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EXHIBIT 2.1
AGREEMENT OF PURCHASE AND SALE
(Operating Residences)
By and Between
ALTERNATIVE LIVING SERVICES, INC.
and
HCR MANOR CARE, INC.
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TABLE OF CONTENTS
PAGE
1. Purchase and Sale of Operating Residences.............................................................. 1
A. Real Property................................................................................. 1
B. Residency Agreements.......................................................................... 2
C. Leases........................................................................................ 2
D. Improvements.................................................................................. 3
E. Personal Property............................................................................. 3
F. Service Contracts............................................................................. 3
G. Operating Interests........................................................................... 4
2. Purchase Price for the Operating Residences............................................................ 6
A. Payment....................................................................................... 6
B. Allocation.................................................................................... 6
3. Nonexclusive License................................................................................... 7
4. Closing................................................................................................ 8
A. Delivery; Possession.......................................................................... 8
B. Transfer Taxes................................................................................ 8
C. Seller's Closing Costs........................................................................ 8
D. Purchaser's Closing Costs..................................................................... 8
E. Existing Fines and Penalties.................................................................. 9
F. Other Costs................................................................................... 9
5. Title.................................................................................................. 9
A. Examination of Title.......................................................................... 9
B. Survey Matters................................................................................ 11
6. Prorations and Credits at Closing...................................................................... 11
A. Real Estate Taxes and Assessments............................................................. 11
B. Prepaid Resident Rent......................................................................... 11
C. Custodial Accounts............................................................................ 11
D. Rents......................................................................................... 12
E. Security Deposits............................................................................. 12
F. Utility Expenses and Payments................................................................. 12
G. Utility Deposits.............................................................................. 12
H. Service Contract Payments..................................................................... 12
I. Personal Property Taxes....................................................................... 13
J. Accrued Benefits.............................................................................. 13
K. Payroll....................................................................................... 13
L. Reproration after Closing..................................................................... 13
M. Performance of Obligations.................................................................... 13
7. Accounts Receivable.................................................................................... 13
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8. Conveyances and Deliveries at each Residence Closing................................................... 14
A. Deed; Affidavit............................................................................... 14
B. ▇▇▇▇ of Sale.................................................................................. 14
C. Assignment of Residency Agreements and Leases................................................. 14
D. Assignment of Service Contracts............................................................... 15
E. Notices of Assignment......................................................................... 15
F. Books and Records, Floor Plans, Plans and Specifications, Medical Records, Original
Documents and Other Instruments............................................................... 15
G. Section 1445 Certificate; Form 8594........................................................... 15
H. Termination of Management Agreement and Service Contracts..................................... 15
I. Closing Statement............................................................................. 16
J. Reaffirmation of Representations and Warranties............................................... 16
K. Other Conveyances and Instruments............................................................. 16
9. Seller's Representations, Warranties and Covenants..................................................... 16
A. Title to Personal Property; Condition of Personal Property.................................... 16
B. Residency Agreements and Leases............................................................... 16
C. Title to Improvements; Condition of Improvements.............................................. 18
D. No Other Leases/Occupancies................................................................... 18
E. Other Contracts............................................................................... 18
F. Service Contracts............................................................................. 18
G. Accuracy of Operating Statements.............................................................. 18
H. Accuracy and Completeness of Other Seller Documents and Records............................... 19
I. Litigation and Other Proceedings.............................................................. 19
J. Compliance of Property With Zoning and Other Laws............................................. 19
K. Environmental Matters......................................................................... 19
L. No Options or Other Interests................................................................. 20
M. Assessments, Fees and Liens................................................................... 20
N. Pending Assessments and Condemnation Proceedings.............................................. 20
O. Disclosure.................................................................................... 20
P. Authority..................................................................................... 21
Q. Licensure and Regulatory Matters.............................................................. 21
R. Reports....................................................................................... 21
S. Employees; Unions............................................................................. 21
10. Purchaser's Representations and Warranties............................................................. 22
A. Organization, Power and Authority............................................................. 22
B. No Bankruptcy................................................................................. 22
11. Pre-Closing Covenants.................................................................................. 22
A. Inspection of Property........................................................................ 22
B. Compliance with Laws, Leases, Contracts....................................................... 22
C. Standard of Operation and Maintenance......................................................... 23
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D. New Leases and Modifications to Existing Leases; Residency Agreements......................... 23
E. New Service Contracts and Modifications to Existing Service Contracts......................... 23
F. Notice of Revision of Representations Due to Discovery of New Facts........................... 23
G. Personal Property Inventory................................................................... 23
H. Transfer of Permits........................................................................... 24
I. Compliance of Improvements and Real Property.................................................. 24
J. Existing Employees............................................................................ 24
K. Notices and Consents.......................................................................... 25
12. Purchaser's Inspection of Property..................................................................... 25
A. Access........................................................................................ 25
B. Termination Election.......................................................................... 26
C. Right to Update Information, including Representations and Warranties......................... 26
13. Conditions to Each Residence Closing................................................................... 27
A. Conditions to Each Parties' Obligation to Close............................................... 27
B. Conditions to Purchaser's Obligation to Close................................................. 27
14. Seller's Options Upon Failure of Purchaser Closing Condition........................................... 28
A. Deferral of Residence Closing Date............................................................ 28
B. Indemnification and Cure...................................................................... 28
C. Withdrawal of Residence....................................................................... 28
D. Withdrawal and Substitution................................................................... 28
15. Notices................................................................................................ 29
16. Casualty and Condemnation.............................................................................. 30
A. Casualty...................................................................................... 30
B. Condemnation.................................................................................. 30
17. Brokers................................................................................................ 31
18. Default................................................................................................ 31
19. Survival of Representations and Warranties; Indemnification............................................ 32
A. Survival of Representations and Warranties.................................................... 32
B. Seller's Indemnification Obligations.......................................................... 32
C. Purchaser's Indemnification Obligations....................................................... 32
D. Procedure for Indemnification Claims.......................................................... 33
20. Campus Properties...................................................................................... 34
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21. Post-Execution Delivery of Schedules................................................................... 34
22. Shared Facilities. ................................................................................... 35
23. Termination. ......................................................................................... 36
24. General Provisions. .................................................................................. 36
A. Agreement Binding; Assignment................................................................. 36
B. Entire Agreement.............................................................................. 36
C. Execution Necessary........................................................................... 37
D. Time is of the Essence........................................................................ 37
E. Governing Law................................................................................. 37
F. Interpretation; Date of Agreement............................................................. 37
G. Waiver........................................................................................ 37
H. Facsimile Signature; Counterparts............................................................. 37
I. Non-Waiver.................................................................................... 37
J. Rights Cumulative............................................................................. 38
K. Schedules..................................................................................... 38
L. Attorneys' Fees............................................................................... 38
SCHEDULES
Schedule I Name of Seller Entity Owner, Licensure Category and Number of Units/Beds
Schedule II List of Construction Residences
Schedule 1-B Residency Information for each of the Operating Residences*
Schedule 1-C Lease Summary Information for each of the Operating Residences*
Schedule 1-E(i) List of Excluded Personal Property for each of the Operating Residences*
Schedule 1-E(ii) List of Personal Property for each of the Operating Residences*
Schedule 1-F List of Service Contracts for each of the Operating Residences*
Schedule 9-A Aggregate Limits on Past Due Rent for each of the Operating Residences*
Schedule 9-B Description of Pending Litigation and Licensing Warnings or Violations*
Schedule 9-C Zoning and Legal Noncompliance for each of the Operating Residences*
Schedule 9-D Employee Matters for each of the Operating Residences*
Schedule 18 Applicable Liquidated Damages Amounts
Schedule 20 Campus Properties
Schedule 22 Shared Facilities
*To be delivered by Seller to Purchaser post-execution
(see Section 21)
AGREEMENT OF PURCHASE AND SALE
(Operating Residences)
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THIS AGREEMENT OF PURCHASE AND SALE (this "Agreement") is made and
entered into effective as of the 31st day of December, 1998, by and between HCR
MANOR CARE, INC., a Delaware corporation ("HCR Manor Care"), the wholly-owned
subsidiaries of HCR Manor Care that are signatories hereto (which together with
HCR Manor Care are collectively referred to as "Seller"), and ALTERNATIVE LIVING
SERVICES, INC., a Delaware corporation (together with its transferees and
assigns hereinafter referred to as "Purchaser").
W I T N E S S E T H:
WHEREAS, Seller owns and operates the twenty-one (21) assisted living
and dementia care residences being more particularly identified on Schedule I
attached hereto and incorporated herein by reference (collectively, and as more
particularly described in Section 1 hereof, the "Operating Residences", as such
term is more particularly defined below) and Seller is developing and
constructing the eight (8) assisted living and dementia care residences being
more particularly identified on Schedule II attached hereto and incorporated
herein by reference (collectively, the "Construction Residences"); and
WHEREAS, Seller desires to sell, and Purchaser desires to purchase,
each of (i) the Operating Residences in accordance with the terms and conditions
hereinafter set forth and (ii) the Construction Residences in accordance with
the terms and conditions set forth in the Agreement of Purchase and Sale
(Construction Residences) dated as of the date hereof by and between Purchaser,
HCR Manor Care and certain wholly-owned subsidiaries of HCR Manor Care (the
"Construction Purchase Agreement").
NOW, THEREFORE, for and in consideration of the foregoing, the sum of
Ten Dollars ($10.00) and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Purchaser and Seller hereby agree
as follows:
1. PURCHASE AND SALE OF OPERATING RESIDENCES.
Upon and subject to the terms and conditions set forth in this
Agreement, Purchaser shall purchase from Seller, and Seller shall sell to
Purchaser, good and marketable fee simple title in and to the following
described property:
A. Real Property. All those tracts or parcels of land having the street
addresses described on Schedule I attached hereto and made a part hereof (the
"Land"), including, without limitation, (a) any and all buildings or structures
located on the Land and all other Improvements (as hereinafter defined), (b) to
the extent assignable and subject to the receipt of any approvals needed for
assignments, which Seller shall use commercially reasonable efforts to obtain
upon request by Purchaser, all easements appurtenant to the Land and other
licenses, grants of right, privileges or other agreements for the benefit of,
belonging to or appurtenant to the Land regardless of whether situate upon the
Land, and regardless of whether specifically referenced on
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Schedule I attached hereto, (c) to the extent assignable and subject to the
receipt of any approvals needed for assignment, which Seller agrees to use
commercially reasonable efforts to obtain upon request by Purchaser, all
mineral, oil and gas rights, riparian rights, water rights, sewer rights and
other utility rights allocated to the Land, (d) to the extent assignable and
subject to the receipt of any approvals needed for assignment, which Seller
agrees to use commercially reasonable efforts to obtain upon request by
Purchaser, all right, title and interest, if any, of Seller in and to any and
all ▇▇▇▇▇▇, strips and gores of land located on or adjacent to the Land, (e) to
the extent assignable and subject to the receipt of any approvals needed for
assignment, which Seller agrees to use commercially reasonable efforts to
obtain upon request by Purchaser, all right, title and interest of the owner of
the Land in and to any roads, streets and ways, public or private, open or
proposed, in front of or adjoining all or any part of the Land and serving the
Land, and (f) to the extent assignable and subject to the receipt of any
approvals needed for assignment, which Seller agrees to use commercially
reasonable efforts to obtain upon request by Purchaser, all rights to
development of the Land granted by governmental entities having jurisdiction
over the Land (the Land and all of the foregoing interests are sometimes
hereinafter collectively referred to as the "Real Property"). To the extent
that Purchaser and Seller determine that one (1) or more of the seven (7)
parcels of Real Property identified as a "Campus Property" on Schedule 20
cannot as a practical matter be legally subdivided from the adjacent facility
or facilities campused therewith, then and in such event Purchaser and Seller
agree that such parcel or parcels shall be governed by the terms and provisions
of Section 20 of this Agreement.
B. Residency Agreements. All residency agreements, entrance agreements
and other agreements for use or occupancy of all or any portion of each of the
Operating Residences entered into by all Residents (as hereinafter defined)
(collectively, the "Residency Agreements"), together with all prepaid rents and
advance rentals (other than the monthly residence fees paid by Residents in
advance for the month in which the Residence Closing Date (as hereinafter
defined) occurs) and all security deposits (collectively, the "Advances") with
respect to the Residency Agreements and the guaranties or warranties of payment
by all guarantors or co-signers with respect to the Residency Agreements. The
name or room number of each occupant or resident under the Residency Agreements
(herein referred to as a "Resident" or "Residents") for each Operating
Residence, the name of each Seller entity that is a party to the Residency
Agreements for such Operating Residence, the current rental payable thereunder,
the date of the Residency Agreement, and the amount of any past due or
delinquent rental and the Advances therefor, will be set forth on Schedule 1-B,
which Schedule shall be delivered by Seller to Purchaser as provided in Section
21 hereof (the "Rent Roll").
C. Leases. Any other agreements for use or occupancy of any portion of
any of the Operating Residences, excluding only the Residency Agreements,
including without limitation all leases, subleases and rental agreements
(collectively, the "Leases"), together with all rights appurtenant thereto and
any prepaid rents and advance rentals (other than the monthly rental paid by a
tenant in advance for the month in which the Residence Closing Date occurs) and
all security deposits with respect to the Leases (which, together with the
Advances, are hereinafter collectively called the "Deposits"). The name of each
tenant or lessee under the Leases (hereinafter referred to as a "Tenant" or
collectively "Tenants") for each Operating Residence,
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the names of each Seller entity that is a party to such Lease, the date of each
Lease, the current rental payable thereunder, any past due or delinquent rental
and the Deposits therefor, will be set forth on Schedule 1-C, which Schedule
shall be delivered by Seller to Purchaser as provided in Section 21 hereof (the
"Lease Summary").
D. Improvements. All buildings, structures (surface and subsurface)
and other improvements and fixtures situated on or attached to or constituting
a portion of all or any portion of the Real Property (herein collectively
referred to as the "Improvements").
E. Personal Property. All tangible personal property located at the
Operating Residences and used or useable in connection with any present or
future occupation, operation or maintenance of all or any part of the Real
Property or the Improvements or both, together with (to the extent not
constituting a portion of the Real Property or the Improvements) all fixtures,
trade fixtures, furniture, furnishings, carpeting, draperies, linens, fittings,
equipment, machinery, apparatus and appliances, now located on the Real Property
and used or useable in connection with any present or future occupation or
operation of all or any part of the Real Property or the Improvements or both,
including, without limitation, all elevators, escalators, boilers, furnaces,
heating, ventilating and air-conditioning systems, furnishings and equipment,
building drawings, plans and specifications, building materials and wall
partitions, sprinkler and well systems, sewerage systems, electrical equipment,
fire prevention and extinguishing apparatus, engineering, maintenance, cooking,
housekeeping and medical or therapeutical supplies and materials, mowers and
edgers and other lawn maintenance equipment and supplies, vans, buses,
automobiles or other motor vehicles, fuel and other supplies of all kinds
whether used, unused or in stock for future use in connection with the
occupation, maintenance or operation of the Operating Residences, which are on
hand on the date hereof, subject to such depletion and including such
resupplying as shall occur and which Seller is hereby obligated to make in the
ordinary course of operating the ongoing business at the Operating Residences
(the aforesaid items, subject to the following exclusions, are hereinafter
collectively referred to as the "Personal Property"), excluding only, however,
(i) all items of personal property which are the property of Residents or
Tenants, (ii) the rights of the owner of any equipment leased pursuant to, or
owned by parties other than Seller (and which are not affiliated with Seller)
pursuant to the Service Contracts, as hereinafter defined and (iii) those items
of Personal Property specifically excluded hereunder which will be more
particularly set forth on Schedule 1-E(i), which Schedule shall delivered by
Seller to Purchaser as provided in Section 21 hereof and which may include items
of Personal Property owned or leased by affiliates of Seller. A current
inventory of all material items of the Personal Property for each Operating
Residence will be set forth on Schedule 1-E(ii), which shall be delivered by
Seller to Purchaser as provided in Section 21 hereof (the "Personal Property
Inventory").
