EXHIBIT 10.31
EXECUTION VERSION

PURCHASE AGREEMENT
BY AND BETWEEN
THE ENTITY SET FORTH UNDER THE HEADING “PURCHASER”
ON THE SIGNATURE PAGES HERETO
AND
EACH OF THE ENTITIES SET FORTH UNDER THE HEADING “SELLERS”
ON THE SIGNATURE PAGES HERETO
November 18, 2013

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TABLE OF CONTENTS
 
 
 
 
 
Page
ARTICLE I PURCHASE AND SALE
1
Section 1.1
Transfer
1
Section 1.2
Closing
4
Section 1.3
Purchase Price
4
Section 1.4
Reserved
4
Section 1.5
Payment of Purchase Price
5
Section 1.6
Assumed Liabilities
5
Section 1.7
Excluded Liabilities
5
Section 1.8
Allocation of Purchase Price
5
 
 
 
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE SELLERS
6
Section 2.1
Organization and Qualification
7
Section 2.2
Authority; Binding Effect; Approvals; No Conflicts
7
Section 2.3
Permits; Licenses
9
Section 2.4
Governmental Approvals
9
Section 2.5
Financial Statements
9
Section 2.6
Absence of Certain Changes, Events and Conditions
9
Section 2.7
Title to Personal Property
9
Section 2.8
Condition and Sufficiency of Assets
9
Section 2.9
Real Property
9
Section 2.10
Compliance with Laws
10
Section 2.11
Hazardous Substances
10
Section 2.12
No Litigation
11
Section 2.13
Employees
11
Section 2.14
ERISA
11
Section 2.15
Insurance
11
Section 2.16
Brokers and Finders
12
Section 2.17
OFAC
12
 
 
 
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
13
Section 3.1
Organization; Etc
13
Section 3.2
Authority, Binding Effect
13
Section 3.3
No Litigation
13
Section 3.4
Governmental Approvals
14
Section 3.5
Brokers and Finders
14
Section 3.6
Available Funds
14
 
 
 
ARTICLE IV COVENANTS OF THE SELLERS
14
Section 4.1
Interim Operating Covenants
14
Section 4.2
Liens
15
Section 4.3
Inspection Rights
15
Section 4.4
Title Insurance and Surveys
16

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Section 4.5
Further Assurances
17
Section 4.6
8-K Requirements
18
Section 4.7
Phase I Updates
19
Section 4.8
Myrtle Beach/Yardley Commons
19
 
 
 
ARTICLE V COVENANTS OF THE PURCHASER
20
Section 5.1
Cooperation
20
Section 5.2
Further Assurances
20
 
 
 
ARTICLE VI OTHER COVENANTS
20
Section 6.1
Confidentiality
20
Section 6.2
Casualty Event
21
Section 6.3
Condemnation Event
22
 
 
 
ARTICLE VII INDEMNIFICATION
22
Section 7.1
Indemnification by the Sellers
22
Section 7.2
Indemnification by the Purchaser
23
Section 7.3
Notification of Claims
24
Section 7.4
Survival of Representations
25
Section 7.5
No Punitive Damages
26
Section 7.6
Broker’s Fee
26
Section 7.7
Treatment of Indemnification Payments
26
Section 7.8
Survival
26
 
 
 
ARTICLE VIII CONDITIONS
27
Section 8.1
Conditions to Each Party’s Obligations
27
Section 8.2
Conditions to Obligations of the Purchaser
27
Section 8.3
Conditions to Obligations of the Sellers
27
 
 
 
ARTICLE IX CLOSING
28
Section 9.1
Possession
28
Section 9.2
Closing Documents
28
Section 9.3
Closing Adjustments
31
Section 9.4
Closing Costs; Transfer Taxes
31
Section 9.5
Survival
31
 
 
 
ARTICLE X TERMINATION AND ABANDONMENT
32
Section 10.1
Method of Termination
32
Section 10.2
Procedure Upon Termination
33
Section 10.3
Effect of Termination; Remedies for Default; Break Up Fees
33
 
