Exhibit 10.66.1
PURCHASE AND SALE AGREEMENT
(Emeritus Owned Facilities)
AL INVESTORS LLC
and
EMERITUS CORPORATION
EMERITUS PROPERTIES VI, INC., and
ESC I, L.P.
Dated : December 30, 1998
PURCHASE AND SALE AGREEMENT
(Emeritus Owned Facilities)
THIS PURCHASE AND SALE AGREEMENT ("Agreement") is made and entered into as of
this day of December, 1998, by and between AL Investors LLC, a Delaware limited
liability company, and its permitted assigns ("AL Investors"), and Emeritus
Corporation, a Washington corporation, Emeritus Properties VI, Inc., a
Washington corporation, and ESC I, L.P., a Washington limited partnership
(hereinafter referred to collectively as "Sellers" or the "Emeritus Entities").
All capitalized terms not otherwise defined herein shall have the meaning set
forth in Exhibit A. AL Investors is concurrently herewith entering into a
purchase and sale agreement with Meditrust Company LLC ("Meditrust") for the
acquisition of twenty-two (22) assisted living facilities ("Meditrust
Facilities") presently being leased by Affiliates of Sellers ("Meditrust
Purchase Agreement"). AL Investors is also concurrently herewith entering into a
Supplemental Agreement In Connection With Purchase of Facilities with Emeritus
Corporation ("Emeritus") and its Affiliates Emeritus Properties I, Inc.,
Emeritus Properties VI, Inc. and ESC I, L.P. (the "Supplemental Agreement").
Sellers each own a Facility as defined in Exhibit A that is intended to be
purchased concurrently with the Closing of the Meditrust Facilities.
In consideration of the mutual covenants and agreements set forth herein, and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows.
1. SALE AND PURCHASE. Sellers agree to sell the Facilities to AL Investors on
the terms and conditions contained in this Agreement and AL Investors agrees to
purchase the Facilities from Sellers on the terms and conditions contained in
this Agreement.
2. PURCHASE PRICE.
2.1 Purchase Price. The Purchase Price for each Facility is set forth on
attached Exhibit B. The Purchase Price shall be paid by AL Investors to Sellers
at Closing in good funds subject to the adjustments herein.
2.2 Adjustment. In the event that the Senior Lender or Junior Lender will not
finance one or more of the Facilities, or if AL Investors should determine from
its due diligence that a particular Facility is not acceptable for purchase, AL
Investors may decline to purchase such Facility and the Purchase
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Price shall be reduced by the amount allocated to each such Facility as set
forth in Exhibit B.
3. DUE DILIGENCE.
3.1 Investigations. AL Investors shall have until the Closing Date (the "Due
Diligence Period") to undertake such due diligence on each Facility as it deems
necessary in its sole discretion, including but not limited to review of title
reports, the conduct of surveys, conducting of environmental assessments,
physical inspections and testings, all as more particularly set forth in Section
4.1 of the Supplemental Agreement.
3.2 Documentation. Promptly upon request therefor, or as soon as practicable, if
it has not already done so, Sellers, and each of them, shall provide to AL
Investors or its designated representatives the originals and copies of the
documentation for each Facility as set forth in Section 4.2 of the Supplemental
Agreement.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS. Emeritus, jointly and severally,
with each of the other Sellers (and each other Seller severally with respect to
the Facility owned by it), represent, warrant and covenant with respect to the
Facilities to each of AL Investors and the Facility Entities as of the date of
this Agreement as follows:
4.1 Incorporation by Reference. Each of the warranties, representations and
covenants set forth in Sections 5.1 through 5.22 of the Supplemental Agreement,
which by their terms apply to the Facilities referenced in this Agreement, are
ratified and confirmed and incorporated herein by reference.
4.2 Indemnification. Each of the Sellers, jointly and severally, hereby agrees
to defend, protect, indemnify and hold each of AL Investors and the Facility
Entities harmless from and against any and all loss, damage, liability or
expense, including attorneys' fees and costs, AL Investors or any of the
Facility Entities may suffer as a result of (y) any breach of or inaccuracy in
the foregoing representations, warranties and covenants, and (z) any claim by
any Person for personal injury or malpractice (including death) or damage to
property arising out of facts and circumstances occurring (or alleged to have
occurred) at the Facilities prior to the Closing.
4.3 General Provision. The liability of Sellers, and each of them, for breach of
any of the warranties, representations and indemnities set forth herein shall
survive Closing, shall not be diminished by, nor shall any defense to
enforcement thereof arise by reason of, any investigation conducted by AL
Investors or the Facility Entities or any remedy any of them may have against
any
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other Person, and shall be cumulative with any other remedies any of them may
have against any of the Sellers.