F. Service Contracts. To the extent assignable and subject to the
receipt of any consents to assignment which may be needed for assignment, which
Seller agrees to use commercially reasonable efforts to obtain upon request by
Purchaser, all service, supply, development, construction, management,
maintenance and other contracts for leasing, management, maintenance or
operation of the Operating Residences that Purchaser is obligated to assume
pursuant to the terms hereof, including, but not limited to, all leases by which
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equipment is leased and is used or useable in connection with any present or
future occupation, operation or maintenance of the Operating Residences, and all
operating files relating to all of the aforesaid, but not including any such
contracts which, pursuant to the terms hereof, Purchaser is not obligated to
accept or assume (and does not elect to assume) in connection with the purchase
and sale contemplated in this Agreement (herein collectively referred to as the
"Service Contracts"). A summary list of all Service Contracts in effect as of
the date of this Agreement and all other such contracts that Purchaser has not
yet rejected but that Purchaser may reject pursuant to the terms of this
Agreement, including the identity of contract parties, the date of contract, the
expiration date of the contract, and the amounts payable thereunder will be set
forth on Schedule 1-F, which Schedule shall be delivered by Seller to Purchaser
as provided in Section 21 hereof (the "List of Service Contracts").
G. Operating Interests. Any and all of the following (hereinafter
collectively referred to as the "Operating Interests"):
(i) The business of Seller conducted at the Operating
Residences as a going concern, including without limitation, all
intangible rights and interests associated with the Operating
Residences, any name or trade name by which the Improvements or the
Operating Residences or any part thereof may be known, including, but
not limited to names used on the date hereof in connection with the
ownership and operation of the Operating Residences, and all
registrations for such names or intangible rights and interests, but
expressly excluding the names "HCR", "Health Care and Retirement",
"Heartland", "Manor Care", "Arden Court", "Spring House", and any names
including any of the foregoing or any derivations thereof (the
"Excluded Names") and all telephone numbers of Seller presently in use
therein, including without limitation goodwill and going concern value,
and any and all marketing materials, promotional materials, letterhead,
envelopes or other materials bearing such names and logos, but
expressly excluding (a) all cash and bank accounts (other than the
Custodial Accounts, as hereinafter defined), (b) all Receivables (as
hereinafter defined) and (c) all liabilities and obligations resulting
from the business of Seller conducted at the Operating Residences as a
going concern except as expressly assumed by Purchaser at the
applicable Residence Closing Date to the extent provided herein;
provided, however that Seller makes no representation or warranty
whatsoever with regard to its rights to use any such name, trade name,
telephone numbers or any other intangible rights or registration
therefor;
(ii) To the extent assignable or transferable and subject to
receipt of any consents required for such assignments or transfers,
which Seller agrees to use commercially reasonable efforts to obtain
upon request by Purchaser, each and every bond, guaranty and warranty
concerning the Real Property, the Improvements and the Personal
Property, including, without limitation, any roofing, air conditioning,
heating, elevator or other bond, guaranty and warranty relating to the
construction, maintenance or replacement of the Improvements or any
portion thereof, including prepaid bonds but excluding any bonds
requiring future payments to be made at Seller's cost;
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(iii) To the extent in the possession of Seller or any
affiliate of Seller, all files relating to the original construction of
the Improvements and replacements made to the Improvements, as well as
all repair and maintenance files (including, without limitation, those
relating to the building systems such as elevators and HVAC systems),
and all operating manuals relating to the building systems;
(iv) All licenses, permits, accreditations, approvals and
certificates used in or relating to the ownership, occupancy or
operation of any part of the Operating Residences, including, without
limitation, (a) any permit, license, accreditation or other approval
necessary under applicable federal, state or local law in order to
permit the operation of the Operating Residences as the type of
residence, and for the number of Residents, set forth with respect to
each such Operating Residence on Schedule 1 and (b) any provider
agreements with Medicaid, Medicare and any other third-party payor
programs entered into solely with respect to the Operating Residences
((a) and (b) are hereinafter collectively referred to as the
"Permits"); provided, however, Seller's obligation to transfer or
assign the Permits is expressly limited to the extent and only to the
extent that the same can be assigned or transferred in accordance with
applicable law and subject to the receipt or satisfaction of any
approvals or other requirements for such assignment or transfer to
Purchaser, as is more particularly set forth below;
(v) All documents, charts, records and lists maintained with
respect to the Residents (subject to the respective Residents' rights
to access to their respective medical records as provided by law and
subject to confidentiality requirements);
(vi) Seller's books of account, accounting records and work
papers, files, reports and other records with respect to the Operating
Residences and the ownership, occupancy and operation of any part of
the Operating Residences, to the extent located at the Operating
Residences or specifically relating only to the Operating Residences
and in the possession or control of Seller, including without
limitation all licensing or regulatory reports, surveys or
correspondence with respect to the licensing of the Operating
Residences, the operation thereof, the compliance with all permits and
applicable laws and other similar matters;
(vii) All employee and personnel files, documents, records and
lists relating to operations at the Operating Residences;
(viii) All plans and specifications in the possession or
control of Seller pertaining to the Operating Residences, as well as
copies of existing surveys;
(ix) Any appurtenant and reciprocal easements or other
instruments affecting the Real Property in the possession or control of
Seller, including all amendments and modifications and Seller's
operating files relating thereto; and
(x) All soils reports and environmental reports and surveys
prepared with respect to the Operating Residences and engineering
studies relating to completed
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projects at the Operating Residences, together with all written
communications and documents relating to such reports and surveys sent
or received by Seller or any affiliate of Seller.
The Real Property, the Improvements, the Residency Agreements, the Leases, the
Deposits, the Service Contracts, the Personal Property and the Operating
Interests related to and associated with a specific Operating Residence are
herein collectively referred to as the "Operating Residence." On or before the
date thirty (30) days after the date hereof, with respect to each of the
Operating Residences, Seller will provide access to Purchaser to the Residency
Agreements and Seller will deliver to Purchaser true, correct and complete
copies of the Leases and the Service Contracts and, with respect to the
Operating Interests, copies of any documents or correspondence that relate to
items to be disclosed on Schedules 9-A, 9-B, 9-C or 9-D and access to the
remainder of Seller's files with respect to the Operating Interests and Seller
shall provide Purchaser with full and complete access to all other documents,
books, records, reports and files of Seller with respect to the Operating
Residences (such copies, documents, books, records and files are hereinafter
collectively referred to as the "Files"). Upon the Residence Closing Date for
any Operating Residence, Seller shall deliver originals of the Files with
respect to such Operating Residence to Purchaser to the extent Seller has not
previously done so and in accordance with other provisions of this Agreement,
and Seller shall continue to have access thereto as provided herein.
2. PURCHASE PRICE FOR THE OPERATING RESIDENCES.
A. Payment. Subject to adjustments as may be applicable pursuant to
Section 6 hereof, the purchase price for each Operating Residence shall be as
set forth on the Addendum of even date herewith by and between HCR Manor Care
and Purchaser (the "Addendum"), which Addendum is incorporated herein by
reference (each, the "Residence Purchase Price"). The Residence Purchase Price
for an Operating Residence shall be payable to Seller at the Residence Closing
Date for such Operating Residence in accordance with Section 4 hereof, subject
to the prorations and adjustments set forth herein, by wire transfer through the
federal reserve system in immediately available funds to an account designated
by Seller in advance.
B. Allocation. Purchaser and Seller hereby agree that within thirty
(30) days after the date of this Agreement, Seller will deliver to Purchaser
Seller's proposed calculation of the allocation of the Residence Purchase Price
among the Real Property, the Improvements, the Personal Property and the
Operating Interests with respect to each Operating Residence, and thereafter
Purchaser and Seller will negotiate in good faith to finalize such allocation,
such allocation to be agreed upon between Purchaser and Seller on or prior to
the applicable Residence Closing Date. In the event Purchaser and Seller agree
upon the allocation, then at the Residence Closing Purchaser and Seller shall
enter into an agreement to file IRS Form 8594 reflecting such agreed upon
allocation. If Purchaser and Seller are unable to agree upon an allocation, then
Purchaser and Seller shall each be entitled to report the transaction to the IRS
using their respective allocations without further obligation to the other party
with respect thereto.
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3. NONEXCLUSIVE LICENSE.
Seller hereby grants to Purchaser a perpetual license (the "Seller
License") to use the Seller Systems (as hereinafter defined) and the Seller
Marks (as hereinafter defined) with respect to the operation of assisted living
or dementia care residences.
A. For purposes of this Agreement, (i) "Seller Systems" shall mean all
formats, systems, methods, specifications, standards, procedures and trade dress
developed or utilized by Seller or its affiliates in operating any of the
Operating Residences or Construction Residences and (ii) "Seller Marks" shall
mean the marks "Arden Court", "Springhouse" and all associated logos, commercial
symbols, and designs.
B. Notwithstanding anything to the contrary herein, Seller retains, for
itself and its associated affiliates, the right in its sole discretion to:
(i) Utilize the Seller System and the Seller Marks, or any
portion thereof, in the management or operation of other assisted
living or dementia care residences or in connection with any other
business in which Seller or its affiliates may engage, as determined by
Seller in its sole discretion; and
(ii) Grant other licenses in the Seller Systems or Seller
Marks, as Seller, in its sole discretion, deems appropriate.
C. In consideration of the Seller License, Purchaser shall pay to
Seller a licensing fee of $5,000,000 (the "Licensing Fee"), simultaneously with
the execution of this Agreement by Purchaser and Seller, which Licensing Fee
constitutes payment in full for the Seller License.
D. Seller makes no representations or warranties, express or implied,
regarding either the Seller Systems or the Seller Marks, which are hereby
licensed "AS-IS". Without limitation of the foregoing, Seller hereby expressly
disclaims (i) any warranty of merchantability, (ii) any warranty of fitness for
a particular purpose, and (iii) any warranty regarding the ability of any
computer software included in the Seller Systems to properly recognize or
process dates from and after January 1, 2000.
E. Purchaser hereby agrees that, with respect to any assisted living or
dementia care residence using the Seller Marks pursuant to the Seller License,
Purchaser shall operate such residence using at least the same high quality
levels of service and standards of care as Seller and its affiliates have
maintained in their operation of residences using the Seller Marks.
F. Purchaser hereby agrees to indemnify, defend and hold harmless
Seller and its affiliates from and against any loss, cost, damage or liability
asserted against, imposed upon or incurred by Purchaser as a result of any
claim, suit or action made or brought by any third party against Seller or any
of its affiliates arising out of any use of the Seller Marks or the Seller
Systems pursuant to the Seller License. This indemnification shall survive
indefinitely.
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G. Seller hereby agrees to cause its affiliates to take such further
actions as Purchaser may reasonably request to confirm and perfect the grant of
license made pursuant to this Section
H. Purchaser may transfer its rights to the Seller Systems without
restriction, but may not transfer its rights to the Seller Marks.
4. CLOSING.
The closing or settlement of the purchase and sale of each of the
Operating Residences contemplated by this Agreement shall be held at such time
and at such place as Seller and Purchaser shall mutually agree. The parties
hereby acknowledge that, to facilitate an orderly transition of the Operating
Residences from Seller to Purchaser, it will likely be desirable to schedule
multiple closings whereby closings will be held with respect to one or more (but
less than all) of the Operating Residences during the period commencing February
1, 1999 and ending March 31, 1999. Notwithstanding the foregoing, in the event
that all conditions to closing with respect to any particular Operating
Residence have been either satisfied or waived by the party for whose benefit
they were imposed, and Seller and Purchaser have not agreed upon an alternative
closing date, time and place, a closing for such Operating Residence shall be
held at 10:00 a.m. on March 31, 1999, at the offices of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP,
2700 International Tower, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇., ▇.▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇. Each
closing of one or more Operating Residences contemplated hereby shall be
referred to herein as a "Residence Closing" and the date of any such Residence
Closing shall be referred to herein as the "Residence Closing Date."
A. Delivery; Possession. At the Residence Closing for any Operating
Residence, Seller shall deliver to Purchaser the items required of Seller as
elsewhere set forth herein and Purchaser shall deliver to Seller the Residence
Purchase Price, subject to the prorations and adjustments as herein provided,
and the items required of Purchaser as elsewhere set forth herein. Seller shall
deliver possession of the applicable Operating Residence to Purchaser at the
time of such Residence Closing, subject only to the applicable Permitted Title
Exceptions (as hereinafter defined).
B. Transfer Taxes. The parties agree that any and all city, county or
state conveyance or transfer taxes, state stamp or documentary taxes and surtax
stamps due upon the transfer of any Operating Residence or the deed evidencing
same (including recording costs) shall be borne by the party that customarily
pays such cost (or split between the parties in accordance with such custom) in
the state in which the applicable Operating Residence is located. In the event
that the parties are unable to agree in good faith what is customary for payment
of such costs, then, absent manifest error, the decision of Title Company (as
hereinafter defined) as to what is customary for payment of such costs in such
states shall be binding.
C. Seller's Closing Costs. Seller shall pay the costs (including
recording costs) of any cure of title defects required of Seller hereunder and
the fees and expenses of Seller's own attorneys. All costs of satisfying any and
all Monetary Encumbrances (as hereinafter defined), including without limitation
the amount of the outstanding principal, accrued but unpaid outstanding
interest, all prepayment penalties and all other sums that must be paid to cause
the
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holder of any Monetary Encumbrance to release such Monetary Encumbrance, shall
be borne by Seller.
D. Purchaser's Closing Costs. Purchaser shall pay the cost of the title
examinations, the premium for the Title Policies (as hereinafter defined), the
costs of any surveys of the Real Property obtained by Purchaser, the costs of
any other investigations, studies and appraisals conducted by Purchaser, and the
fees and expenses of Purchaser's own attorneys.