 
 
ARTICLE XI MISCELLANEOUS PROVISIONS
34
Section 11.1
Amendment and Modification
34
Section 11.2
Waiver of Compliance; Consent
34
Section 11.3
Notice
34
Section 11.4
Bulk Sales Laws
35
Section 11.5
Expenses
35

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Section 11.6
Assignment
35
Section 11.7
Governing Law
35
Section 11.8
Business Day
36
Section 11.9
Counterparts
36
Section 11.10
Headings
36
Section 11.11
Entire Agreement
36
Section 11.12
Warranty of Authority
36
Section 11.13
Publicity
36
Section 11.14
Waiver of Jury Trial
36
Section 11.15
Third Party Beneficiaries
36
Section 11.16
Interpretation
36
Section 11.17
Submission to Jurisdiction
37
Section 11.18
Severability
37

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LIST OF EXHIBITS AND SCHEDULES
Exhibit A        Facilities
Exhibit B        Purchase Price Allocation
Exhibit 9.2(a)(ii)    Form of Bill of Sale
Exhibit 9.2(a)(iii)    Form of Assignment and Assumption of Other Property
Exhibit 9.2(a)(v)    Form of FIRPTA Certificate
Exhibit 9.2(a)(vii)     Form of Seller Certificate
Exhibit 9.2(a)(xii)    Form of Master Lease
Exhibit 9.2(a)(xiii)    Form of Assignment of Membership Interests
Exhibit 9.2(b)(ii)    Form of Purchaser Certificate
Schedule 1        Required Approvals
Schedule 2.3        Permits and Licenses
Schedule 2.4        Governmental Approvals
Schedule 2.9        Real Estate Matters
Schedule 2.11 (a)    Environmental Matters
Schedule 2.11(b)    Hazardous Substances Storage
Schedule 2.11(c)    CERLCIS
Schedule 2.11(d)    Hazardous Substance Release
Schedule 2.12        Legal Proceedings
Schedule 2.15        Insurance
Schedule 2.16        Brokers

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INDEX OF DEFINED TERMS
As used herein the following terms shall have the meanings indicated below:

“Affiliate” shall mean, as applied to any Person, any other Person directly or
indirectly controlling, controlled by or under common control with or by such
Person. For purposes of this definition, “control” (including the terms
“controlling,” “controlled by” and “under common control with”) will mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities or by contract or otherwise.

“Agreement” shall have the meaning set forth in the preamble.

“Ancillary Assets” shall have the meaning set forth in Section 1.1(b).

“Applicable Laws” shall mean all statutes, laws, ordinances, rules, regulations,
requirements, judgments, orders and decrees of any Governmental Authority
applicable to Sellers, Purchaser, and/or the Assets, including applicable
zoning, building, safety and environmental laws, ordinances and codes and other
federal, state and municipal requirements.

“Approvals” shall mean (i) all waivers, permits, consents, approvals or other
authorizations from Governmental Authorities or third parties including joint
venture partners, and (ii) all registrations, filings and notices with or to
Governmental Authorities or third parties, in each case, as are required for
Sellers to consummate the transactions contemplated by this Agreement.

“Assets” shall have the meaning set forth in Section 1.1(a).

“Assigned Records” shall have the meaning set forth in Section 1.1(a)(v).

“Assumed Liabilities” shall have the meaning set forth in Section 1.6.

“Break Up Fee” shall mean Seven Million Five Hundred Thousand Dollars
($7,500,000).

“Books and Records” shall have the meaning set forth in Section 1.1(a)(vi).

“Business” shall have the meaning set forth in the recitals.

“Business Day” shall mean any day other than a Saturday, Sunday or any other day
on which banks are authorized to be closed in the State of New York. Time is of
the essence with respect to all terms, provisions, covenants and conditions
contained in this Agreement.
“Casualty Event” shall mean damage or loss to or destruction by fire or other
casualty of any one or more of the Facilities, the costs of repair for which are
reasonably estimated to exceed Ten Million Dollars ($10,000,000) in the
aggregate.
“Closing” shall have the meaning set forth in Section 1.2.
“Closing Date” shall have the meaning set forth in Section 1.2.