5. AL INVESTORS' REPRESENTATIONS. AL Investors warrants and represents to
Sellers as follows:
5.1 Existence; Power; Qualification. AL Investors is a limited liability company
duly organized, validity existing and in good standing under the laws of the
State of Delaware. Each Facility Entity is, or will be prior to Closing, duly
organized, validly existing, and in good standing in the State of Washington and
qualified to do business in the jurisdiction in which it owns or will own a
Facility.
5.2 Authority. This Agreement and all documents to be executed by AL Investors
or the Facility Entities at Closing have been duly authorized, executed, and
delivered by AL Investors and/or the Facility Entities and are binding on and
enforceable against AL Investors and the Facility Entities in accordance with
their terms.
AL Investors hereby agrees to defend, protect, indemnify, and hold Sellers
harmless from and against any and all loss, damage, liability or expense,
including attorneys' fees and costs, Sellers may suffer as a result of any
breach of or any inaccuracy in the foregoing representations and warranties.
6. RELATED AGREEMENTS.
6.1 Meditrust Purchase Agreement. AL Investors has entered into or will enter
into an agreement with Meditrust to purchase the Meditrust Facilities on the
terms and conditions contained in the Purchase and Sale Agreement ("Meditrust
Purchase Agreement"). Unless waived in writing by AL Investors, the obligations
of AL Investors under this Agreement are conditioned upon a simultaneous closing
under the Meditrust Purchase Agreement and the obligations of AL Investors under
the Meditrust Purchase Agreement are conditioned upon a simultaneous closing
under this Agreement.
6.2 Supplemental Agreement. Concurrently with and as a condition to the Closing,
Emeritus and its affiliates Emeritus Properties I, Inc., Emeritus Properties VI,
Inc., and ESC I, L.P. are entering into the Supplemental Agreement providing
various representations and warranties and other covenants in favor of AL
Investors and the Facility Entities named therein with respect to the purchase
of Meditrust Facilities and the Facilities herein.
6.3 Management A4reement with Option to Purchase. Concurrently with and as a
condition to the Closing, Emeritus shall cause Emeritus Management LLC, Emeritus
Management I LP, and other wholly owned Affiliates of Emeritus
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("Managers"), to enter into a Management Agreement with Option to Purchase with
AL Investors for itself and on behalf of each Facility Entity ("Management
Agreement") more particularly described in the Supplemental Agreement. Emeritus
shall unconditionally guarantee the obligations of each of the Managers under
the Management Agreement and agree to fund all operating deficits of the
Facilities exceeding approximately $4,500,000 in the aggregate pursuant to
Guaranty of Management Agreement and Shortfall Funding Agreement ("Guaranty
Agreement") more particularly described in the Supplemental Agreement.
6.4 Put Agreement. Concurrently with and as a condition to the Closing, Emeritus
shall cause ▇▇▇▇▇▇ ▇. ▇▇▇▇ to enter into the Put and Purchase Agreement ("Put
Agreement") more particularly described in the Supplemental Agreement.
7. OPERATIONS OF FACILITIES PENDING CLOSING. At all times prior to the Closing
or the sooner termination of this Agreement, Sellers each agree: (a) to
maintain, manage and operate its Facility in accordance with applicable law and
consistent with its past management practices; (b) to maintain its Facility in
its current condition and state of repair and to rebuild, repair or restore any
damage or destruction to the Facility by Casualty or otherwise which may occur
prior to Closing; (c) to maintain the existing property and casualty insurance
on the Facility; (d) to perform all of its material obligations under the
Permits, Permitted Exceptions, Contracts and Leases and not to amend, modify or
terminate or permit the termination of any Permit, Contract, Permitted Exception
or Lease except with respect to Contracts and Leases in the ordinary course of
business, without the prior written consent of AL Investors, which shall not
unreasonably be withheld; fe) not to enter into any Major Lease or Major
Contract for a Facility, without AL Investors' prior written consent, which
shall not unreasonably be withheld; and (f) not to mortgage, encumber or
otherwise place or permit any encumbrance on the Facility.
8. AL INVESTORS' CONDITIONS PRECEDENT TO CLOSING. The Closing and AL Investors'
obligations hereunder are expressly contingent and conditional upon the
fulfillment, compliance, satisfaction and performance of each of the following
conditions, any one or more of which may be waived or deferred in whole or in
part, but only in writing, by AL Investors.
8.1 Accuracy of Warranties; Compliance with Covenants. All representations and
warranties by Sellers contained in and made pursuant to this Agreement shall be
true and correct as of the Closing Date. In addition to the specific matters
referred to in this Section 8, Sellers shall have tendered to AL Investors all
of the agreements, instruments, documents, certificates, insurance policies and
other materials required from Sellers on or before the Closing Date pursuant to
the terms of this Agreement and Sellers shall have compiled with all of its
affirmative and negative covenants set forth herein.
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8.2 Financing The Initial Senior Loan and Initial Junior Loan shall close
simultaneously with Closing hereunder.