E. Existing Fines and Penalties. If any governmental authorities or
agencies have levied any fines, penalties or assessments against any Operating
Residence or Seller resulting from failure or alleged failure to comply with any
regulatory or other governmental requirements (hereinafter collectively referred
to as "Fines"), and Seller fails to pay any such Fines prior to the Residence
Closing for such Operating Residence, and the failure to pay such Fines or any
portion thereof (i) prevents the issuance or assignment of any Permit to
Purchaser necessary for Purchaser's operation of such Operating Residence or
results in the imposition of conditions to such Permit unacceptable to Purchaser
or (ii) otherwise prohibits Purchaser's right to operate the Operating Residence
for the licensure category and number of Residents identified on Schedule 1,
then the full amount of such Fines, together with any additional penalties or
interest, shall be withheld from the Residence Purchase Price payable to Seller
and shall be paid directly to the appropriate governmental officials or
agencies.
F. Other Costs. All other closing costs shall be paid by the party
incurring same.
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5. TITLE.
At each Residence Closing, Seller shall convey and transfer to
Purchaser such good, indefeasible fee simple and marketable title to the
applicable Operating Residence as will enable Chicago Title Insurance Company
("Title Company") to issue its full coverage, American Land Title Association
Standard Coverage Owner's Policy of Title Insurance with the standard exceptions
therein deleted, and with endorsements to include, at a minimum, zoning, access,
comprehensive, survey and, if available in the state of such Operating
Residence, utility availability and contiguity coverage (collectively referred
to herein as the "Title Policy") in the amount of the applicable Residence
Purchase Price, subject only to those matters hereinafter defined as the
"Permitted Title Exceptions"; provided, however, in the event that Seller is
unable to comply with this sentence due to the existence of a Non-Monetary
Defect (as hereinafter defined) which does not constitute a Permitted Title
Exception, Seller shall not be deemed to be in default hereunder, but Purchaser
shall not be obligated to close the acquisition of the Operating Residence
affected thereby and the parties shall proceed as set forth in Section 14
hereof. Title to each Operating Residence shall be free and clear of, and shall
not be subject to mechanics', materialmen's or similar liens, pledges,
mortgages, deeds of trust, security deeds, security agreements, liens,
judgments, conditional sales contracts, UCC financing statements or fixture
filings, encumbrances, ground rents, past due taxes or assessments, fines,
levies or other encumbrances of a monetary nature (herein collectively referred
to as "Monetary Encumbrances") or leases, tenancies, parties in possession,
covenants, conditions, restrictions, right-of-ways, easements, encroachments or
any other agreements, contracts, rights, acts or other matters of any nature
affecting the title thereto, except as permitted in this Agreement or the
Permitted Title Exceptions.
A. Examination of Title. Provided that Seller delivers to Purchaser
copies of Seller's existing title policies (and not just commitments) and
surveys for the Operating Residences within ten (10) days after the date of this
Agreement, Purchaser shall have until the date forty-five (45) days after the
date of this Agreement to examine title to each of the Operating Residences and
to obtain Surveys (as hereinafter defined) and to deliver to Seller copies of
title commitments issued by Title Company and such Surveys. Such forty-five (45)
day period shall be extended one (1) day for each day that Seller is late in
delivering the copies of Seller's title policies and surveys (provided that if
Seller notifies Purchaser that Seller lacks such items, such forty-five (45) day
period shall commence as of the date of such notice). Purchaser shall, within
such period, notify Seller in writing of any defects in title which may be
revealed by Purchaser's examination (which defects may include any matters
revealed by the Surveys), including Monetary Encumbrances and any title defects
that are non-monetary in nature other than Permitted Title Exceptions
("Non-Monetary Defects"). Purchaser agrees that Purchaser shall not object to
(A) any recorded utility easements serving only an Operating Residence or any
recorded utility easements serving adjacent properties and located on the Real
Property, but, with respect to all such recorded utility easements Purchaser
shall not object if and only to the extent (i) any building constituting a part
of the Improvements for such Operating Residence does not encroach upon and is
not constructed over such easement, (ii) such easement has been located and
identified by the surveyor on the Survey applicable thereto, and (iii) such
easement does not render title unmarketable or unreasonably interfere with the
current or future operations of the
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Operating Residence, (B) any minor encroachments of improvements such as
fences, paving or similar improvements, and (C) any other matters as Purchaser
in the exercise of good faith reasonably determines will not have a material
adverse impact on Purchaser's operation of the Operating Residence or otherwise
is a defect that is not a material impediment to Purchaser's ability to finance
or convey such Operating Residence. (A) - (C) shall be deemed to be "Permitted
Title Exceptions" hereunder. Within ten (10) days after Seller's receipt of
Purchaser's notice with respect to any Operating Residence, Seller shall give
notice to Purchaser either (x) refusing to cure the applicable Non-Monetary
Defects or (y) setting forth Seller's intent to cure such Non-Monetary Defects
and stating in detail how Seller will accomplish same. Failure of Seller to
timely give such notice shall be deemed to be a refusal by Seller to cure any
such Non-Monetary Defects. Upon the later of receipt of Seller's notice or
expiration of the ten (10) day period, then Purchaser may, at any time prior to
ten (10) days after the receipt by Purchaser of Seller's response or expiration
of Seller's response time, by notice to Seller, (i) elect to terminate
Purchaser's obligation to purchase such Operating Residence pursuant to this
Agreement, whereupon the provisions of Section 14 shall be applicable with
respect to such Operating Residence, or (ii) accept title to such Operating
Residence subject to the Non-Monetary Defects that Seller has not undertaken to
cure, in which event such Non-Monetary Defects, together with all title
exceptions and matters appearing on the Title Commitment with respect to such
Operating Residence to which Purchaser did not object, will be deemed Permitted
Title Exceptions hereunder. If Seller elects option (y) as to any Operating
Residence and at the applicable Residence Closing Seller fails to cure the
applicable Non-Monetary Defects in the manner Seller has undertaken to so cure
in its notice to Purchaser to the satisfaction of Purchaser, Purchaser will
again have the options set forth in (i) and (ii) above. Seller agrees not to
further voluntarily alter or encumber in any way title to any Operating
Residence after the date of this Agreement, except for encumbrances imposed in
the ordinary course of business of which Seller notifies Purchaser and which
Seller will cause to be removed at or prior to the applicable Residence
Closing. In the event that Purchaser fails to timely notify Seller of title
defects as to any Operating Residence, then such failure to notify Seller shall
constitute a waiver of Purchaser's right to object to any Non-Monetary Defects
with respect to any Operating Residence but shall not be a waiver of Seller's
absolute obligation hereunder to remove Monetary Encumbrances, nor a waiver of
Purchaser's right to object to matters that arise subsequent to such date.
Purchaser shall have the right to re-examine and update title to any Operating
Residence and update the applicable Survey through and including the applicable
Residence Closing Date and in the event any such examination or update reveals
any new matters first arising or appearing of record subsequent to Purchaser's
first examination of title (other than Permitted Title Exceptions), then (i) if
such new matters were voluntarily imposed by Seller in violation of this
Section 5.A, Seller shall be in default hereunder and the provisions of Section
18.B shall apply or (ii) if such new matters were not voluntarily imposed by
Seller, then Purchaser shall have the right to object to same and will again
have the options set forth in (i) and (ii) above.
B. Survey Matters. Purchaser may obtain a current as-built plat of
survey ("Survey") of the Land for each Operating Residence. Each Survey shall be
prepared for and certified by a registered land surveyor licensed as such in the
state in which the Operating Residence is
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located. Purchaser's and Seller's rights and obligations with regard to title
defects revealed by Surveys shall be those indicated in Section 5.A. above.
6. PRORATIONS AND CREDITS AT CLOSING.
In each proration set forth below, the portion thereof allocable to
periods beginning with the applicable Residence Closing Date shall be credited
to Purchaser, or charged to Purchaser, as applicable, as of 12:01 a.m. on the
applicable Residence Closing. The following items shall be prorated between
Purchaser and Seller or credited to Purchaser or Seller at the Residence Closing
of each Operating Residence:
A. Real Estate Taxes and Assessments. All ad valorem real estate taxes
with respect to the Operating Residence for the then current year shall be
prorated as of the applicable Residence Closing Date with Seller receiving a
credit for any such taxes paid in advance for any period after the applicable
Residence Closing Date or with Purchaser receiving a credit for the period prior
to and including the applicable Residence Closing Date for which such taxes have
not been paid by Seller. Seller shall pay all assessments levied upon the
Operating Residence prior to the applicable Residence Closing Date. In the event
that tax bills for the current year's taxes are not available on the applicable
Residence Closing Date, taxes shall be prorated based upon the tax bills for the
previous year and increased or decreased based upon any known increase or
decrease in the assessed valuation or the millage rate. Seller and Purchaser
hereby agree that the parties shall, if necessary, re-prorate the taxes when
actual tax bills for the current year are available.
B. Prepaid Resident Rent. Purchaser shall receive a credit for any
advance payments made by any Residents of the applicable Operating Residence to
the extent attributable to the applicable Residence Closing Date and any periods
thereafter.
C. Custodial Accounts. At the applicable Residence Closing, Seller
shall provide Purchaser with a written account of all funds belonging to
Residents at the Operating Residence that are held by Seller in a custodial
capacity (the "Custodial Accounts"). Such accounting shall set forth the names
of the Residents for whom such funds are held, the amounts held on behalf of
each Resident and Seller's warranty that the accounting is true, correct and
complete. At the applicable Residence Closing, Seller will either assign
Seller's rights in the Custodial Accounts to Purchaser or Seller will cause the
funds in the Custodial Accounts to be transferred to new accounts designated by
Purchaser or Seller will otherwise comply with applicable laws if a different
procedure is required with respect thereto.
D. Rents. Rents, including without limitation all payments received by
Seller from any Tenants under any Leases applicable to the Operating Residence
and all payments of all Residents under any Resident Agreements received prior
to the Residence Closing Date shall be prorated as of the applicable Residence
Closing Date and the portion thereof allocable to periods beginning with such
Residence Closing Date shall be credited to Purchaser at such Residence Closing.
Any checks for any such rental payments received after such Residence Closing by
Seller and belonging in their entirety to Purchaser shall be promptly endorsed
to Purchaser by
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Seller and promptly transmitted to Purchaser, and any checks for any rental
payments received after such Residence Closing by Seller and belonging in part
to Seller and in part to Purchaser shall be promptly deposited by Seller and
the part thereof belonging to Purchaser shall be promptly paid to Purchaser and
the balance shall be retained by Seller. In the event that on such Residence
Closing Date there shall be any unpaid rental payments due under any Lease,
then (i) for a period of ninety (90) days after the Residence Closing, any
rental payment received by Purchaser with respect to such Lease subsequent to
such Residence Closing Date shall be applied first to pay the current portion
of such rental payment due Seller under such Lease and the remaining portion of
such rental payment, to the extent applicable to a period beginning on or after
such Residence Closing Date, shall be retained by Purchaser in satisfaction of
amounts owed to it, and (ii) thereafter, Purchaser may apply such amounts first
to amounts owed to it. During such ninety (90) day period, Purchaser shall use
its reasonable efforts in the ordinary course of business to collect for Seller
amounts owed to Seller of which it has knowledge, but shall not be required to
employ counsel or any collection agency or to initiate litigation, ejectment
proceeding or use any extraordinary means of collection. Seller shall at all
times be entitled to pursue collection of any amounts owed to it, and Purchaser
shall cooperate with Seller in connection therewith.
E. Security Deposits. Purchaser shall receive a credit against the
applicable Residence Purchase Price at such Residence Closing for all Deposits
remaining outstanding to any Resident or Tenant for such Operating Residence.
F. Utility Expenses and Payments. Water, sewer, gas, waste fees, fire
protection, cable television, electric and all other utility expenses and
payments due or made with respect to such Operating Residence shall be prorated
as of such Residence Closing Date and the portion thereof allocable to periods
beginning with such Residence Closing Date shall be credited or charged to
Purchaser, as applicable, at such Residence Closing.
G. Utility Deposits. Seller shall receive a credit at such Residence
Closing for the amount of any utility or similar deposits made by Seller with
respect to such Operating Residence which are not refundable to Seller by the
holder thereof and which deposits are transferred to Purchaser at such Residence
Closing.
H. Service Contract Payments. All payments due or made under any
Service Contracts accepted by Purchaser in accordance with the provisions hereof
shall be prorated as of such Residence Closing Date and the portion thereof
allocable to periods beginning with such Residence Closing Date shall be charged
to Purchaser at such Residence Closing, and any amounts due under the Service
Contracts allocable to periods prior to such Residence Closing Date shall be
charged to Seller at such Residence Closing.
I. Personal Property Taxes. All ad valorem personal property or similar
taxes with respect to the Personal Property at such Operating Residence for the
current year shall be prorated as of such Residence Closing Date with Seller
receiving a credit for any such taxes paid in advance for any period after such
Residence Closing Date or with Purchaser receiving a credit for the period prior
to and including such Residence Closing Date for which such taxes have not
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been paid by Seller. In the event that tax bills for the current year's taxes
are not available on such Residence Closing Date, taxes shall be prorated based
upon the tax bills for the previous year after taking into account any known
increases or decreases. Seller and Purchaser shall, if necessary, re-prorate
the taxes when actual tax bills for the current year are available.
J. Accrued Benefits. At such Residence Closing, Seller shall provide
Purchaser with a schedule of all accrued sick, vacation and personal holiday pay
earned, accrued and outstanding by Seller's employees working at such Operating
Residence ("Employees") as of such Residence Closing Date ("Seller's Benefits"),
which schedule shall include the names, addresses and amount of Seller's
Benefits for each Employee to whom such amounts are owed, and shall be certified
as true, complete and correct by Seller. At such Residence Closing, Seller shall
be charged with the amount of Seller's Benefits, which at Purchaser's election,
(i) shall be paid directly to the respective Employee entitled to same or (ii)
with respect to Employees employed by Purchaser as of such Residence Closing
Date (such Employees, "Continued Employees"), shall be credited to Purchaser.
K. Payroll. Seller shall receive a charge for all salaries, benefits
and other payments owed to all Continued Employees of such Operating Residence
through and including 12:01 a.m. on such Residence Closing Date.
L. Reproration after Closing. In the event that the actual amounts of
any of the aforesaid proration items are unavailable as of such Residence
Closing Date, then such proration shall be made on the basis of an amount
reasonably estimated by Purchaser and Seller at such Residence Closing and
Purchaser and Seller shall thereupon re-prorate such items at such times as the
exact amounts for such items become available.
M. Performance of Obligations. To the extent that any amount is
credited in favor of Purchaser hereunder, Purchaser shall thereafter make the
payments of taxes, hold and disburse the Custodial Accounts, refund or apply the
Security Deposits, pay the utility bills or Service Contracts, credit the
Employees entitled to Seller's Benefits or otherwise discharge any similar
obligation that Seller may have had to any third party with respect to the item
so credited, but only to the extent of the amount so credited to Purchaser.