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“Closing Statement” shall have the meaning set forth in Section 9.2(a)(ix).
“Code” shall mean the Internal Revenue Code of 1986, as amended, and the rules
and regulations promulgated thereunder.
“Common Products” shall have the meaning set forth in Section 2.11(b).
“Confidential Information” shall mean all non-public, proprietary or
confidential information that any Party obtains from the other in connection
with, or pursuant to, this Agreement.
“Contracts” shall have the meaning set forth in Section 1.1(b)(vi).
“Copied Records” shall have the meaning set forth in Section 1.1(a)(vi).
“Data Site” shall mean the data site created by Sellers at
http://holidayretirement.firmex containing information related to the Assets.
“Disclosure Schedules” shall have the meaning set forth in Article II.
“Effective Date” shall have the meaning set forth in the preamble.
“Environmental Laws” shall have the meaning set forth in Section 2.11.
“Excluded Assets” shall have the meaning set forth in Section 1.1(b).
“Excluded Documents” shall have the meaning set forth in Section 1.1(b)(iii).
“Excluded Liabilities” shall have the meaning set forth in Section 1.7.
“Excluded Provisions” shall have the meaning set forth in Section 4.8.
“Facility” or “Facilities” shall have the meaning set forth in the recitals.
“Facility Balance Sheets and Income Statements” shall have the meaning set forth
in Section 2.5.
“Facility Material Adverse Effect” shall mean, with respect to any Facility, any
event, occurrence, change or effect that is, or is reasonably likely in the
future to be, individually or in the aggregate materially adverse to the
business, operations, results of operations, condition (financial or otherwise),
properties (including intangible properties), rights, obligations or assets of
such Facility; provided, however, that a Facility Material Adverse Effect shall
not include any event, change or effect arising out of or relating to (i)
general political, economic or financial market conditions (or changes in such
conditions), (ii) changes generally affecting the industries in which such
Facility operates, (iii) any change in Applicable Law or interpretations thereof
by a Governmental Authority thereof or any change in GAAP or other accounting
principles or requirements, (iv) any natural disaster, epidemic, acts of
terrorism, sabotage or war, including any escalation or general worsening of any
such events, changes or events, (v) the execution, delivery or announcement of
this Agreement if done in accordance with the terms of this Agreement (including
as to the identity of the Purchaser) or the pendency or consummation of the
transactions contemplated hereunder, including any losses or threatened losses
of employees,