8.3 Final Approval. Final approval of this transaction by each of the members of
AL Investors.
8.4 Title Insurance. Title Company is ready, willing and able to issue the form
of ALTA owners' extended coverage title insurance authorized to be issued in the
jurisdiction in which the Facility is located insuring fee simple title to the
Real Estate vested in AL Investors without exception other than the Permitted
Exceptions and in the amount of the Purchase Price for that Facility.
8.5 Related Agreements. Simultaneous closing under the Supplemental Agreement
and the Meditrust Purchase Agreement.
9. SELLER'S CONDITION PRECEDENT TO CLOSING. The Closing and the Seller's
obligations hereunder and are expressly contingent and conditional upon the
fulfillment, compliance, satisfaction and performance of each of the following
conditions, any one or more of which may be waived or deferred in whole or in
part, but only in writing, by Sellers.
9.1. Accuracy of Warranties; Compliance with Covenants and Title to Real Estate.
All representations and warranties by AL Investors contained in and made
pursuant to this Agreement shall be true and correct as of the Closing Date. In
addition to the specific matters referred to in this Section 9, AL Investors
shall have complied with all of its covenants hereunder and tendered to Sellers
all of the agreements, instruments, documents, certificates and other materials
required from AL Investors on or before the Closing Date pursuant to the terms
of this Agreement.
9.2 Related Agreements. Simultaneous closing under the Supplemental Agreement
and the Meditrust Purchase Agreement.
9.3 Final Approval. Final approval of the board of Emeritus.
10. RIGHTS OF TERMINATION.
10.1 Termination of Agreement. This Agreement and the transactions contemplated
hereby may (at the option of the party having the right to do so) be terminated
at any time on or prior to the Closing Date:
(a) By Mutual Consent. By mutual written consent of AL Investors and Sellers;
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(b) Court Order. By AL Investors or Sellers if any court of competent
jurisdiction shall have issued an order pursuant to the request of a third party
restraining, enjoining or otherwise prohibiting the consummation of the
transactions contemplated by this Agreement; -
(c) Failure to Close. By AL Investors or Sellers it the transactions
contemplated hereby shall not have been consummated on or before December 31,
1998, provided, however, that such right to terminate this Agreement shall not
be available to any party whose failure to fulfill any obligation of this
Agreement has been the cause of, or resulted in, the failure of the transactions
contemplated hereby to be consummated on or before such date;
(d) Termination by Sellers. By Sellers upon notice to AL Investors if (i) a
condition to the performance of Sellers set forth in Section 9 hereof shall not
be fulfilled at the time specified for the fulfillment thereof, (ii) a material
default under or a material breach of this Agreement shall be made by AL
Investors or (iii) any representation or warranty made by AL Investors set forth
in this Agreement or in any instrument delivered by AL Investors pursuant hereto
shall be materially false or misleading;
(e) Termination by AL Investors. By AL Investors upon notice to Sellers if (i) a
condition to the performance of AL Investors set forth in Section 8 hereof shall
not be fulfilled at the time specified for the fulfillment thereof, (ii) a
material default under or a material breach of this Agreement shall be made by
Sellers it (iii) any representation or warranty made by Sellers set forth in
this Agreement or in any instrument delivered by Sellers pursuant hereto shall
be materially false or misleading.
10.2 Effect of Termination and Right to Proceed. If this Agreement is terminated
pursuant to this Section 10, then all further obligations of AL Investors and
Sellers under this Agreement shall terminate without further liability of AL
Investors or any Affiliate thereof to Sellers or Sellers to AL Investors or any
Affiliate thereof, except as specifically provided for in the Supplemental
Agreement.
11. CLOSING.
11.1 Closing Date. The Closing under this Agreement shall take place at the
offices of Title Company on the Closing Date or at such other time and place
designated by AL Investors and Sellers.
11.2 Deliveries by Seller at Closing. At the closing, Sellers shall deliver to
AL Investors the following:
(a) Special Warranty Deed to the Real Estate, free from all liens, except for
the Permitted Exceptions. The special warranty deed shall include
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covenants, whether by statute or expressly, that Sellers have fee title to the
Real Estate; has the right to convey the same and that Sellers will defend the
title to the Real Estate against all persons who may lawfully claim title by,
through or under Sellers.
(b) A ▇▇▇▇ of Sale for all Personal Property with respect to the Facilities free
and clear of all Liens, except for the Permitted Exceptions.
(c) Duly executed Management Agreement, Guaranty Agreement, and Put Agreement.
(d) Such corporate or partnership resolutions regarding due authorization and
execution and such opinions of counsel regarding authorization and execution of
the documents and instruments to be executed and delivered by any of the Sellers
hereunder as AL Investors may reasonably require.
(e) A certificate confirming that all of the warranties and representations by
Sellers set forth herein are true and correct.