7. ACCOUNTS RECEIVABLE.
On and after the Residence Closing Date with respect to each Operating
Residence, Purchaser shall assume responsibility for billing and collection of
all payments on account of services rendered at such Operating Residence
including, without limitation, any payments or reimbursements made or to be made
by any federal, state or local governmental agency or organization for medical
or therapeutical care or other goods or services rendered or supplied to any
Resident, including, without limitation, payments or reimbursements resulting
from third-party payor agreements such as Medicaid, Medicare, private pay
insurance companies or other similar programs (herein collectively referred to
as "Receivables"). In order to facilitate Purchaser's collection efforts with
respect to Receivables accruing prior to the Closing, Seller agrees to deliver
to Purchaser, within a reasonable time after each Residence Closing, a schedule
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identifying all of those Receivables with balances owing for the period prior to
such Residence Closing Date and Purchaser agrees to forward to Seller any
payments received which are specifically designated as being applicable to
services rendered prior to such Residence Closing to Seller. In the event such
payments specifically indicate that they relate to services rendered on or after
such Residence Closing Date, such payments shall be retained by Purchaser. With
respect to any payments received by Purchaser during the first ninety (90) days
after the applicable Residence Closing Date that do not specify whether such
payments relate to services rendered prior or subsequent to such Residence
Closing Date, such payments shall be applied first to any amounts due and owing
to Seller and the remaining portion shall be applied to amounts due to
Purchaser; thereafter such amounts may be applied first to amounts owing to
Purchaser. During such ninety (90) day period, Purchaser shall use its
reasonable efforts in the ordinary course of business to collect pre-closing
Receivables, but shall not be obligated to employ counsel or any collection
agency or to initiate any litigation, ejectment proceedings or use any
extraordinary means of collection, and, subject to the foregoing, shall have no
liability for uncollectible pre-closing Receivables. In the event that either
party shall receive any check for Receivables belonging in part to such party
and in part to the other, such party shall promptly deposit such check and the
part thereof belonging to the other party shall be promptly paid to such party.
Seller shall at all times be entitled to pursue collection of any amounts owed
to it, and Purchaser shall cooperate with Seller in connection therewith.
8. CONVEYANCES AND DELIVERIES AT EACH RESIDENCE CLOSING.
A. Deed; Affidavit. At each Residence Closing, Seller shall convey the
Land comprising a part of such Operating Residence, together with any easements
appurtenant thereto and any Improvements thereon, to Purchaser by Limited
Warranty Deed subject only to the Permitted Title Exceptions and using a legal
description based upon the Survey and approved by Title Company. The Limited
Warranty Deed shall be accompanied by a completed and executed transfer tax or
similar instrument in the prescribed form. Seller shall also execute and deliver
an owner's affidavit in the form prescribed by Title Company and reasonably
acceptable to Seller to enable Title Company to endorse over or delete the
exceptions from the Title Policy for mechanics', materialmen's and other similar
liens, rights of parties in possession under unrecorded leases (other than the
applicable Residents), and the other standard exceptions.
B. ▇▇▇▇ of Sale. At each Residence Closing, Seller shall also convey
the Personal Property comprising a part of such Operating Residence to Purchaser
by ▇▇▇▇ of Sale, which ▇▇▇▇ of Sale shall incorporate by reference the
warranties and representations set forth herein with respect to the Personal
Property, subject to the limitations contained herein. Seller shall also deliver
properly endorsed certificates of title to any motor vehicles to be conveyed
pursuant hereto.
C. Assignment of Residency Agreements and Leases. At each Residence
Closing, Seller shall assign to Purchaser Seller's interest in and to the
Residency Agreements and the Leases comprising a part of such Operating
Residence by a duly executed assignment of Residency Agreements and Leases and
Purchaser shall assume Seller's obligations thereunder and first arising on or
after the Residence Closing Date by a duly executed assumption.
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D. Assignment of Service Contracts. At each Residence Closing, Seller
shall assign to Purchaser Seller's interest in the Service Contracts and the
Operating Interests comprising a part of such Operating Residence by a duly
executed assignment and Purchaser shall assume Seller's obligations thereunder
and first arising on or after the Residence Closing Date by a duly executed
assumption.
E. Notices of Assignment. On or promptly after each Residence Closing
Date (or earlier if Purchaser and Seller shall so agree), Seller and Purchaser
shall send a written notice, in form and content satisfactory to Purchaser and
Seller, to each Resident of such Operating Residence and their respective legal
guardians, next of kin or others designated to be notified in the event of an
emergency or otherwise, and all Tenants under the Leases of such Operating
Residence, informing them of the sale of the applicable Operating Residence and
of the assignment to Purchaser of Seller's interest in the Residency Agreements
and the Leases and directing that all rental payments and other sums payable on
or after such Residence Closing Date shall be paid to Purchaser at the address
set forth in the notice. If Purchaser shall so elect, Seller and Purchaser shall
also send a written notice, in form and content acceptable to Purchaser and
Seller, to each party to a Service Contract informing such party of the
assignment to Purchaser of Seller's interest in such Service Contract. Following
the filing by Purchaser of an application with the applicable state agency for a
license to operate the Operating Residence, Seller and Purchaser shall send any
other written notice and make any necessary filing as may be required under
applicable law with respect to sale of the Operating Residence or a transfer of
ownership of such Operating Residence.
F. Books and Records, Floor Plans, Plans and Specifications, Medical
Records, Original Documents and Other Instruments. At or promptly after each
Residence Closing, Seller shall deliver to Purchaser the originals (or, if
originals are unavailable, duplicate originals or copies) of all Files related
to such Operating Residence not previously delivered by Seller pursuant to the
provisions of Section 1 this Agreement, subject to Seller's rights of access at
all reasonable times at Seller's expense to examine and make copies of any and
all of said original Files for a period of three (3) years after such Residence
Closing Date; and Purchaser shall be obligated to retain such Files for such
three (3) year period.
G. Section 1445 Certificate; Form 8594. At each Residence Closing,
Seller shall also execute and deliver to Purchaser a certificate and affidavit
with respect to Section 1445 of the Internal Revenue Code stating that Seller is
not a foreign person as defined in said Section 1445 and applicable regulations
thereunder. At such Residence Closing, Seller and Purchaser shall execute an
agreement to timely file IRS Form 8594 with the Internal Revenue Service
reflecting the agreed upon allocation (if any) of the Residence Purchase Price
as provided in Section 2.B.
H. Termination of Management Agreement and Service Contracts. At each
Residence Closing, Seller shall also deliver to Purchaser an executed original
of an agreement terminating, as of such Residence Closing Date, any and all
management agreements entered into by Seller with respect to the Operating
Residence, and an executed original of an agreement
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terminating as of such Residence Closing Date, any Service Contracts that
Purchaser is not obligated to (and does not elect to) maintain in force after
such Residence Closing Date. To the extent assignable and transferable by
Seller to Purchaser without the consent or approval of any other party (or if
such consent or approval has been obtained), at each Residence Closing, Seller
shall assign, and Purchaser shall assume, all Service Contracts relating
exclusively to the operation of such Operating Residence entered into in the
ordinary course of business (unless on terms materially inconsistent with
industry standards) and any contract which may be terminated upon thirty (30)
days (or less) notice.
I. Closing Statement. At each Residence Closing, Seller and Purchaser
shall execute and deliver a Closing Statement which shall, among other items,
set forth the applicable Residence Purchase Price, all credits against such
Residence Purchase Price, the amounts of all prorations and other adjustments to
such Residence Purchase Price and all disbursements made at such Residence
Closing and which shall recite that the provisions of this Agreement shall
survive such Residence Closing in the manner expressly set forth herein.
J. Reaffirmation of Representations and Warranties. Subject to Seller's
right to update information under Section 12.C and furnish Schedules after the
date hereof pursuant to Section 21 of this Agreement, at each Residence Closing,
both Seller and Purchaser shall reaffirm in writing that all representations and
warranties (as so updated and qualified) made by each of them, respectively, are
true, correct and complete as of such Residence Closing Date as to all matters
relating to such Operating Residence or such party's good standing,
authorization, lack of bankruptcy or other matters related to such party.
K. Other Conveyances and Instruments. At each Residence Closing, Seller
shall also execute and deliver to Purchaser a conveyance or assignment of any
portion of the Operating Residence sold hereunder for which the conveyance or
assignment is not otherwise provided in this Section 8, and Purchaser shall
assume any other of Seller's obligations which it is required to assume
hereunder, subject to the limitations set forth herein.
9. SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS.
Seller represents, warrants and covenants to and with Purchaser that,
as to each Seller entity, as applicable, and as to each Operating Residence:
A. Title to Personal Property; Condition of Personal Property. The
Seller entity identified on Schedule I for each Operating Residence is the owner
of good, marketable and fee simple title to the Personal Property for such
Operating Residence free and clear of all encumbrances except for liens and
encumbrances which will be paid by Seller at the applicable Residence Closing
(provided, however, no representation or warranty is made hereunder with respect
to title to the Real Property or any portion thereof). There are no material
defects known to Seller in the order, repair, condition or sufficiency of the
Personal Property.
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B. Residency Agreements and Leases:
(i) Title. The Seller entities to be identified on
Schedule 1-C for each Operating Residence are the lessors or landlords
under the Leases and the Seller entities to be identified on Schedule
1-B for each Operating Residence are the owners and holders of the
Residency Agreements for such Operating Residences free and clear of
all encumbrances and each is entitled to receive the rents, issues or
profits from the Leases, the Residency Agreements and from the
Operating Residences. Without limiting the foregoing, the Leases and
the Residency Agreements are free and clear of any and all liens,
security interests and encumbrances except such liens, security
interests and encumbrances that secure indebtedness that shall be paid
in full by Seller at each Residence Closing and Seller has made no
assignment of any of the rights of Seller under any of the Leases, the
Residency Agreements or with respect to any of said rents, issues or
profits except as shall be so released at each Residence Closing.
(ii) Validity; No Defaults. The Leases and the Residency
Agreements are valid and enforceable and in full force and effect and
there are no material defaults under or with respect to the Leases or
the Residency Agreements on the part of Seller, and to Seller's
knowledge there are no material defaults on the part of any other party
to the Leases or the Residency Agreements and no conditions or facts
which, with the passage of time or giving of notice or both would
constitute such a default on the part of Seller or to Seller's
knowledge any such other party to any Lease or Residency Agreement,
other than any past due or delinquent rental payable under the Leases
and the Residency Agreements with respect to any Operating Residence as
will be more particularly set forth on Schedules 1-B and 1-C to be
delivered by Seller to Purchaser pursuant to Section 21 hereof.
(iii) Rent. Except as will be specifically set forth on
Schedules 1-B and 1-C, no more than one month's rents under the Leases
and the Residency Agreements have been paid in advance, and no rents
reserved in the Leases or the Residency Agreements have been assigned
and no rents for any period subsequent to the date of this Agreement
have been anticipated or collected in advance of the time when the same
becomes due under the terms of the Leases and the Residency Agreements.
With respect to each Operating Residence, the aggregate amount of all
past due Rent under all of the Residency Agreements as of the date of
this Agreement (or most recent date for which such information is
available, as indicated on such Schedule) does not exceed the amounts
set forth in Schedule 9-A.
(iv) Copies; No Other Agreements. All copies of the
Leases, the Residency Agreements, the Rent Roll and the Lease Summary
which have been or will be furnished by Seller to Purchaser are true,
correct and complete copies thereof. None of the Leases or the
Residency Agreements have been modified, amended or extended and there
are no other understandings, concessions, promises or agreements,
written or oral, between the parties thereto.
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(v) Rent Roll. The Rent Roll to be set forth on Schedule
1-B and the Summary of Leases to be attached hereto as Schedule 1-C
will be in all material respects accurate, complete and not misleading.
(vi) Scope of Leases. The Leases relate to the use of a
small portion of each Operating Residence and are intended solely to
facilitate the delivery of services for the convenience of Residents,
such as a beauty salon, pharmacy or other similar service and, if such
Leases relate to services being provided by any affiliate of Seller,
Purchaser shall have the right to cause Seller to terminate such Leases
as of the Residence Closing Date for the Operating Residence affected
thereby. No Lease is a ground lease or other lease encumbering or
affecting all or a substantial portion of any Operating Residence.
C. Title to Improvements; Condition of Improvements. Seller is the
owner of good and marketable fee simple title to the Improvements free and clear
of all encumbrances except for the Permitted Title Exceptions and except for
liens and encumbrances that will be paid by Seller at the Residence Closing
(provided, however, no representation or warranty is made hereunder with respect
to title to the Real Property or any portion thereof). There are no material
defects known to Seller in the order, repair or condition of the Improvements.
D. No Other Leases/Occupancies. There are no leases or other agreements
relating to use or occupancy of the Operating Residence, except for the
Residency Agreements and the Leases. No party other than the Residents or
Tenants have any right to occupancy of any portion of the Operating Residence.
No party other than the Residents or Tenants are actually occupying any portion
of the Operating Residence.
E. Other Contracts. As of the applicable Residence Closing Date, there
will be no management, real estate, leasing, rental commission, service,
maintenance, employment, union or other contracts of any kind or description in
existence relating to the applicable Operating Residence, except for the
Permitted Title Exceptions, the Residency Agreements, the Leases and the Service
Contracts to be assumed by Purchaser pursuant to Section 8.I hereof. Seller
will, prior to the applicable Residence Closing Date, terminate any and all
other such contracts applicable thereto.
F. Service Contracts. The Service Contracts to be assumed by Purchaser
pursuant to Section 8.I hereof are valid and enforceable and in full force and
effect. There are no material defaults under or with respect to the Service
Contracts on the part of Seller, and to Seller's knowledge there are no material
defaults on the part of any other party to any Service Contract and no
conditions or facts which, with the passage of time or the giving of notice, or
both, would constitute such a default on the part of Seller or to Seller's
knowledge any such other party to any Service Contract. All copies of the
Service Contracts which have been or will be furnished by Seller to Purchaser
are true, correct and complete copies thereof (except for immaterial omissions)
and such Service Contracts have not been modified, amended or extended and there
are no other material understandings, concessions, promises or agreements,
written or oral, between the parties thereto.
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G. Accuracy of Operating Statements. Seller has delivered to Purchaser
true, correct and complete copies of the unaudited income and expense statements
with respect to each Operating Residence for the period beginning October 1,
1997 and ending November 30, 1998 (or, if the applicable Operating Residence has
not been open or operated by Seller for such time, for such shorter period as
Seller shall have owned or operated such Operating Residence) (hereinafter
collectively referred to as the "Operating Statements"). The Operating
Statements were prepared in accordance with Seller's books and records and in
accordance with generally accepted accounting principles consistently applied
throughout the periods covered by such statements except that the Operating
Statements omit footnote disclosures and have not been audited, and the
Operating Statements fairly present the results of operations of each Operating
Residence for the periods then ended. At each Residence Closing, Seller shall
deliver updated unaudited income and expense statements through and including
the last calendar month ended thirty (30) days prior to the Residence Closing
Date and Seller shall be deemed to have made the foregoing representations and
warranties of Seller with respect to updated statements.
H. Accuracy and Completeness of Other Seller Documents and Records.
Seller will provide Purchaser with access to the Files after the date of this
Agreement.