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customers, suppliers, distributors or others having relationships with the
Sellers and their Affiliates, (vi) any failure to meet any internal or published
projections, forecasts or revenue or earnings predictions for any period ending
on or after the Effective Date, (vii) compliance with the terms of, or the
taking of any action permitted or required by, this Agreement or with the prior
written consent or at the direction of the Purchaser (or any action not taken as
a result of a failure of the Purchaser to consent to an action otherwise
requiring the Purchaser’s consent) or (viii) any of the items listed in the
Disclosure Schedules.
“Financial Statements” shall have the meaning set forth in Section 1.1(a)(vi).
“Governmental Authority” shall mean any court, board, agency, commission, office
or authority of any nature whatsoever for any governmental unit (federal, state,
county, district, municipal, city, foreign or otherwise) whether now or
hereafter in existence having jurisdiction over any Seller, any of the Assets,
or Purchaser, as applicable.
“Hazardous Substance” shall have the meaning set forth in Section 2.11.
“Immaterial Taking” shall mean any condemnation or taking by any Governmental
Authority with respect to one or more Facilities other than a condemnation or
taking which renders such Facility or Facilities less than a functional
structure in all material respects within which to continue to operate the
Business thereon and the portion of the Purchase Price allocated to such
Facility or Facilities pursuant to Section 1.7 of this Agreement is in excess of
Ten Million Dollars ($10,000,000).
“Improvements” shall mean, collectively, the Seller Improvements.
“Indebtedness” means, for any Person, without duplication: (a) all indebtedness
of such Person for borrowed money (including the principal amount thereof, any
accrued interest thereon and any prepayment premiums or termination fees with
respect thereto), for amounts drawn under a letter of credit, or for the
deferred purchase price of property for which such Person is liable, (b) all
unfunded amounts under a loan agreement, letter of credit (unless secured in
full by cash), or other credit facility for which such Person would be liable or
subject, if such amounts were advanced under the credit facility, (c) any
indebtedness arising under any capital lease, conditional sales contract and
other similar title retention instrument, whether short term or long term, (d)
all liabilities, including judgments, secured by any Liens on any of the Assets,
(e) all liabilities under any interest rate protection agreement, interest rate
future agreement, interest rate option agreement, interest rate swap agreement
or other similar agreement designed to protect the Seller against fluctuations
in interest rates, (f) any indebtedness evidenced by any note, bond, debenture
mortgage or other debt instrument or debt security, (g) all interest, fees and
other expenses owed with respect to indebtedness described in the foregoing
clauses (a) through (f), and (h) all indebtedness referred to in the foregoing
clauses (a) through (g) which is directly or indirectly guaranteed by any Seller
or that is secured by the Assets.
“Inspection Period” means the period beginning on the Effective Date and ending
at 6:00 p.m. ET on the seven (7) day anniversary of the Effective Date.
“Indemnified Party” shall have the meaning set forth in Section 7.3(b).

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“Indemnifying Party” shall have the meaning set forth in Section 7.3(b).
“Initial Surveys” shall have the meaning set forth in Section 4.4(a).
“Initial Title Commitments” shall have the meaning set forth in Section 4.4(a).
“Inventory” shall have the meaning set forth in Section 1.1(b)(x).
“Land” shall mean, collectively, the Seller Land.
“Leases” shall have the meaning set forth in Section 1.1(b)(v).
“Legal Proceedings” shall have the meaning set forth in Section 2.12.
“License” or “Licenses” shall have the meaning set forth in Section 2.3.
“Lien” shall mean any lien, claim, charge, encumbrance, security interest,
mortgage, pledge, easement, or conditional sale or other title retention
contract.
“Manager” shall mean Harvest Management Sub LLC.
“Master Lease” shall have the meaning set forth in Section 9.2(a)(xii).
“Master Tenant” shall have the meaning set forth in Section 9.2(a)(xii).
“Monetary Lien Condition” shall mean the removal of any and all Liens securing
the Outstanding Debt.
“Myrtle Beach Fee Owner” shall mean Myrtle Beach Retirement Residence LLC.
“Myrtle Beach Seller” shall mean Harvest Managing Member II, LLC and Harvest
Mezzanine II LLC.
“Myrtle Beach Fee Owner Assets” shall have the meaning set forth in Section 4.8.
“New Manager” shall mean Holiday AL Management Sub LLC.
“New Title Matter” shall have the meaning set forth in Section 4.4(b).
“OFAC” shall have the meaning set forth in Section 2.17.
“Other Property” shall have the meaning set forth in Section 1.1(a)(iii).
“Outside Date” shall mean December 31, 2013.
“Outstanding Debt” means indebtedness evidenced by the following agreement: Loan
Agreement (as amended, restated, supplemented or modified from time to time),
dated as of February 28, 2007, by and among the borrowers identified therein and
Citigroup Global Markets