(f) Certificate of Sellers stating that each of the Sellers is not a "foreign
person," as defined in Section 1445(f) of the Code and the regulations issued
thereunder, in order to comply with Section 1445(b)(2) and the regulations
issued thereunder.
(g) Assignment of the Leases, Permits and Contracts to AL Investors
("Assignment"). In connection with the Assignment, it shall be the sole
responsibility of Sellers to obtain all necessary consents and approvals for the
transfer of and vesting in the respective Facility entity for all Permits,
Contracts and Leases at Closing or within ninety (90) days thereafter.
(h) Such other documents and instruments as AL Investors may reasonably require
to vest in the respective Facility Entity all of Seller's right, title and
interest in each of the Facilities. 11.3 Deliveries of AL Investors at Closing.
At Closing, A L Investors shall deliver to Sellers the following:
(a) The Purchase Price in accordance with Section 2 hereof.
(b) A certificate confirming that all of the warranties and representations of
AL Investors are true and correct.
(c) Certificates of resolutions of the members of AL Investors authorizing the
transactions contemplated hereby and such opinions of counsel
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regarding due authorization and execution of the documents and instruments to be
executed by AL Investors as Emeritus Entities may reasonably require.
(d) Duly executed Management Agreement, Guaranty Agreement, and Put Agreement
and a memorandum thereof appropriate for recording.
11.4 Closing Costs and Expenses. All Closing Costs shall be allocated as set
forth in Section 15 of the Supplemental Agreement.
11.5 Closing Statements. All income and expense arising out of the management
and operation of each Facility, including, but not limited to real property
taxes and insurance, shall be prorated between Sellers and AL Investors as of
the Closing. Prepaid amounts or deposits under Residency Agreements or security
deposits under the Leases shall be credited to AL Investors and utility deposits
or prepaid amounts under the Contracts shall be credited to Sellers. The
prorations of income and expense for each Facility shall be made on the basis of
a written closing statement submitted by Sellers to AL Investors prior to the
Closing and approved by AL Investors. In the event any prorations or
apportionments made hereunder shall prove to be incorrect for any reason, then
any party shall be entitled to an adjustment to correct the same. Any item which
cannot be prorated because of the unavailability of information shall be
tentatively prorated on the basis of the best data then available and
re-prorated between the parties when the information is available.
Notwithstanding the foregoing, any adjustments or reprorations shall be made, if
at all, within one hundred eighty (180) days after Closing.
11.6 Delivery Outside of Escrow. Sellers shall deliver to Buyer at Closing
outside of the Closing escrow the originals of the diligence materials
referenced in Section 3.2 (except for the originals of the Contracts, Leases and
Permits to be held by Managers for use in managing the Facilities) and such
copies of all books and records of Sellers used in the operation, maintenance
arid repair of the Facilities as AL Investors may direct.
12. MISCELLANEOUS
12.1 No Broker. AL Investors represents to Sellers, and Sellers represent to AL
Investors, that no agent, finder or broker has acted for it or was the producing
and effective cause of this Agreement or the transactions contemplated herein,
and that no commissions or finder's fees are due by it to any third parties. AL
Investors agrees to indemnify and hold Sellers harmless, and Sellers agree to
indemnify and hold AL Investors harmless, with respect to any and all expenses,
obligations, and liabilities resulting from the claims or causes of action
relating to any claims made by any person retained or used by it for any agent's
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broker's or finder's fees : r commissions relating to the transactions
contemplated herein.
12.2 Entire Agreement. This Agreement together with the Exhibits attached
hereto, the Transaction Document, the Supplemental Agreement and the Meditrust
Purchase Agreement contain the entire understanding of the parties with respect
to the subject matters hereof and supersedes all prior and other contemporaneous
oral or written understandings and agreements between the parties hereto.
12.3 Binding Effect; Assignment. This Agreement, shall be binding upon and inure
to the benefit of the parties hereto and their respective heirs, successors,
personal representatives and permitted assigns. Except as specifically provided
herein, neither party may assign its rights hereunder without the written
consent of the other. Notwithstanding the foregoing, AL Investors may assign
this Agreement in whole or in part to any Facility Entity which holds or is
intended to hold title to any Facility and such Facility Entities' successors
and assigns.
12.4 Notices. Any notice, demand, offer or other writing required or permitted
pursuant to this Agreement shall be in writing, furnished in duplicate and shall
be transmitted by hand delivery, certified mail, return receipt requested, or
Federal Express or another nationally recognized overnight courier service,
postage prepaid, as follows:
If to Seller: c/o Emeritus Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Mr. ▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇ Coie
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn : ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇)▇▇▇-▇▇▇▇
Telephone: (▇▇▇)▇▇▇-▇▇▇▇
If to AL Investors: AL Investors LLC
c/o ▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇, ext. 7143
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With a copy to: ▇▇▇▇▇▇ Pepper & Shefelman PLLC
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Senior Housing Partners I, L.P.