I. Litigation and Other Proceedings. Except as set forth on Schedule
9-C to be delivered by Seller to Purchaser pursuant to the provisions of Section
21 hereof, there are no judgments, consent decrees, injunctions, litigation,
claims or proceedings (i) relating solely to Seller and not to any of the
Operating Residences and (ii) which, if adversely determined with respect to
Seller, would have a material adverse effect on HCR Manor Care's ability to
perform its obligations hereunder. In addition and not in limitation of the
foregoing, except as set forth on Schedule 9-B to be delivered by Seller to
Purchaser pursuant to the provisions of Section 21 hereof, there are no
judgments unsatisfied against Seller or any Operating Residence, except as set
forth on Schedule 9-B to be delivered by Seller to Purchaser pursuant to the
provisions of Section 21 hereof, or consent decrees or injunctions to which
Seller or any Operating Residence is subject, and there is no litigation, claim
or proceeding pending or to Seller's knowledge threatened against or relating to
Seller or Seller's ownership, operation of or title to any Operating Residence,
nor does Seller know of any governmental investigation relative to Seller or any
Operating Residence. Seller is not in the hands of a receiver nor has Seller
committed an act of bankruptcy nor has an order for relief been entered with
respect to Seller.
J. Compliance of Property With Zoning and Other Laws. Seller has not
received any notification from any governmental or public authority that any
Operating Residence currently violates any existing fire, health, building,
handicapped persons, environmental, sanitation, use and occupancy or zoning laws
or that any work is required to be done upon or in connection with any Operating
Residence or that any modifications or alterations now or in the future will
need to be made to maintain the licensure category of any Operating Residence.
Except as disclosed on Schedule 9-C to be delivered by Seller to Purchaser
pursuant to the provisions of Section 21 hereof, no notice or warning from any
governmental authority with respect to any failure or alleged failure of Seller
to comply with any law, regulation or order has been received by Seller.
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K. Environmental Matters. Except with respect to use, storage and
disposal in the ordinary course of business that complied in all material
respects with all applicable Environmental Laws, Seller has not used, nor
authorized, nor knowingly allowed the use of any Operating Residence, and to
Seller's knowledge no Operating Residence has been used, for the generating,
handling, treatment, storage, disposal or release of any hazardous substance,
hazardous waste, petroleum or petroleum products, asbestos, lead-based paint,
contaminant, pollutant or other words of similar import (hereinafter
collectively referred to as "Hazardous Substances") referred to or defined as
such under any applicable local, state or federal law or regulation regulating
the discharge of solid, liquid or gaseous waste into the environment or the
placement of structures or materials into any waters (surface or subsurface) or
otherwise regulating or appertaining to matters affecting the environment
(hereinafter collectively referred to as "Environmental Laws"). Seller has not
used, nor authorized, nor knowingly allowed the use of any Operating Residence,
and to Seller's knowledge no Operating Residence has been used, in any manner
other than in full compliance with all Environmental Laws. In furtherance of and
not in limitation of the foregoing:
(i) Seller has received no notice and there are no
claims, actions, suits, proceedings or investigations known to Seller,
pending or threatened, related to Hazardous Substances with respect to
the ownership, use, condition, or operation of any of the Operating
Residences, in any court or before or by any federal, state or other
governmental or quasi-governmental agency or authority or private
arbitration tribunal (hereinafter collectively referred to as
"Environmental Litigation").
(ii) To Seller's knowledge, Seller has complied with all
applicable reporting requirements under all Environmental Laws
concerning the disposal or release of Hazardous Substances at or from
all Operating Residences, and Seller has made no such reports.
L. No Options or Other Interests. No Resident, Tenant or any other
person or entity has any deed, option or other evidence of any right or interest
in or to any Operating Residence except for each Tenant's and each Resident's
rights to possession as set forth in and as evidenced by such Tenant's Lease or
such Resident's Residency Agreement.
M. Assessments, Fees and Liens. No assessments for public improvements
have been made against any Operating Residence which are due and payable and
which will remain unpaid at the Residence Closing. As of each Residence Closing
Date there will be no outstanding bills, invoices, charges, fees or expenses
owing, accrued or incurred with respect to the applicable Operating Residence or
by or on behalf of Seller which have not been paid in full on or prior to the
Residence Closing Date, except such items (i) as shall be incurred in the
ordinary course of business, (ii) for which Seller shall be obligated to pay all
amounts owed following the Residence Closing Date and (iii) which are not
Monetary Encumbrances. At the Residence Closing there will be no Monetary
Encumbrances and no mechanics', materialmen's or laborers' liens against the
applicable Operating Residence (either filed or inchoate), no claims for labor,
services, profit or material furnished for constructing, repairing or improving
such Operating Residence which remain unpaid, and no other chattel liens,
conditional sales contracts
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or security interests against such Operating Residence, other than those items
as shall be paid by Seller and released at such Residence Closing.
N. Pending Assessments and Condemnation Proceedings. Seller has
received no notice of, and there is no pending or threatened special assessment
or condemnation or eminent domain proceedings which would affect any Operating
Residence, or any part thereof or access thereto.
O. Disclosure. No statement, warranty or representation by Seller
contains an untrue statement of material fact or omits to state a material fact
necessary in order to make the statements made in light of the circumstances
under which such statements are made not misleading.
P. Authority. Each Seller entity is duly formed, validly existing and
in good standing under the laws of the state of its incorporation or
organization, and each has all necessary power to execute and deliver this
Agreement and perform all its obligations hereunder. Each Seller entity has the
full power and authority to enter into and perform this Agreement and the
execution, delivery and performance of this Agreement by such Seller entity (i)
has been duly and validly authorized by all necessary action on the part of such
Seller entity, (ii) does not conflict with or result in a violation of such
Seller entity's articles of incorporation, bylaws, partnership agreement,
operating agreement or other governing instruments, or any judgment, order or
decree of any court or arbiter in any proceeding to which such Seller entity is
a party, and (iii) does not conflict with or constitute a material breach of, or
constitute a material default under, any contract, agreement or other instrument
by which such Seller entity is bound or to which it is a party. This Agreement
is the valid and legally binding obligation of each Seller entity enforceable in
accordance with its terms.
Q. Licensure and Regulatory Matters. Each Operating Residence is duly
and properly licensed by all appropriate federal, state and local governmental
agencies to operate and perform the services rendered therein as an assisted
living or dementia care residence offering the service levels and with the
number of units set forth on Schedule I hereof and is duly authorized under all
third-party payor or provider programs to receive payments or reimbursements
currently received. Except as will be set forth in Schedule 9-C, all licenses,
approvals, accreditations or certificates, including, without limitation, the
Permits, are in full force and effect and in good standing and there is no
action pending, or to Seller's knowledge threatened or recommended by the
appropriate state, federal or local agency having jurisdiction to revoke,
withdraw or suspend any license, approval, accreditation or certificate
including without limitation the Permits to operate the Operating Residence or
to terminate or fail to renew any third-party payor agreement for payment or
reimbursement, nor has Seller received any warning or notice of any violation of
any applicable law with respect to services and care provided to Residents or
the operation of the Operating Residence except as will be set forth on Schedule
9-C. Seller has or will within thirty (30) days after the date of this Agreement
delivered to Purchaser true, correct and complete copies of the licensing
surveys and inspection reports for the previous three (3) calendar years as well
as copy of the license to operate the
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Operating Residence and the other material Permits (including without
limitation the certificates of occupancy).
R. Reports. Seller to Seller's knowledge has filed all material
reports, disclosures and other information as is required under the laws or
regulations of any federal, state or local governmental organization or agency.
S. Employees; Unions. Schedule 9-D, which Seller shall provide to
Purchaser in accordance with the provisions of Section 21 hereof, is a true,
correct and complete list of the payroll report for all Employees employed at
each Operating Residence, which payroll report identifies each Employee, their
hire date, such Employee's rate of pay and any bonuses or other incentives
promised or contemplated with respect to such Employee. Except to the extent set
forth in such reports, there are no other employees or others entitled to
compensation or a salary at the Operating Residence. Seller is not a party to
any collective bargaining agreements, contracts of employment, profit sharing,
bonus, deferred compensation, stock option, severance pay or pension or
retirement plans with respect to any of its Employees at the Operating Residence
and is not a party to or aware of any labor dispute or grievance with respect to
the Property except as shall be summarized on Schedule 9-D. None of the
Employees at the Operating Residences is employed pursuant to a written
employment agreement.
From and after the date of this Agreement, Seller will not take any
action, or fail to take any action or consent to or affirmatively permit any
third party to take or fail to take any action, which would reasonably be
expected to result in an inaccuracy or a breach of any warranty, representation
or covenant contained in this Section 9 or which would impair or impede Seller's
ability to reaffirm such representations, warranties and covenants as true,
correct and complete as of the Residence Closing Date.
10. PURCHASER'S REPRESENTATIONS AND WARRANTIES.
Purchaser, as of the date of the execution of this Agreement by
Purchaser, represents and warrants to Seller as follows:
A. Organization, Power and Authority. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and has all necessary power to execute and deliver this Agreement and
perform all its obligations hereunder. Purchaser has the full power and
authority to enter into and perform this Agreement and the execution, delivery
and performance of this Agreement by Purchaser (i) has been duly and validly
authorized by all necessary action on the part of Purchaser, (ii) does not
conflict with or result in a violation of Purchaser's Restated Articles of
Incorporation or Restated Bylaws, each as amended, or any judgment, order or
decree of any court or arbiter in any proceeding to which Purchaser is a party,
and (iii) does not conflict with or constitute a material breach of, or
constitute a material default under, any contract, agreement or other instrument
by which Purchaser is bound or to which it is a party. This Agreement is the
valid and legally binding obligation of Purchaser enforceable in accordance with
its terms.
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B. No Bankruptcy. Purchaser is not in the hands of a receiver nor has
it committed an act of bankruptcy nor has an order for relief been entered with
respect to Purchaser.
11. PRE-CLOSING COVENANTS.
Purchaser and Seller covenant and agree that between the date hereof
and the last to occur of the Residence Closing Dates:
A. Inspection of Property. Seller shall allow Purchaser and its agents
to inspect all Operating Residences and any part thereof and all books, records
and accounts located at the Operating Residences, or relating solely to the
Operating Residences and located elsewhere or any of Seller's operations
thereon, at such times and from time to time as Purchaser may reasonably request
and as shall be reasonably acceptable to Seller.
B. Compliance with Laws, Leases, Contracts. Seller shall comply in all
material respects with all laws, ordinances, regulations and orders relating to
all Operating Residences, the operation thereof and the Permits and with all the
terms, conditions and provisions of the Residency Agreements and the Leases, and
with the requirements of all liens and encumbrances, agreements and other
contractual arrangements to which any Operating Residence or Seller is subject
and make all payments required to be paid thereunder.
C. Standard of Operation and Maintenance. Seller shall operate, manage
and maintain all Operating Residences in the ordinary course of business and in
at least the same manner as Seller has been so operating immediately prior to
the date of this Agreement and with due regard to the proper maintenance and
repair of such Operating Residences. Seller will use its reasonable efforts to
preserve the goodwill of all Residents and to maintain all present Resident
occupancy levels.
D. New Leases and Modifications to Existing Leases; Residency
Agreements. After the date of this Agreement (and except as may be reflected on
the applicable Rent Roll), Seller shall not enter into any new Leases except in
the ordinary course of business and that otherwise will not prevent Seller from
giving the representation and warranty set forth in Section 9.B.(vi) or cancel,
modify, extend or renew any existing Lease, nor waive any default under or
accept any surrender of any Lease, nor accept any prepayment of rent thereunder
without in each case the prior written consent of Purchaser, which consent will
not be unreasonably withheld or delayed. Seller may enter into new Residency
Agreements in the ordinary course of business and may extend or renew any
existing Residency Agreement provided same are on substantially similar economic
terms and are for the same length of time as was customary for the Operating
Residence during the previous twelve (12) month period. Seller shall update the
applicable Rent Roll immediately prior to each Residence Closing and shall
certify same as true, correct and complete as of the applicable Residence
Closing Date.
E. New Service Contracts and Modifications to Existing Service
Contracts. After the date of this Agreement, and except in the ordinary course
of business consistent with Seller's prior conduct of business at the Operating
Residences, Seller shall not enter into any new Service
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Contracts which cannot be terminated, without penalty, prior to the applicable
Residence Closing Date, and Seller shall promptly notify Purchaser if any
Service Contracts are entered into and shall provide copies of same with such
notification. In addition, and except in the ordinary course of business
consistent with Seller's prior conduct of business at the Operating Residences,
Seller shall not cancel, modify, extend or renew any Service Contract, nor
waive any default under or accept any surrender of any Service Contract,
without in each case the prior written consent of Purchaser, which consent will
not be unreasonably withheld or delayed. Seller shall update the List and
Summary of Service Contracts attached hereto as Schedule 1-F prior to the
applicable Residence Closing and shall certify same as true, correct and
complete at such Residence Closing.
F. Notice of Revision of Representations Due to Discovery of New Facts.
Seller shall notify Purchaser as promptly as is reasonably practicable but in
any event prior to the Residence Closing Date if Seller becomes aware of any
fact, transaction, event or occurrence which could make any of the warranties,
representations and covenants of Seller under this Agreement not true with the
same force and effect as if made on or as of the date hereof.
G. Personal Property Inventory. Except in the ordinary course of
business consistent with Seller's prior conduct of business at the Operating
Residences and provided Seller promptly replaces same, Seller shall not remove
any of the Personal Property from any Operating Residence nor use any of the
Personal Property except such use thereof as is normal and customary in the
operation and maintenance of the Property. Seller covenants that all Personal
Property shall be maintained in the ordinary course of business consistent with
past practices of Seller and at customary levels of reserves and all Personal
Property will be available and conveyed to Purchaser on the applicable Residence
Closing Date. Seller shall update the Personal Property Inventory attached
hereto as Schedule 1-E(ii) immediately prior to the Residence Closing and shall
certify same as true, correct and complete at such Residence Closing.
H. Transfer of Permits. Purchaser shall be responsible for preparation
of all applications and notices and payment of all fees to enable all Permits to
be transferred to or issued in the name of Purchaser and, in connection
therewith Seller shall execute all applications and instruments reasonably
required in connection with the transfer of all Permits, to the extent
transferable, in order to transfer the benefits of each such Permit to Purchaser
and, if requested by Purchaser, Seller shall otherwise cooperate with
Purchaser's efforts to have all permits, licenses and certificates of occupancy
or equivalent governmental instruments required for the operation of the
Operating Residence issued to and in the name of Purchaser on or prior to the
applicable Residence Closing Date, at no cost to Seller. Seller shall use its
best efforts to preserve in force all existing Permits and to renew all those
expiring prior to the applicable Residence Closing Date on terms acceptable to
Purchaser. If any such Permit shall be suspended or revoked, Seller shall
promptly notify Purchaser and shall diligently take all measures reasonably
necessary to cause the reinstatement of such Permit without any additional
limitation or condition and shall cause such Permit to be reinstated. Seller
shall not seek or allow any amendment to any Permit which would alter the
existing uses of the Operating Residence or any part thereof.