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Realty Corp., and Goldman Sachs Commercial Mortgage Capital, L.P., as succeeded
by Fannie Mae, in the original principal amount of $1,756,094,352.47.
“Outdated Initial Surveys” shall have the meaning set forth in Section 4.4(b)
“Party” or “Parties” shall have the meaning set forth in the preamble.
“Permitted Liens” shall have the meaning set forth in Section 4.4(b).
“Person” shall mean an individual, partnership, joint venture, corporation,
trust, estate, association, Governmental Authority or other legal entity.
“Personal Property” shall have the meaning set forth in Section 1.1(a)(iv).
“Proprietary Software” shall have the meaning set forth in Section 1.1(b)(ix).
“Purchase Price” shall have the meaning set forth in Section 1.3.
“Purchaser” shall have the meaning set forth in the preamble.
“Purchaser Basket” shall have the meaning set forth in Section 7.2(b).
“Purchaser Certificate” shall have the meaning set forth in Section 9.2(b)(ii).
“Purchaser Documents” shall have the meaning set forth in Section 9.2(b).
“Purchaser Indemnified Losses” shall have the meaning set forth in Section
7.1(a).
“Purchaser Indemnified Parties” shall have the meaning set forth in Section
7.1(a).
“Purchaser Knowledge Individuals” shall have the meaning set forth in Article
III.
“Purchaser Material Adverse Effect” shall mean, with respect to the Purchaser, a
material adverse effect on the ability of the Purchaser to timely perform its
obligations hereunder or under any Purchaser Documents or to timely consummate
the transactions contemplated by this Agreement.
“Purchaser Representative” shall have the meaning set forth in Section 4.3(b).
“Purchaser’s Expenses” shall mean all actual out-of-pocket costs and expenses
incurred by the Purchaser in connection with the transactions contemplated by
this Agreement, including, without limitation, due diligence expenses, legal
expenses, and expenses in connection with preparations for Closing, but,
excluding any hedging costs; provided however, Purchaser’s Expenses, for which
the Sellers may have a reimbursement obligation hereunder, shall not include any
underwriting fees, discounts, commissions or similar expenses incurred in
connection with any equity offering or debt financing.
“Purchaser’s Knowledge” shall have the meaning set forth in Article III.

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“Required Approvals” shall mean those Approvals listed on Schedule 1.
“Reimbursement Cap” shall mean Seven Hundred and Fifty Thousand Dollars
($750,000).
“Resident Records” shall have the meaning set forth in Section 1.1(b)(viii).
“Section 4.3 Indemnified Parties” shall have the meaning set forth in Section
4.3(b).
“Seller” or “Sellers” shall have the meaning set forth in the preamble.
“Seller Basket” shall have the meaning set forth in Section 7.1(b).
“Seller Certificate” shall have the meaning set forth in Section 9.2(a)(vii).
“Seller Documents” shall have the meaning set forth in Section 9.2(a).
“Seller Improvements” shall have the meaning set forth in Section 1.1(a)(i).
“Seller Indemnified Losses” shall have the meaning set forth in Section 7.2(a).
“Seller Indemnified Parties” shall have the meaning set forth in Section 7.2(a).
“Seller Knowledge Individuals” shall have the meaning set forth in Article II.
“Seller Land” shall have the meaning set forth in Section 1.1(a)(i).
“Seller Material Adverse Effect” shall mean any event, occurrence, change or
effect that is, or is reasonably likely in the future to be, individually or in
the aggregate materially adverse to the business, operations, results of
operations, condition (financial or otherwise), properties (including intangible
properties), rights, obligations or assets of the Facilities or the Business, in
each case taken as a whole; provided, however, that a Seller Material Adverse
Effect shall not include any event, change or effect arising out of or relating
to (i) general political, economic or financial market conditions (or changes in
such conditions), (ii) changes generally affecting the industries in which the
Facilities operate, (iii) any change in Applicable Law or interpretations
thereof by a Governmental Authority or any change in GAAP or other accounting
principles or requirements, (iv) any natural disaster, epidemic, acts of
terrorism, sabotage or war, including any escalation or general worsening of any
such events, changes or events, (v) the execution, delivery or announcement of
this Agreement if done in accordance with the terms of this Agreement (including
as to the identity of the Purchaser) or the pendency or consummation of the
transactions contemplated hereunder, including any losses or threatened losses
of employees, customers, suppliers, distributors or others having relationships
with the Sellers and their Affiliates, (vi) any failure to meet any internal or
published projections, forecasts or revenue or earnings predictions for any
period ending on or after the Effective Date, (vii) compliance with the terms
of, or the taking of any action permitted or required by, this Agreement or with
the prior written consent or at the direction of the Purchaser (or any action
not taken as a result of a failure of the Purchaser to consent to an action
otherwise requiring the Purchaser’s consent) or (viii) any of the items listed
in the Disclosure Schedules.