C/o ▇▇. ▇▇▇▇ ▇▇▇▇
Prudential Real Estate Investors
▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇)▇▇▇-▇▇▇▇
Telephone:(▇▇▇)▇▇▇-▇▇▇▇
Any party shall have the right to change the place to which such notice shall be
given by similar notice sent in like manner to all other parties hereto. Any
such notice, if sent by private express overnight courier service, shall be
deemed delivered on the earlier of the date of actual delivery or the next
business day following deposit, postage prepaid, with such private express
overnight courier service and if delivered by hand delivery shall be deemed
delivered on the date of the actual delivery and if sent by mail, shall be
deemed delivered on the earlier of the third day following deposit with the U.S.
Postal Service or actual delivery.
12.5 Captions. The captions of this Agreement are for convenience and reference
only, and in no way define, describe, extend or limit the scope or intent of
this Agreement or the intent of any provisions hereof.
12.6 Joint Effort. The preparation of this Agreement has been the joint effort
of the parties, and the resulting document shall not be construed more severely
against one of the parties than the other.
12.7 Counterparts. This Agreement may be executed in counterparts and each
executed copy shall be deemed an original which shall be binding upon all
parties hereto.
12.8 Partial Invalidity. The invalidity of one or more of the phrases,
sentences, clauses, sections or articles contained in this Agreement shall not
affect the remaining portions so long as the material purposes of this Agreement
can be determined and effectuated.
12.9 No Offer. Neither the negotiations to date nor the preparation of this
Agreement shall be deemed an offer by any party to the other. No such contract
shall be deemed binding on any party until such party has executed and delivered
a written agreement.
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12.10 Amendments. This Agreement may not be amended in any respect whatsoever
except by a further agreement, in writing, fully executed by each of the
parties.
12.11 Exhibits. All Exhibits referred to in this Agreement shall be incorporated
into this Agreement by such reference and shall be deemed a part of this
Agreement as if fully set forth in this Agreement.
12.12 Governing Law and Attorneys' Fees. This Agreement including the validity
thereof and the rights and obligations of the parties hereunder shall be
governed by and construed in accordance with the laws of the State of Washington
without regard to its principals of conflicts of laws. AL Investors may enforce
any or all of the provisions of this Agreement directly against Sellers or any
of them in the State of Washington or at its option may enforce this Agreement
on behalf of any Facility Entity in the state in which such Facility Entity owns
a Facility. In the event any party brings an action or any other proceeding
against another party to enforce or interpret any of the terms, covenants or
conditions hereof, the party prevailing in any such action or proceeding shall
be paid all costs and reasonable attorneys' fees by the party or parties not
prevailing in such amounts as may be set by the court, at trial and on appeal.
12.13 Third Parties. Nothing in this Agreement, whether express or implied, is
intended to confer any rights or remedies under or by reason of this Agreement
on any Person other than the Facility Entities, which are intended third party
beneficiaries.
12.14 Rules of Construction. References in this Agreement to "herein," "hereof"
and "hereunder" shall be deemed to refer to this Agreement and shall not be
limited to the particular text in which such words appear. The use of any gender
shall include all genders, and the singular number shall include the plural and
vice versa as the context may require.
12.15 Survival. The warranties, representations, covenants and indemnities set
forth in this Agreement shall survive the Closing and shall not be merged in the
Transaction Documents.
12.16 Joint and Several. The obligation of each of the Sellers shall be joint
and several.
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IN WITNESS THEREOF, the parties hereto have hereunto set their hands and seals
as of the data first above appearing. AL INVESTORS: AL INVESTORS LLC, a Delaware
limited liability company
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its : Manager
SELLERS: EMERITUS CORPORATION, a Washington corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Chairman of the Board
EMERITUS PROPERTIES VI, INC., a Washington corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Chairman of the Board
ESC I, L.P., a Washington limited partnership
By: ESC G.P. I, INC., Washington corporation, its general partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Chairman of the Board
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EXHIBITS
EXHIBIT A - Definitions
EXHIBIT B - Purchase Price
EXHIBIT C - Legal Descriptions
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EXHIBIT A
TO PURCHASE AND SALE AGREEMENT
IN CONNECTION WITH PURCHASE OF EMERITUS OWNED FACILITIES
Certain Defined Terms
For all purposes of this Agreement, except as otherwise expressly provided or
unless the context otherwise requires, capitalized terms in the Agreement have
the meanings assigned as set forth below and include the plural as well as the
singular.
Accreditation Body: Any person, including any Person having or claiming
jurisdiction over the accreditation, certification, evaluation or operation of a
Facility.