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I. Compliance of Improvements and Real Property. Seller shall cooperate
with Purchaser (at no cost to Seller) in Purchaser's efforts to obtain
satisfactory evidence that each of the Operating Residences and the use and
operation thereof meet and comply with all deed restrictions, restrictive
covenants, building, zoning and environmental laws and any other covenants,
restrictions or regulations, if any, affecting the Real Property (collectively,
the "Land Use Requirements"). Such evidence shall include but shall not be
limited to obtaining copies of certificates of completion or occupancy and
letters or other evidence from the agencies administering compliance with Land
Use Requirements indicating that all of the Improvements, as constructed and
operated, fully comply with said requirements. In addition, said items shall be
directed to Purchaser specifically with knowledge on the part of the party
issuing same that Purchaser will be relying upon the same and said items shall
be submitted to Purchaser as soon as it is reasonably possible to do so.
J. Existing Employees. Seller will continue to employ the Employees
employed at each of the Operating Residences in the ordinary course of business
through and until the applicable Residence Closing (subject to Seller's right to
terminate such Employees for cause in the ordinary course of business) and
Seller agrees not to increase the compensation or other benefits or bonuses
payable or to become payable to any of the Employees. Purchaser shall have the
right to employ the Employees upon or subsequent to the applicable Residence
Closing upon such terms as Purchaser shall offer and as shall be acceptable to
the Employees; provided, however, that Purchaser hereby agrees that, upon the
Residence Closing of such Operating Residence, Purchaser shall extend an offer
of continued employment at such Operating Residence to the Employees thereof at
existing salary or wage levels and on other terms and conditions which, taken as
a whole, are substantially equivalent to the terms and conditions under which
such Employees are currently employed. The parties hereto hereby agree that the
provisions of this Section 11(J) are for the sole and exclusive benefit of the
parties hereof, and, accordingly, no third party (including Employees) shall be
entitled to rely upon or enforce any of the agreements set forth herein.
K. Notices and Consents. Each of Purchaser and Seller will (and will
cause any of its affiliates to) give any notices to, make any filings with, and
use commercially reasonable efforts to obtain any authorizations, consents and
approvals of governments and governmental agencies required in connection with
consummating the sale of the Operating Residences pursuant hereto; provided that
with respect to Permits, Section 11.H shall govern. Without limiting the
generality of the foregoing, each of the parties hereto will file any
Notification and Report Forms and related material that it may be required to
file with the Federal Trade Commission and the Antitrust Division of the United
States Department of Justice under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended (the "HSR Act"), will use commercially reasonable
efforts to obtain an early termination of any applicable waiting period and will
make any further filings pursuant thereto that may be necessary or advisable in
connection therewith.
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12. PURCHASER'S INSPECTION OF PROPERTY.
A. Access. Purchaser shall, at all reasonable times as reasonably
scheduled with Seller prior to the applicable Residence Closing Date, have the
privilege of visiting and inspecting each Operating Residence with its agents,
representatives and contractually retained independent contractors as needed to
inspect, examine, test, appraise and survey such Operating Residence, including,
but not limited to, investigations of the zoning status and physical status
thereof and verification of all information made or to be made available to
Purchaser with respect to such Operating Residence. In addition, Purchaser shall
have the right to obtain such letters, certificates or statements from
appropriate governmental officials or other experts concerning zoning and other
matters related to the Operating Residences. This privilege shall include the
right to make surveys, examinations, appraisals and other tests to obtain any
relevant information necessary to determine subsurface and topographic
conditions, including, but not limited to, Hazardous Substances studies, soil
tests, asbestos analysis and structural review, all of which tests, studies and
reviews shall be performed at Purchaser's sole cost and expense and which shall
not materially interfere with the operation of the Operating Residences by
Seller. In addition, Purchaser shall have the right to inspect all other matters
required to be delivered by Seller to Purchaser hereunder. In consideration of
Purchaser's right to inspect the Operating Residences as described in this
Section 12.A, Purchaser shall, and does hereby agree to, indemnify, defend and
hold Seller and Seller's employees, agents and residents harmless from any
losses, costs or expenses arising out of the exercise of such privileges by
Purchaser (including any rights or claims of materialmen or mechanics to liens
on the Operating Residences, but excepting acts resulting from the negligence or
willful conduct of Seller or Seller's agents, principals, employees,
representatives, affiliates or others whose presence is suffered or permitted by
Seller), which indemnity, defense and hold harmless agreement shall survive any
termination of this Agreement. Purchaser shall repair any damage to the
Operating Residences resulting from Purchaser's inspection of the Operating
Residences and shall maintain (or cause its contractors to maintain) adequate
liability insurance and shall provide evidence of same to Seller.
B. Termination Election. In the event that any of Purchaser's
inspections, examinations, tests or surveys of any Operating Residence reveal
any condition or fact (or raises substantial uncertainty with respect to the
existence of any such condition or fact) with respect to (i) compliance of the
Operating Residence with all Land Use Requirements materially necessary for the
current and future operation of the Operating Residences or which will
substantially impede future financing of any Operating Residence or (ii) a
Recognized Environmental Condition (as hereinafter defined), hereof, then
provided that Purchaser shall give notice thereof (together with a copy of any
report or reports related thereto) within forty-five (45) days after the date of
this Agreement (the "Review Period"), Purchaser may, in its sole and absolute
discretion, have the right to elect to terminate this Agreement with respect to
such Operating Residence, whereupon the provisions of Section 14 hereof shall be
applicable with respect to such Operating Residence. Failure of Purchaser to
give notice of a termination election pursuant to this Section 12.B. prior to
the expiration of the Review Period shall constitute a waiver of Purchaser's
right to terminate this Agreement pursuant to this Section 12.B. unless
Purchaser has conducted customary inspections and examinations during such
Review Period which did not reveal such
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condition or fact, and Purchaser first becomes aware of any such condition or
fact after expiration of such Review Period. As used herein, a "Recognized
Environmental Condition" is defined as the presence or likely presence of any
Hazardous Substances on, in, under or adjacent to an Operating Residence under
conditions that indicate an existing release, a past release or a material
threat of a release of any Hazardous Substance on the Operating Property or
into the ground, groundwater or surface water of the Operating Property or
properties adjacent thereto. The term includes Hazardous Substances even under
conditions in compliance with Environmental Laws. The term is not intended to
include de minimus conditions that do not present a material risk of harm to
public health or the environment and that generally would not be the subject of
an enforcement action if brought to the attention of appropriate governmental
agencies.
C. Right to Update Information, including Representations and
Warranties. Seller shall have the right at any time during the term of this
Agreement to update any information previously provided by Seller to Purchaser,
including without limitation the Schedules to this Agreement and any information
necessary to qualify any representation or warranty set forth in Section 9
(through the addition of new Schedules) which Seller determines is incorrect
other than as a result of Seller's breach of its obligations hereunder (in which
event Section 18.B shall apply). If Seller provides Purchaser with an updated
Schedule or other updated information at any time on or before the applicable
Residence Closing and such update is not a result of Seller's breach hereunder,
then Purchaser shall have ten (10) days in which to elect to terminate this
Agreement with respect to the applicable Operating Residence by delivering
notice to Seller within ten (10) days after receipt by Purchaser of such update,
whereupon the provisions of Section 14 shall be operative with respect to such
Operating Residence; provided, however, that Schedules originally delivered
pursuant to Section 21 hereof shall not be deemed "updated schedules" pursuant
to this sentence. Failure of Purchaser to elect to terminate this Agreement with
respect to an Operating Residence by timely notice to Seller shall be deemed a
waiver of Purchaser's right to elect to terminate as a result of such update but
shall not limit or impair Purchaser's right to thereafter elect to terminate in
the event of any subsequent update. The applicable Residence Closing Date shall
be extended, if necessary, to permit ten (10) days for Purchaser to make
Purchaser's election as set forth above.
13. CONDITIONS TO EACH RESIDENCE CLOSING.
A. Conditions to Each Parties' Obligation to Close. The respective
obligations of each party hereto to affect any Residence Closing shall be
subject to the fulfillment at or prior to the applicable Residence Closing Date
of the following conditions, any or all of which may be waived, in whole or in
part, to the extent permitted by applicable law:
(i) HSR Act. The applicable waiting period under the HSR Act
shall have expired or been terminated without action by the Justice
Department or the Federal Trade Commission to prevent consummation of
any of the transactions contemplated hereby and without the impositions
of any conditions.
(ii) Licensing Arrangement. Prior to or simultaneously with
the first Residence Closing, HCR Manor Care, Purchaser and their
respective affiliates intended
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to be parties thereto shall have entered into definitive license
agreements with respect the licensing arrangement contemplated by that
certain Letter of Intent related thereto dated as of the date of this
Agreement by and between HCR Manor Care and Purchaser.
B. Conditions to Purchaser's Obligation to Close. The obligation of
Purchaser to purchase each Operating Residence hereunder is subject to the
following additional conditions, any or all of which may be waived by Purchaser
to the extent permitted by applicable law:
(i) Accuracy of Representations (and the facts recited
therein); No Default by Seller. All the warranties, representations and
covenants of Seller contained in this Agreement with respect to such
Operating Residence or the Seller entities owning such Operating
Residence (as qualified by any Schedules delivered pursuant to Sections
12.C or 21) shall be true in all respects on the applicable Residence
Closing Date with the same effect as if they had been made on such
Residence Closing Date and shall be reaffirmed by Seller in writing at
the Residence Closing, and Seller shall have performed all covenants
and obligations to have been performed and satisfied by Seller with
respect to such Operating Residence prior to the Residence Closing
Date; provided, however, that with respect to any breach of a
representation, warranty or covenant by Seller with respect an
Operating Residence or the Seller entities which own such Operating
Residence which do not (i) interfere with or impair such Seller
entities' right and ability to fully perform its obligations hereunder
with respect to such Operating Residence or (ii) materially and
adversely affect the fair market value of such Operating Residence (any
such breach referred to herein as a "Minor Breach"), Purchaser's sole
remedy shall be an action for damages pursuant to Section 18 hereof and
the existence of any such Minor Breach shall not excuse Purchaser's
obligation to purchase such Operating Residence hereunder.
(ii) Licensing. Purchaser, after the exercise of reasonable
and diligent efforts, shall have received all necessary permits,
licenses, approvals, accreditations and certificates from all
applicable federal, state and local governmental authorities or
agencies or others having jurisdiction in order to (a) permit Purchaser
to operate the Operating Residence for the licensing category and
number of units and residents described on Schedule I and (b) permit
the transfer of the Operating Residence from Seller to Purchaser,
except for such permits, licenses, approvals, accreditations or
certificates which, if not received by Purchaser, would not materially
and adversely affect Purchaser's ability to operate the Operating
Residence. Notwithstanding the foregoing, the condition set forth in
this Section 13.B(ii) shall be deemed satisfied with respect to an
Operating Residence if, with respect to such Operating Residence,
Purchaser is entitled to receive the economic benefits of ownership by
entering into a lease or management agreement with Seller whereby
Seller remains the licensee (under applicable law) provided that Seller
enters into such an arrangement with Purchaser and all necessary
regulatory approvals or waivers are obtained with respect thereto.
(iii) Termination Election. Purchaser shall not have given
notice to Seller of it election to terminate this Agreement with
respect to such Operating Residence pursuant
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to Sections 5.A, 12.B, 12.C, 16.A, 16.B, Seller shall not have given
notice to Purchaser pursuant to Section 14.C and neither party shall
have given notice of termination pursuant to Sections 18, 20, 21, 22
or 23 hereof.
14. SELLER'S OPTIONS UPON FAILURE OF PURCHASER CLOSING CONDITION.
In the event that any condition to Purchaser's obligation to purchase
any Operating Residence hereunder shall not have been satisfied or waived by
Purchaser as of the applicable Residence Closing Date (such condition, a "Failed
Condition"), Seller may, by written notice given to Purchaser prior to or within
three (3) business days following the date that such Residence Closing would
have occurred, elect one of the following alternatives:
A. Deferral of Residence Closing Date. Seller may defer the Residence
Closing Date with respect to such Operating Residence for a period of up to 30
days after the original Residence Closing Date in order to seek to satisfy any
such Failed Condition.
B. Indemnification and Cure. Seller may agree to indemnify Purchaser
with respect to all liability or exposure arising as a result of such Failed
Condition pursuant to an indemnification agreement in form and substance
satisfactory to Purchaser, such approval not to be unreasonably withheld,
whereupon Purchaser shall be obligated to proceed with the purchase of such
Operating Residence provided that pursuant to such indemnification agreement
Seller agrees to repurchase the Operating Residence from Purchaser for a
purchase price equal to the purchase price paid by Purchaser to Seller
hereunder, together with interest thereon at the per annum rate of 9% from the
date of such Residence Closing to the date of such repurchase, in the event that
the Failed Condition shall not have been cured or satisfied by Seller within 90
days of the original Residence Closing Date.
C. Withdrawal of Residence. With respect to no more than three (3) of
the Operating Residences in the aggregate, Seller may elect to withdraw and
remove such Operating Residence from the terms of this Agreement whereupon
Purchaser shall have no further obligation hereunder to purchase such Operating
Residence.
D. Withdrawal and Substitution. Seller shall be entitled to withdraw
such Operating Residences from the terms of this Agreement provided that Seller
offers to Purchaser in replacement thereof one (1) or more assisted living or
dementia care residences owned by Seller having a comparable economic value. If
Purchaser is willing to agree to such substitution and Purchaser and Seller
agree upon an appropriate purchase price for such substituted residences, the
parties shall execute an amendment to this Agreement adding such substituted
residence as an Operating Residence at the agreed upon price.
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15. NOTICES.
All notices, consents, approvals and other communications which may be
or are required to be given by either Seller or Purchaser under this Agreement
shall be properly given if made in writing and sent by (a) hand delivery, or (b)
certified mail, return receipt requested, or (c) nationally recognized overnight
delivery service for next business day delivery (such as Express Mail, Federal
Express or Airborne Express), or (d) facsimile or telecopier, provided a
confirming copy thereof is thereafter also sent via the methods described in
(a)-(c), above, with all postage and delivery charges paid by the sender and
addressed to Purchaser or Seller, as applicable, as follows. Such notices
delivered (a) by hand shall be deemed received upon actual delivery, (b) by
overnight delivery service shall be deemed received on the business day
following the date of deposit with such overnight service, (c) by mail shall be
deemed received upon the earlier of actual receipt or two (2) business days
after mailing, and (d) by facsimile or telecopier shall be deemed received upon
the date the sender receives verbal or electronic confirmation of such
transmission, without regard to when the confirming copy is sent or delivered.
Said notice addresses are as follows:
IF TO SELLER:
HCR Manor Care, Inc.
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇▇ ▇ ▇▇., ▇.▇.
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
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IF TO PURCHASER:
Alternative Living Services, Inc.
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
2700 International Tower
Peachtree Center
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇, Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Either party may change its address for notices hereunder upon not less than
five (5) days notice to the other, and either party's counsel may give notice on
behalf of their respective clients. Inability to give notices due to incorrect
address or due to failure of a party to give notice of a change of address,
refusal to accept notices, and inability to transmit notices due to mechanical
or other difficulties on the recipient's end (including without limitation a
malfunctioning facsimile machine) shall be deemed to be effective notice
hereunder.
