alter, limit or enlarge in any way the
scope or meaning of the language contained in this Agreement and the Exhibits
and Schedules attached hereto.
18.03 If any act hereunder by one party requires reasonably the execution of
any documents or papers by the other party, then the other party shall cooperate
to that end and execute all such documents and papers, subject to and in
accordance with this Agreement.
18.04 Except as otherwise provided herein, this Agreement, including, without
limitation, all the Exhibits and Schedules attached hereto, contains the whole
agreement between Seller and Purchaser, and there are no other terms, promises,
obligations, covenants, warranties, representations, statements or conditions,
express or implied, of any kind, and any and all prior negotiations and
agreements are hereby superseded by and merged into this Agreement.
18.05 None of the covenants, terms or conditions of this Agreement to be
paid, observed and performed by either party shall in any manner be altered,
waived, modified, changed or abandoned except by a written instrument, duly
signed, acknowledged and delivered by the parties hereto.
18.06 This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original and all of which, taken together, shall
constitute and be taken as one and the same instrument.
18.07 This Agreement shall be governed by, construed and enforced in accordance
with the laws of the State of New Jersey.
18.08 (i) All the covenants, agreements and provisions contained in the
Exhibits and Schedules attached hereto shall, by this reference, be
incorporated into and made a part of this Agreement.
(ii) Any reference to this Agreement herein or in any other documents
shall, unless the context otherwise requires, or there is any express
statement to the contrary, be deemed and construed to encompass this
Agreement and all the Exhibits and Schedules attached hereto.
18.09 (i) This Agreement and all the provisions hereof shall extend to and be
binding upon Purchaser, its successors and assigns.
27
(ii) This Agreement and all the provisions hereof shall extend to, be
binding upon and inure to the benefit of Seller, its successors and
assigns.
18.10 This Agreement is intended for the benefit of the parties hereto and
their respective heirs, legal representatives, successors and permitted assigns
and no third party shall have any legal or equitable rights, interests, remedies
or claims under any provisions of this Agreement or as a result of any action or
inaction of any of the parties hereto in connection therewith.
18.11 If the consent or approval of either Seller or Purchaser is required
under this Agreement, then unless otherwise herein expressly stated to the
contrary, such consent or approval shall not be unreasonably withheld or
delayed.
18.12 If the Closing Date, the date of expiration of any period of time or
the date for the performance of any act or the satisfaction of any condition,
whether specified or determined by formula or calculation, under this Agreement
occurs on a Saturday, Sunday or legal holiday in the State of New Jersey,
Maryland or Illinois, then the Closing Date or such date shall automatically be
extended to the next following Business Day in said State.
18.13 All payments made or to be made under or pursuant to this Agreement
shall be in the lawful money of the United States of America for the payment of
public and private debts and no other money or currency.
18.14 Except for the representations, warranties and covenants of Seller
contained in Sections 7.01, 8.02, 13.02 and 15, the representations, warranties
or covenants of Seller contained in this Agreement shall not survive the Closing
and/or termination of this Agreement. Except for the representations,
warranties and covenants of Purchaser contained in Sections 3.03, 3.04, 7.02,
8.02, 13.01 and 14, the representations, warranties or covenants of Purchaser
contained in this Agreement shall not survive the Closing and/or termination of
this Agreement.
18.15 Purchaser shall not record this Agreement or any memorandum hereof and
any attempt to do so shall render this Agreement null and void but shall not
impair Seller's remedies on account of a Purchaser Default; provided this
provision shall not apply in the case of any lis pendens recorded by Purchaser
in connection with any proceeding for specific enforcement of this Agreement.
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed and delivered, or
caused to be executed and delivered on their behalf by their duly authorized and
empowered officers (and such officers represent that they are so authorized and
empowered), this Agreement as of the day and year written below.
SELLER: PURCHASER:
BRENDENWOOD MRC LIMITED BROOKDALE LIVING COMMUNITIES,
PARTNERSHIP, a Maryland limited INC., a Delaware corporation
partnership
By: MERIDIAN RETIREMENT By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
CENTERS, INC., a Maryland ----------------------
corporation, general partner Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Title: Vice President
----------------------- -------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Title: President DATED: September 25 , 1997
-------------------- ---------------------
By: KWB PARTNERSHIP, a Maryland
partnership, general partner
By: MERIDIAN RETIREMENT
CENTERS, INC., a
Maryland corporation,
general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Title: President
--------------------
DATED: October 1 , 1997
----------------------
29