Affiliate: With respect to any Person (i) any other Person which, directly or
indirectly, controls or is controlled by or is under common control with such
Person, (ii) any other Person that owns, beneficially, directly or indirectly,
five percent (5% or more of the outstanding capital stock, shares or equity
interests of such Person or (iii) any officer, director, employee, general
partner or trustee of such Person, or any other Person controlling, controlled
by, or under common control with, such Person (excluding trustees and Persons
serving in a fiduciary or similar capacity who are not otherwise an Affiliate of
such Person). For the purposes of this definition, "control" (including the
correlative meanings of the terms "controlled by" and "under common control
with"), as used with respect to any Person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of such Person, through the ownership of voting securities,
partnership interests or other equity interests.
Approved Equipment Leases: Leases for any of the Furnishings and Equipment which
have been approved by AL Investors in writing.
Award: All compensation, sums or anything of value awarded, paid or received on
a total or partial Condemnation. Business Day: Any day which is not a Saturday
or Sunday or a public holiday under the laws of the United States of America or
the State of Washington.
Casualty: The damage or destruction by act of god or otherwise ot any portion of
any Facility which would cost more than 550,000 to repair or restore.
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Closing or Closing Date. The date upon which the purchase and sale of the
twenty-two (22) Facilities being purchased from Meditrust closes as defined in
the Purchase Agreement.
Code: The Internal Revenue Code of 1986, as amended.
Condemnation: With respect to any Facility or any interest therein or right
accruing thereto or use thereof (i) the exercise of the power of condemnation,
whether by legal proceedings or otherwise, by a Condemnor or (ii) a voluntary
sale or transfer to any Condemnor under threat of condemnation.
Condemnor: Any public or quasi-public authority, or private corporation or
individual, having the power of condemnation.
Consultants: Collectively, the architects, engineers, inspectors, surveyors and
other consultants that have been engaged from time to time prior to Closing by
the Emeritus Entities or AL Investors to perform services for any of them in
connection with a Facility or this Agreement.
Contracts: Collectively, all Provider Agreements, Residency Agreements, Ordinary
Contracts and Major Contracts. Date of Taking: The date the Condemnor has the
right to possession of the property being condemned. Emeritus Owned Facilities:
Facilities entitled La Villita, ▇▇▇▇▇▇▇ ▇▇▇▇ and Meadowlands Terrace as denoted
under Facility Name below.
Environmental Laws: Environmental Laws means all federal, state, and local laws,
ordinances and regulations and standards, rules, policies and other governmental
requirements, administrative rulings, and court judgments and decrees in effect
now or in the future and including all amendments, that relate to Hazardous
Materials and apply to Emeritus and the Emeritus Entities or to the Land and/or
the Improvements. Hazardous Materials Laws include, but are not limited to, the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
Section 9601, et seq., the Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901, et seq., the Toxic Substance Control Act, 15 U.S.C. Section 2601,
et seq., the Clean Water Act, 33 U.S.C. Section 1251, et seq., and the Hazardous
Materials Transportation Act, 49 U.S.C. Section 1801, and their state analogs.
Escrow Holder: First American Title Insurance Company.
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Facility: Each of the assisted living facilities including the Land,
Improvements and Personal Property associated therewith, located in the city and
state as set forth below:
Facility Name City State Units Beds Facility LLC and LP
La Villita Phoenix AZ 87 110 AL Investors Phoenix
▇▇▇▇▇▇▇ ▇▇▇▇ Clearwater FL 135 200 AL Investors Clearwater
Meadowlands Terrace Waco TX 71 76 AL Investors Waco
The legal description of each of the above Facilities is set forth on Exhibit C
hereto. Facility Entity: Each of the Facility LLC's or LP's which owns or will
own at Closing a Facility as set forth opposite the name of each Facility above.
Furnishings and Equipment: All furniture, furnishings, beds, televisions,
equipment, food service, equipment, apparatus, computers and other personal
property used in (or if the context so dictates, required in connection with),
the operation of each Facility, other than Operating Equipment, Operating
Supplies and fixtures attached to and forming part of the Improvements.
Governmental Authorities: Collectively, all agencies, authorities, bodies,
boards, commissions, courts, instrumentalities, legislatures, and offices of any
nature whatsoever of any government, quasi-government unit or political
subdivision, whether with a federal, state, county, district, municipal, city or
otherwise and whether now or hereinafter in existence which exercises
jurisdiction over any Facility.
Hazardous Substances: "Hazardous Substances" shall mean petroleum and petroleum
products and compounds containing them, including gasoline, diesel fuel and oil;
explosives; flammable materials, radioactive materials; polychlorinated
biphenyls ("PCBs") and compounds containing them; lead and lead-based paint;
asbestos or asbestos-containing materials in any form that is or could become
friable; underground storage tanks, whether empty or containing any substance;
any substance the presence of which on any Facility is prohibited by any
federal, state or local authority; any substance that requires special handling;
and any other material, or substance now or in the future defined as a
"hazardous substance," "hazardous material," hazardous waste," "toxic
substance," "toxic pollutant," "contaminant," or "Pollutant" within the meaning
of any Environmental Law. Provided, however, Hazardous Substances shall not
include the safe and lawful use and storage of quantities of (i) pre-packaged
supplies, medical waste, cleaning materials and petroleum products customarily
used in the operation and maintenance of comparable Facilities, (ii) cleaning
materials, personal grooming items and other items sold in pre-packaged
containers for consumer use and used
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by occupants of any Facility; and (iii) petroleum products used in the operation
and maintenance of motor vehicles from time to time located on the Facilities'
parking areas, so long as all of :he foregoing are used, stored, handled,
transported and disposed of in compliance with Environmental Laws.