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16. CASUALTY AND CONDEMNATION.
A. Casualty. In the event that prior to the applicable Residence
Closing Date any of the Improvements of the applicable Operating Residence are
damaged or destroyed by fire or other casualty to any extent (other than such
minor damage as may be fully repaired by Seller prior to the Residence Closing
Date), then Seller shall give Purchaser immediate notice thereof and Purchaser
shall have the right to elect not to purchase such Operating Residence so
damaged or destroyed (a "Section 16.A. Election") by written notice to Seller
within ten (10) days after Purchaser receives notice of such fire or other
casualty, and thereafter neither party hereto shall have any further rights,
obligations or liabilities hereunder with respect to such Operating Residence
except to the extent that any right, obligation or liability set forth herein
expressly survives termination of this Agreement. In the event that Purchaser
does not make a Section 16.A. Election with respect to an Operating Residence,
Purchaser shall be obligated to close the purchase and sale contemplated by this
Agreement as scheduled without adjustment of the applicable Residence Purchase
Price and Seller shall assign to Purchaser at such Residence Closing all
insurance proceeds payable under Seller's insurance policies on account of such
damage or destruction or pay to Purchaser all such insurance proceeds previously
paid, and pay to Purchaser at such Residence Closing an amount equal to the
amount which the insurer is entitled pursuant to the terms of the applicable
insurance policy to deduct from the proceeds otherwise payable to Seller on
account of such casualty loss, and Seller shall not be obligated to repair or
restore the Property. The applicable Residence Closing Date shall be extended,
if necessary, to permit ten (10) days for Purchaser to make Purchaser's election
as set forth above.
B. Condemnation. In the event that prior to any Residence Closing Date
there shall be instituted against any portion of the applicable Operating
Residence any proceeding in condemnation, eminent domain or any written request
for a conveyance in lieu thereof, or limiting or restricting access thereto or
should Seller receive notice that such proceedings are threatened or have been
commenced against such Operating Residence (hereinafter collectively referred to
as "Condemnation Proceedings"), then Seller shall give Purchaser immediate
notice thereof and Purchaser shall have the right to elect not to purchase such
Operating Residence (a "Section 16.B. Election") by written notice to Seller
within ten (10) days after Purchaser receives notice of such Condemnation
Proceedings, and thereafter neither party hereto shall have any further rights,
obligations or liabilities hereunder with respect to such Operating Residence
except to the extent that any right, obligation or liability set forth herein
expressly survives termination of this Agreement. In the event that Purchaser
shall not make a Section 16.B. Election with respect to an Operating Residence,
Purchaser shall be obligated to close the purchase and sale contemplated hereby
less the portion of such Operating Residence so taken or subject to said
Condemnation Proceedings without adjustment of the applicable Residence Purchase
Price and Seller shall assign or pay to Purchaser at the applicable Residence
Closing all of Seller's right, title and interest in any award payable on
account of such Condemnation Proceedings or pay to Purchaser all such awards
previously paid and Seller shall have no obligation to repair or restore such
Operating Residence not so taken by said Condemnation Proceedings. The Closing
Date shall be extended, if necessary, to permit ten (10) days for Purchaser to
make Purchaser's election as set forth above.
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17. BROKERS.
Except with respect to any fees payable by Seller to ▇▇▇▇▇▇▇ ▇▇▇▇▇ or
any fees payable by Purchaser to Schroeders, each party hereto represents and
warrants to the other that it has not employed any broker, finder or other
person or entity who might, by reason thereof, have any claim for payment of any
brokerage commission, finder's fee or other similar compensation from any other
party hereto. Seller and Purchaser further represent and warrant that they each
shall be responsible for payment of any broker or finder employed (expressly or
impliedly) by them, respectively. Seller and Purchaser shall and do hereby
indemnify and defend the other against and hold the other harmless of and from
all claims, demands and liabilities for any breach of the foregoing
representations and warranties, including without limitation, for any
commission, fee or other compensation payable to or claimed by any broker or
finder employed (express or implied) by it or with whom it made an agreement
(express or implied) to pay a broker's commission, a finder's fee or other
compensation.
18. DEFAULT.
A. In the event that Purchaser defaults in the observance or
performance of its covenants and obligations hereunder after written notice by
Seller to Purchaser of such default and Purchaser's failure to cure such default
within ten (10) days after receipt of such notice, Seller shall be entitled to
terminate this Agreement by written notice to Purchaser of such termination and
shall also be entitled, as its sole and exclusive remedy hereunder, to payment
by Purchaser to Seller of the Applicable Liquidated Damage Amount as defined and
set forth on Schedule 18 hereof as full liquidated damages for such default of
Purchaser. The parties hereby acknowledge the difficulty of ascertaining the
actual damages in the event of such a default, that it is impossible more
precisely to estimate the damages to be suffered by Seller upon Purchaser's
default and that the aforesaid payments are intended not as a penalty, but as
full liquidated damages and that such amounts constitutes a good faith estimate
of the potential damages arising therefrom. Seller's right to so terminate this
Agreement and to retain the aforesaid payment as full liquidated damages is
Seller's sole and exclusive remedy in the event of default hereunder by
Purchaser, and Seller hereby waives, relinquishes, releases and covenants not to
pursue any and all other rights and remedies, including, but not limited to (i)
any right to ▇▇▇ Purchaser for specific performance of this Agreement, (ii) any
right to ▇▇▇ Purchaser for damages or to prove that Seller's actual damages
exceed the amounts agreed upon herein as full liquidated damages, and (iii) any
other right or remedy which Seller may otherwise have against Purchaser, either
hereunder, at law, in equity or otherwise.
B. In the event that Seller defaults in the observance or performance
of its covenants and obligations hereunder after written notice by Purchaser to
Seller of such default and Seller's failure to cure such default within thirty
(30) days after receipt of such notice, Purchaser shall be entitled: (i) in the
case of any default other than a Minor Breach, to pursue any or all rights or
remedies as may be provided hereunder and at law, in equity or otherwise,
including, without limitation, the right to terminate this Agreement as to any
Operating Residence which is affected by such default (subject to the provisions
of Section 14 hereof) or (ii) in the case of any Minor
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Breach, to pursue an action for damages resulting from such Minor Breach,
including without limitation an action to recover all costs and expenses
incurred by Purchaser in pursuing such damages, including attorneys' fees and
expenses. Notwithstanding the foregoing in no event shall Purchaser be entitled
to bring an action for any Minor Breach or Minor Breaches except to the extent
that the aggregate amount that Purchaser but for this sentence would be
entitled to recover on account of such Minor Breach and any Minor Breaches
under that Construction Purchase Agreement exceeds $4,000,000.00 and in no
event shall Seller's aggregate liability for Minor Breaches under this
Agreement and the Construction Purchase Agreement exceed $25,000,000.00.
19. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION.
A. Survival of Representations and Warranties. All representations and
warranties contained in this Agreement and in any certificate delivered at any
Residence Closing shall be deemed to have been relied upon notwithstanding any
investigation heretofore or hereafter made or omitted by any party hereto and
shall survive each Residence Closing for a period of two (2) years after the
date of the final Residence Closing hereunder.
B. Seller's Indemnification Obligations. Subject to the terms and
conditions of this Section 19, Seller agrees to indemnify and hold Purchaser
harmless against any and all losses, costs and expenses (including, without
limitation, legal and other expenses) resulting from or relating to:
(i) any debt, liability or obligation of Seller other than any
liabilities of Seller expressly assumed by Purchaser in accordance
herewith, and any claim or demand of any third party with respect to
any act or occurrence at, or the operation of, any Operating Residence
prior to such Operating Residence's Residence Closing Date (provided,
that the foregoing shall not be deemed to make Seller liable for any
physical condition of an Operating Residence as of a Residence Closing
Date); and
(ii) any failure of Seller to comply with the Bulk Sales Law
of the states in which any of the Operating Residences are located;
any and all actions, suits, demands, assessments or judgments with respect to
any claim arising out of or relating to the subject matter of the
indemnification. Notwithstanding the foregoing, nothing in this Section 19B
shall be deemed to require Seller to indemnify Purchaser for any claim, demand,
action, suit, assessment or judgment against Purchaser solely for contribution
(or other similar action) because Purchaser appears in the chain of title.
C. Purchaser's Indemnification Obligations. Subject to the terms and
conditions of this Section 19, Purchaser agrees to indemnify and hold Seller
harmless against any and all losses, costs and expenses (including, without
limitation, legal and other expenses), resulting from or relating to:
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(i) any claim or demand of any third party with respect to any
act or occurrence at, or the operation of any Operating Residence on or
after such Operating Residence's Residence Closing Date.
any and all actions, suits, demands, assessments or judgments with respect to
any claim arising out of or relating to the subject matter of the
indemnification. Notwithstanding the foregoing, nothing in this Section 19C
shall be deemed to require Purchaser to indemnify or hold Seller harmless with
respect to any claim, demand, action, suit, assessment or judgment against
Seller solely for contribution (or other similar action) because Seller appears
in the chain of title.
D. Procedure for Indemnification Claims. The respective indemnification
obligations of Seller and Purchaser pursuant to Section 19 shall be conditioned
upon compliance by Seller and Purchaser with the following procedures for
indemnification claims based upon or arising out of any claim, action or
proceeding by any person not a party to this Agreement.
(i) If at any time a claim shall be made or threatened, or an
action or proceeding shall be commenced or threatened, against a party
hereto (the "Aggrieved Party") which could result in liability of the
other party (the "Indemnifying Party") under its indemnification
obligations hereunder, the Aggrieved Party shall give to the
Indemnifying Party prompt notice of such claim, action or proceeding.
Such notice shall state the basis for the claim, action or proceeding
and the amount thereof (to the extent such amount is determinable at
the time when such notice is given) and shall permit the Indemnifying
Party to assume the defense of any such claim, action or proceeding
(including any action or proceeding resulting from any such claim).
Failure by the Indemnifying Party to notify the Aggrieved Party of its
election to defend any such claim, action or proceeding within a
reasonable time, but in no event more than fifteen days after notice
thereof shall have been given to the Indemnifying Party, shall be
deemed a waiver by the Indemnifying Party of its right to defend such
claim, action or proceeding; provided, however, that the Indemnifying
Party shall not be deemed to have waived its right to contest and
defend against any claim of the Aggrieved Party for indemnification
hereunder based upon or arising out of such claim, action or
proceeding.
(ii) If the Indemnifying Party assumes the defense of any such
claim, action or proceeding, the obligation of the Indemnifying Party
as to such claim, action or proceeding shall be limited to taking all
steps necessary in the defense or settlement thereof and, provided the
Indemnifying Party is held to be liable for indemnification hereunder,
to holding the Aggrieved Party harmless from and against any and all
losses, damages and liabilities caused by or arising out of any
settlement approved by the Indemnifying Party or any judgment or award
rendered in connection with such claim, action or proceeding. The
Aggrieved Party may participate, at its expense, in the defense of such
claim, action or proceeding provided that the Indemnifying Party shall
direct and control the defense of such claim, action or proceeding. The
Aggrieved Party agrees to cooperate and make available to the
Indemnified Party all books and records and such officers, employees
and agents as are reasonably necessary and useful in connection with
the defense. The Indemnifying Party shall not, in the defense of such
claim, action or
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proceeding, consent to the entry of any judgment or award, or enter
into any settlement which does not include as an unconditional term
thereof the giving by the claimant or the plaintiff to the Aggrieved
Party of a release from all liability in respect of such claim, action
or proceeding, except in either event with the prior consent of the
Aggrieved Party.
(iii) If the Indemnifying Party does not assume the defense of
any such claim, action or proceeding, the Aggrieved Party may defend
against such claim, action or proceeding in such manner as it may deem
appropriate. The Indemnifying Party agrees to cooperate and make
available to the Aggrieved Party all books and records and such
officers, employees and agents as are reasonably necessary and useful
in connection with the defense.
(iv) In the event an Aggrieved Party or Indemnifying Party
shall cooperate in the defense or make available books, records,
officers, employees or agents, as required by the terms of
subparagraphs (ii) and (iii), respectively, of this Section 19.D., the
party to which such cooperation is provided shall pay the out-of-pocket
costs and expenses including legal fees and disbursements) of the party
providing such cooperation and of its officers, employees and agents
reasonably incurred in connection with providing such cooperation, but
shall not be responsible to reimburse the party providing such
cooperation for such party's time or the salaries or costs of fringe
benefits or other similar expenses paid by the party providing such
cooperation to its officers and employees in connection therewith.
20. CAMPUS PROPERTIES.
Purchaser and Seller acknowledge and agree that with respect to the
campus properties (each, a "Campus Property") constituting one of the Operating
Residences identified on Schedule 20, the parties may determine prior to the
applicable Residency Closing Date that is not possible to legally subdivide such
Campus Properties from the adjacent facility or facilities. With respect to any
Campus Property that Purchaser and Seller determine cannot be so legally
subdivided, Purchaser and Seller agree that they shall negotiate in good faith
for Seller to convey such Campus Property together with the adjacent facility or
facilities to Purchaser at no increase in the Residence Purchase Price
applicable thereto and thereafter Purchaser and Seller shall enter into a long
term ground lease by Seller of the adjacent facility or facilities, which long
term ground lease shall be for an initial term of ninety-nine (99) years and
which shall be renewable at the option of Seller for an additional ninety-nine
(99) year term. Pursuant to such ground lease, the tenant thereunder shall have
all obligations for maintenance, repair and operation of such adjacent
facilities and the rent for such adjacent facilities shall be payable in a
single installment upon the commencement date in an amount equal to $1.00, with
rental for the renewal period to be equal to $1.00. Such lease shall be fully
assignable, transferable and subleaseable by the tenant thereunder who shall
also be entitled to mortgage or pledge such lease or its leasehold estate in
connection with any financing. The ground lease shall contain such provisions as
the parties shall negotiate in good faith to address issues involving
subordination/priority of financing transactions, nondisturbance rights and
other similar issues to afford Seller protection with respect to its leasehold
estate in the event of Purchaser's financing and to afford Purchaser
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protection with respect to the impact on the financability of the Campus
Property as a result of the ground lease. Such ground lease shall contain such
other customary provisions as the parties so agree including appropriate
easements, cost sharing agreements and other similar matters. Notwithstanding
the foregoing, neither party shall have any obligation to engage in the
above-described transaction if such party determines in its discretion that
doing so may cause material problems for it for accounting, tax, licensure,
financing or other reasons such as future marketability, in which event such
Campus Property shall be treated under Section 14.