Improvements: The buildings, structures (surface and sub-surface) and other
improvements now or hereafter located on the Land.
Junior Loan: Any indebtedness incurred by Owners which is secured by a mortgage,
pledge, and related security instruments against the membership interests of AL
Investors in the Facility Entities. Initially, the Junior Loan is evidenced by
that certain Loan Agreement between AL Investors (and the Facility Entities) and
Senior Housing Partners I, L.P. dated on or about the same date hereof ("Initial
Junior Loan"). Land. The parcel or parcels of land on which each of the
Facilities is situated, together with all rights of ingress and egress thereto
and parking associated therewith as legally described on Exhibit C.
Leases: Collectively, the Ordinary Leases and Major Leases.
Legal Requirements: Collectively, all statutes, ordinances, by-laws, codes,
rules, regulations, restrictions, orders, judgments, decrees and injunctions
(including, without limitation, all applicable building, health code, zoning,
subdivision, and other land use and assisted living licensing statutes,
ordinances, by-laws, codes, rules and regulations), whether now or hereafter
enacted, promulgated or issued by any Governmental Authority, Accreditation Body
or Third Party Payor affecting a Facility Entity or any Facility or the
ownership, construction, development, maintenance, management, repair, use,
occupancy, possession or operation thereof or the operation of any programs or
services in connection with the Facility, including, without limitation, any of
the foregoing which may (i) require repairs, modifications or alterations in or
to the Facility, (ii) in any way affect (adversely or otherwise) the use and
enjoyment of the Facility or (iii) require the assessment, monitoring, clean-up,
containment, removal, remediation or other treatment of any Hazardous Substances
on, under or from the Facility. Without limiting the foregoing, the term "Legal
Requirements" includes all Environmental Laws and shall also include all Permits
and Contracts issued or entered into by any Governmental Authority, any
Accreditation Body and/or any Third Party Payor and all Permitted Encumbrances.
Lending Group: GMAC Commercial Mortgage for itself and as agent for other
participating lenders in a debt facility to AL Investors secured by the
Facilities in the maximum aggregate original principal balance of $138,000,000.
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Lien: With respect to any real or personal property, any mortgage, mechanics' or
materialmen's lien, pledge, collateral assignment, hypothecation, charge,
security interest; title retention agreement, levy, execution, seizure,
attachment, garnishment or other encumbrance of any kind in respect of such
property which secures or is intended to secure the payment of money, whether or
not inchoate, vested or perfected.
Major Contracts: Any contract for the purchase of goods or services or any other
agreement which requires payments in excess of 550,000 per year for any Facility
or has a noncancellable term in excess of one year or in which the provider of
the goods or services is an Emeritus Entity or an Affiliate of any of them.
Major Lease: Any Lease which has a noncancellable term in excess of one year or
a rental payment in excess of $10,000 per year or pursuant to which an Emeritus
Entity or an Affiliate of any of them is the tenant.
Managed Care Plans: All health maintenance organizations, preferred provider
organizations, individual practice associations, competitive medical plans, and
similar arrangements.
Managers: Any Person who has entered into a Management Agreement with a Facility
Entity, which initially shall mean Emeritus Management LLC and Emeritus
Management I LP. or any other entity approved by AL Investors. Medicaid: The
medical assistance program established by Title XIX of the Social Security Act
and any statute succeeding thereto.
Medicare: The health insurance program for the aged and disabled established by
Title XVIII of the Social Security Act and any statute succeeding thereto.
Meditrust: Meditrust Acquisition Corporation I and Meditrust Company LLC.
Mortgage: collectively, the terms and conditions of the Senior Loan and the
Junior Loan.
Operating Equipment: All dishes, glassware, bed coverings, towels, silverware,
uniforms and similar items used in, or held in storage for use in (or if the
context so dictates, required in connection with the operation of the
Facilities.
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Operating Supplies: All consumable items used in, or held in storage for use in
(or if the context so dictates, required in connection with), the operation of
the Facilities, including food, medical supplies, fuel, soap, cleaning
materials, and other similar consumable items.