21. POST-EXECUTION DELIVERY OF SCHEDULES.
Purchaser and Seller acknowledge that in the interest of expediting
execution of this Agreement, Seller had inadequate time to prepare and Purchaser
had inadequate time to review all of the necessary schedules to accompany this
Agreement. Accordingly, Seller hereby agrees that Seller shall, on or before the
date thirty (30) days after the date of this Agreement deliver to Purchaser
Schedules identified on page (y) hereof as well as any additional schedules
which Seller believes are necessary to make Seller's representations and
warranties, as qualified thereby, true and accurate in all respects (the
"Post-Execution Schedules"). Upon receipt of all of the Post-Execution
Schedules, Purchaser shall have a period of thirty (30) days to review such
Post-Execution Schedules, to request such additional information or
clarification as Purchaser shall reasonably deem necessary and to object by
notice to Seller to any matters shown thereon which in Purchaser's reasonable
judgment are material matters that Purchaser would have required Seller address
or correct prior to the execution hereof had adequate time been available
("Objectionable Schedule Items"). Within ten (10) days after Seller's receipt of
Purchaser's notice with respect to any Objectionable Schedule Items, Seller
shall give notice to Purchaser either (i) refusing to cure the applicable
Objectionable Schedule Items or (ii) setting forth Seller's intent to cure such
Objectionable Schedule Items and stating in detail how Seller will accomplish
same. Failure of Seller to timely give such notice shall be deemed to be a
refusal by Seller to cure any such Objectionable Schedule Items. Upon the latter
of receipt of Seller's notice or expiration of the ten (10) day period, then
Purchaser may, at any time prior to ten (10) days after the receipt by Purchaser
of Seller's response or expiration of Seller's response time, by notice to
Seller, (x) elect to terminate Purchaser's obligation to purchase any Operating
Residence effected by such Objectionable Schedule Item pursuant to this
Agreement, whereupon the provisions of Section 14 shall be applicable with
respect to such Operating Residence or (y) accept such Operating Residences
subject to such Objectionable Schedule Items that Seller has not undertaken to
cure, in which event such Objectionable Schedule Items, together with all other
items appearing on the schedules to which Purchaser did not object, will be
deemed Acceptable Schedule Items hereunder. If Purchaser elects option (ii) as
to any Objectionable Schedules Items and at the applicable Residence Closing
Seller fails to cure the Objectionable Schedule Items in the manner Seller has
undertaken to so cure in its notice to Purchaser to the satisfaction of
Purchaser, Purchaser will again have the option set forth in (x) and (y) above.
In the event that Purchaser fails to timely notify Seller of Objectional
Schedule Items, then such failure to notify Seller shall constitute a waiver of
Purchaser's right to object to such Objectionable Schedule Items but shall not
be a waiver of Seller's other obligations hereunder nor a waiver of Purchaser's
right to object to matters that arise subsequent to such date.
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22. SHARED FACILITIES.
Purchaser and Seller acknowledge that two (2) of the Operating
Residences consist of buildings containing both beds for assisted
living/dementia care Residents and beds for skilled nursing home patients, such
Operating Residences being more particularly identified on Schedule 22 (the
"Shared Facilities"). Purchaser and Seller further acknowledge that Purchaser
and Seller intend to negotiate in good faith with respect to how such Shared
Facilities can be conveyed, leased or managed in a transaction to enable
Purchaser to obtain the economic benefits of the assisted living/dementia care
beds and to enable Seller to obtain the economic benefits of the skilled nursing
beds, after taking into consideration all possible implications of such
transaction, including without limitation tax consequences, accounting
treatment, licensure implications, impact on financing sources or cost or
availability, future marketability, shared services agreements (including
without limitation costs and liability issues) and all other aspects of such
transaction. In the event Purchaser and Seller are unable to agree upon a
structure for the transaction that satisfies the economic benefits requirements
set forth above and is otherwise satisfactory to both parties with respect to
the other implications noted above, then and in such event either party may upon
notice to the other terminate this Agreement with respect to the Shared
Facilities (or either of them), whereupon neither party shall be obligated to
close with respect to such Shared Facility or Facilities and such Shared
Facility or Facilities shall be treated under Section 14. Seller agrees that
Seller shall reasonably consider guaranteeing indebtedness or provide financing
upon such terms as Seller shall find acceptable and that helps to accomplish the
consummation of the transaction.
23. TERMINATION.
In the event that as of May 31, 1999, there is any Operating Residence
as to which Seller and Purchaser shall not have consummated a Residence Closing,
either Purchaser or Seller may thereafter terminate this Agreement with respect
to such Operating Residence by delivery of written notice of termination to the
other party. No such termination shall affect either party's liability for any
breach of this Agreement occurring prior to such termination.
24. GENERAL PROVISIONS.
A. Agreement Binding; Assignment. This Agreement shall be binding upon
each party hereto and such party's successors and assigns and shall inure to the
benefit of each party hereto and such party's successors and assigns. As used
herein, all references to "Seller" shall mean individually each entity
constituting a Seller hereunder and collectively all such entities, all of which
shall be jointly and severally liable for the performance of all obligations of
Seller hereunder. Any reference herein to any "Seller entity" (or words of
similar import) are not intended to be in limitation of the foregoing definition
but are included for clarity purposes only. In addition, the term is to in all
instances to be broadly construed to include other affiliates of Seller
(including without limitation subsidiaries, affiliates, employees and others)
with respect to the making of any representations or warranties or the
performance of Seller's covenants or the breadth of Seller's knowledge, it being
the intent of the parties that the term in such contexts is to
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be broadly construed even though such broad definition would not by its terms
apply to the joint and several aspects of this Agreement. Seller hereby
expressly affirms its obligations to cause all such affiliates to so comply,
Seller hereby expressly acknowledging that only Seller is in a position to best
determine which of Seller's affiliates should be the party making such
representation or warranty, performing such covenant or gathering such
knowledge and the parties intend Purchaser should not be disadvantaged thereby.
As used in this Agreement, Seller's "knowledge" shall mean the knowledge of all
Employees of Seller who are responsible for the matter at issue. Purchaser may
assign this Agreement and Purchaser's rights hereunder without the prior
written consent of Seller to any affiliate of Purchaser or to a real estate
investment trust or an affiliated lender to effect a sale/leaseback or other
financing transaction, provided that no such assignment shall affect
Purchaser's obligations hereunder. Purchaser may not otherwise assign its
rights hereunder without Seller's prior written consent.
B. Entire Agreement. This Agreement, the Addendum and all the Schedules
referenced herein and annexed hereto contain the entire agreement of the parties
hereto with respect to the matters contained herein, and no prior agreement or
understanding pertaining to any of the matters connected with this transaction
shall be effective for any purpose. Except as may be otherwise provided herein,
the agreements embodied herein may not be amended except by an agreement in
writing signed by the parties hereto.
C. Execution Necessary. This Agreement shall not be binding upon Seller
or Purchaser until fully executed and delivered by representatives of Seller or
Purchaser, as the case may be, and no action taken by Seller's or Purchaser's
representatives shall be deemed an acceptance of this Agreement until this
Agreement has been so executed by Seller or Purchaser, as the case may be, and
delivered to the other party hereto.
D. Time is of the Essence. Time is of the essence of the transaction
contemplated by this Agreement.
E. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
F. Interpretation; Date of Agreement. The titles, captions and Section
headings are inserted for convenience only and are in no way intended to
interpret, define, limit or expand the scope or content of this Agreement or any
provision hereof. If any party to this Agreement is made up of more than one
person or entity, then all such persons and entities shall be jointly and
severally liable hereunder, even though the defined term for such party is used
in the singular in this Agreement and in each instance in which a defined term
for such party is used in the singular it shall mean, collectively, all persons
and entities, jointly and severally, and each person or entity constituting a
portion thereof, severably. If any time period under this Agreement ends on a
day other than a Business Day (as hereinafter defined), then the time period
shall be extended until the next business day. The term "Business Day" shall
mean Monday through Friday excluding holidays recognized by the state government
of the States of Ohio and Wisconsin. All references in this Agreement to "the
date of this Agreement" shall be deemed to refer to the date set forth in the
first Section hereof, which date evidences the effective date of the agreement
of
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the parties as to the terms and conditions set forth herein, regardless of
the date when this Agreement was actually executed by both parties.
G. Waiver. Purchaser or Seller, as the case may be, reserves the right
to waive, in whole or in part, any provision hereof which is for the benefit of
the party so waiving, including without limitation any condition precedent under
Section 12 hereof.
H. Facsimile Signature; Counterparts. This Agreement may be executed by
facsimile signature and in separate counterparts, each of which shall be deemed
an original and all of which, taken as a whole, shall be deemed to be one (1)
original. This Agreement shall be deemed fully executed when each party whose
signature is required has signed at least one (1) counterpart even though no one
(1) counterpart contains the signatures of all of the parties to this Agreement.
I. Non-Waiver. Unless otherwise expressly provided herein, no waiver by
Seller or Purchaser of any provision hereof shall be deemed to have been made
unless expressed in writing and signed by such party. No delay or omission in
the exercise of any right or remedy accruing to Seller or Purchaser upon any
breach under this Agreement shall impair such right or remedy or be construed as
a waiver of any such breach theretofore or thereafter occurring. The waiver by
Seller or Purchaser of any breach of any term, covenant or condition herein
stated shall not be deemed to be a waiver of any other breach, or of a
subsequent breach of the same or any other term, covenant or condition herein
contained.
J. Rights Cumulative. Subject to the limitations set forth in Section
18 and 19 hereof, all rights, powers, options or remedies afforded to Seller or
Purchaser either hereunder or by law shall be cumulative and not alternative,
and the exercise of one right, power, option or remedy shall not bar other
rights, powers, options or remedies allowed herein or by law, unless expressly
provided to the contrary herein.
K. Schedules. The exhibits referred to in and attached to this
Agreement are incorporated herein in full by reference.
L. Attorneys' Fees. If there is any legal action, arbitration or
proceeding between Seller and Purchaser arising from or based on this Agreement
or the interpretation or enforcement of any provisions hereof, then the
unsuccessful party to such action, arbitration or proceeding shall pay to the
prevailing party all costs and expenses, including reasonable attorneys' fees,
incurred by such prevailing party in such action, arbitration or proceeding and
in any appeal in connection therewith. If such prevailing party recovers a
judgment in any such action, arbitration, proceeding or appeal, then such costs,
expenses and attorneys' fees shall be included in and as a part of such
judgment.
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IN WITNESS WHEREOF, the undersigned have caused their duly authorized
representatives to execute and deliver this Agreement as of the day and year
first above written.
SELLER:
HCR MANOR CARE, INC., a Delaware corporation
By: /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
Name: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
Its: Vice President and General Counsel
---------------------------------------------
MANOR CARE, INC., a Delaware corporation
By: /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
Name: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
Its: Vice President and General Counsel
---------------------------------------------
MANORCARE HEALTH SERVICES, INC.,
a Delaware corporation
By: /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
Name: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
Its: Vice President and General Counsel
---------------------------------------------
MANOR CARE OF DUNEDIN, INC.,
a Florida corporation
By: /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
Name: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
Its: Vice President and General Counsel
---------------------------------------------
MANOR CARE OF SARASOTA, INC.,
a Florida corporation
By: /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
Name: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
Its: Vice President and General Counsel
---------------------------------------------
MANOR CARE OF BOYNTON BEACH, INC.,
a Florida corporation
By: /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
Name: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
Its: Vice President and General Counsel
---------------------------------------------
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PURCHASER:
ALTERNATIVE LIVING SERVICES, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
Its: Senior Vice President
---------------------------------------------
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SCHEDULE I - OPERATING RESIDENCES
---------------------------------------------------------------------------------------------------------------------
Facility Name and HCR Manor Type of License and Number of
Care ID # Address Type Units Licensed Beds
---------------------------------------------------------------------------------------------------------------------
Mesa, #329 ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ AC 56 Unclassified Residential Care
▇▇▇▇, ▇▇ ▇▇▇▇▇ Facility until 5/31/99, then
Directed Care - 56 beds
---------------------------------------------------------------------------------------------------------------------
Sun City West, #428 21739 North 151st Avenue AC 56 Directed Care (new category) - ▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ beds
---------------------------------------------------------------------------------------------------------------------
Peoria, #630 ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ AC 56 Directed Care - 56 beds
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
---------------------------------------------------------------------------------------------------------------------
Tucson, #497 ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ Unclassified Residential Care
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Facility until 12/31/99; then
Directed Care - 109 beds
---------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, #▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇ 56 Residential Care Facility for the
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Elderly - 56 beds
---------------------------------------------------------------------------------------------------------------------
Whittier, #480 ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ SH 75 Residential Care Facility for the
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Elderly - 146 beds
---------------------------------------------------------------------------------------------------------------------
Brea, #474 ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ Residential Care Facility for the
▇▇▇▇, ▇▇ ▇▇▇▇▇ Elderly - 196 beds
---------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, #▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ Care Facility for the
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Elderly - 186 beds
---------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇, #▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ Assisted Living Facility -
Dunedin, FL Extended Congregate Care - 120
beds
---------------------------------------------------------------------------------------------------------------------
Sarasota, #496 ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ Assisted Living Facility -
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Limited Nursing Service - 120 beds
---------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇, #▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ SH 125 Assisted Living Facility -
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Standard (applying for Limited
Nursing Service)
----------------------------- -------------------------------- ------- --------- ------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, #▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇ Assisted Living Facility, Limited
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Nursing Service - 127 beds
---------------------------------------------------------------------------------------------------------------------
▇▇▇▇ County, #330 ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ AC 56 Personal Care Home - 56 beds
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
---------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ County, #331 ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ AC 56 Personal Care Home - 56 beds
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
---------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ County, #391 ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ SH 109 Personal Care Home - 109 beds
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
---------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇, #▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ AC 60 Adult Care Home - Residential
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ Health Care - 56 beds
---------------------------------------------------------------------------------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇, #▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ Assisted Living Residence - ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ beds
---------------------------------------------------------------------------------------------------------------------
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------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇, #▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ SH 105 Assisted Living Residence - 105
▇▇▇▇▇, ▇▇ ▇▇▇▇▇ beds
------------------------------------------------------------------------------------------------------------------
Reno, #375 ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ AC 56 Residential Facility for Groups -
▇▇▇▇, ▇▇ ▇▇▇▇▇ 56 beds
------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇, #▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ SH 96 Rest Home
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
------------------------------------------------------------------------------------------------------------------
Woodridge, #502 ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇. SH 189 Rest Home
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
------------------------------------------------------------------------------------------------------------------
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SCHEDULE II - CONSTRUCTION RESIDENCES
--------------------------------------------------------------------------------------------------------------------
Facility Name and HCR Manor Type of License to be Applied For
Care ID # Address Type ▇▇▇▇▇
--------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇ ▇▇, #▇▇▇ ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ AC 60 Personal Care Boarding Home
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, #▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇. AC 60 Personal Care Boarding Home
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇, #▇▇▇ 5111 ▇▇▇▇▇▇ Ranch Parkway SH 109 AL Assisted Living Facility -
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (plus Limited Nursing Service
60 SNF)
--------------------------------------------------------------------------------------------------------------------
Decatur, #650 ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ AC 60 Personal Care Home
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------------------------
Charlotte, #▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ AC 56 Adult Care Home
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇, #368 ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ Assisted Living Residence
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------------------------
Roanoke, #653 ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ AC 56 Adult Care Residence, Assisted
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Living Facility
--------------------------------------------------------------------------------------------------------------------
Lynnwood, #447 ▇▇▇▇▇ ▇▇▇▇ ▇▇▇. AC 60 Boarding Home
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------------------------
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