Ordinary Contracts: All agreements and contracts to purchase goods and services
(excluding Major Contracts) to the extent such other agreements and contracts
have been entered into by the Emeritus Entities in the ordinary course of
business of construction, owning, operating or managing the Facilities, contract
rights (including without limitation, warranties provided in construction
contracts, subcontracts, and architects' contracts), right to proceeds or
payment on account of any Award or Casualty, warranties and representations,
franchises, and records and books of account benefiting, relating to or
affecting the Facility or the operation of any programs or services in
conjunction with the Facility and all renewals, replacement and substitutions
therefor entered into by the Emeritus Entities with any Governmental Authority,
Accreditation Body or Third Party Payor or entered into by any of the Emeritus
Entities with any third Person, excluding, however, any agreements pursuant to
which money has been or will be borrowed or advanced, the Facility Leases, the
Leases, any agreements with or obligations relating to employees of a Facility,
and any agreement creating or permitting any Lien, or other encumbrance on title
(except for the Permitted Exceptions), and any Major Contract.
Ordinary Leases: Collectively, all subleases, licenses, use agreements,
equipment leases, concession agreements, tenancy at will agreements and other
occupancy agreements (but excluding any Residency Agreement, Facility Lease or
Major Lease), whether oral or in writing, entered into by any of the Emeritus
Entities and encumbering or affecting a Facility.
Permits: Collectively, all permits, licenses, approvals, qualifications, rights,
variances, permissive uses, accreditation, certificates, certifications,
consents, agreements, contracts, contract rights, franchises, interim licenses,
permits and other authorizations of every nature whatsoever required by, or
issued under, applicable Legal Requirements relating or affecting a Facility or
the construction, development, maintenance, management, use or operation
thereof, or the operation of any programs or services in conjunction with the
Facility and all renewals, replacements and substitutions therefor, now or
hereafter required or issued by any Governmental Authority, Accreditation Body
or Third Party Payor, or maintained or used by any of the Emeritus Entities, or
entered into by any of the Emeritus Entities with any third Person with respect
to a Facility.
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Permitted Exceptions: The exceptions to title approved by AL Investors pursuant
to the Purchase Agreement or the Emeritus Purchase and Sale Agreement, including
the Approved Equipment Leases.
Person: Any individual, corporation, general partnership, limited partnership,
joint venture, stock company or association, company, bank, trust, trust
company, land trust, business trust, unincorporated organization, unincorporated
association, Governmental Authority or other entity of any kind or nature.
Personal Property: All machinery, equipment, furniture, furnishings, vehicles,
movable walls or partitions, computers or trade fixtures, goods, inventory,
supplies, the name of the Facility, and other personal or intangible property
located on or in or used in connection with a Facility including, but not
limited to, all Operating Equipment, Furnishings and Equipment and Operating
Supplies but excluding vans and buses. Prime Rate: The variable rate of interest
per annum from time to time set forth in the Wall Street Journal as the prime
rate of interest and in the event that the Wall Street Journal no longer
publishes a prime rate of interest, then the Prime Rate shall be deemed to be
the variable rate of interest per annum which is the prime rate of interest or
base rate of interest from time to time announced by any major bank or other
financial institution reasonably selected by AL Investors.
Provider Agreements: All participation, provider and reimbursement agreements or
arrangements, if any, in effect for the benefit of the Emeritus Entities or
Meditrust in connection with the operation of the Facility relating to any right
of payment or other claim arising out of or in connection with participation in
any Third Party Payor Program. Real Estate: Collectively, (i) the Land, (ii) the
Improvements, and (iii) all rights, rights-of-way, easements, mineral rights,
privileges, options, leases, licenses, and appurtenances in any manner belonging
to, or pertaining to, the Land and the Improvements.
Residency Agreement: All contracts, agreements and consents executed by or on
behalf of any resident or other Person seeking services at the Facility,
including, without limitation, assignments of benefits and guarantees. Senior
Loan: any indebtedness incurred by Owners which is secured by any mortgage, deed
of trust and related security instruments against a Facility. Initially, the
Senior Loan is evidenced by that certain Loan Agreement between AL Investors
(and the Facility Entities) and GMAC Commercial Mortgage Corporation dated on or
about the same date hereof ("Initial Senior Loan").
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Third Party Payor Programs: Collectively, all third party payor programs in
which the Emeritus Entities presently or in the future may participate,
including without limitation, Medicare. N1edicaid, Blue Cross and/or Blue
Shield, Managed Care Plans, other private insurance plans and employee
assistance programs. Third Party Payors: Collectively, Medicare, Medicaid, Blue
Cross and/or Blue Shield, private insurers and any other Person which presently
or in the future maintains Third Party Payor Programs. Title Company: First
American Title Insurance Company.
Unavoidable Delays: Delays due to strikes, lockouts, inability to procure
materials, power failure, acts of God, governmental restrictions, enemy action,
civil commotion, fire, unavoidable casualty or other causes beyond the control
of the party responsible for performing an obligation hereunder, provided that
lack of funds shall not be deemed a cause beyond the control of either party
hereto.
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