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“Seller Real Property” shall have the meaning set forth in Section 1.1(a)(ii).
“Seller Representations” shall have the meaning set forth in Article II.
“Seller Response Period” shall have the meaning set forth in Section 4.4(b).
“Sellers’ Knowledge” shall have the meaning set forth in Article II.
“Survival Period” shall have the meaning set forth in Section 7.4(a).
“Surviving Obligations” shall mean those obligations which expressly survive
termination of this Agreement or the Closing, as applicable.
“Title Company” shall have the meaning set forth in Section 4.4(a).
“Title Matters” shall have the meaning set forth in Section 4.4(b).
“Title Objection Notice” shall have the meaning set forth in Section 4.4(b).
“Title Objection Response Notice” shall have the meaning set forth in Section
4.4(b).
“Title Policy” or “Title Policies” shall have the meaning set forth in Section
4.4(c).
“Transfer Taxes” shall have the meaning set forth in Section 9.4(a).
“Unsatisfied Party” shall have the meaning set forth in Section 8.4.
“Updated Report” shall have the meaning set forth in Section 4.7.
“Yardley Fee Owner” shall mean Voorhees Retirement Residence LLC.
“Yardley Seller” shall mean Harvest Managing Member II, LLC and Harvest
Mezzanine II LLC.
“Yardley Fee Owner Assets” shall have the meaning set forth in Section 4.8.
“Work Product” shall have the meaning set forth in Section 1.1(a)(iii).

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PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (this “Agreement”), dated as of this 18th day of
November, 2013 (the “Effective Date”), is made and entered into by and among the
entity set forth under the heading “Purchaser” on the signature pages hereto
(the “Purchaser”), each entity set forth under the heading “Seller” on the
signature pages hereto (individually a “Seller” and, together, the “Sellers”).
Each entity comprising the Sellers and the Purchaser is sometimes referred to
herein individually as a “Party” and collectively as the “Parties.”
RECITALS
A.    Each Seller is in the business (the “Business”) of owning, operating and
maintaining the senior living facility identified next to such Seller’s name, on
Schedule 2.9 (each such facility, a “Facility” and, collectively, the
“Facilities”).
B.     The Purchaser desires to purchase and acquire from the Sellers, and the
Sellers desire to sell and transfer to the Purchaser, all of the Assets (as
defined herein), on the terms and conditions set forth in this Agreement.
Now, therefore, in consideration of the representations, warranties and
covenants herein contained, the Parties agree as follows.
ARTICLE I

PURCHASE AND SALE
Section 1.1    Transfer.
(a)    For the consideration hereinafter provided, in accordance with the terms
and subject to the conditions in this Agreement, at the Closing the Sellers
shall sell, convey, transfer and assign to the Purchaser, and the Purchaser
shall purchase and acquire from the Sellers, free and clear of all Liens, other
than Permitted Liens, the Sellers’ right, title and interest in and to, the
following (specifically excluding the Excluded Assets, hereinafter collectively
referred to as the “Assets”):
(i)    the land, as more particularly described in Exhibit A (collectively, the
“Seller Land”), and all buildings, structures, fixtures, facilities, amenities,
driveways, walkways, parking lots and other improvements located on the Seller
Land (collectively, the “Seller Improvements”);
(ii)     all easements, rights-of-way, rights of ingress and egress, strips,
zones, licenses, transferable hereditaments, privileges, tenements and
appurtenances in any way belonging to or appertaining to the Seller Land or the
Seller Improvements, and any right or interest in any open or proposed highways,
streets, roads, avenues, alleys, easements, strips, gores and rights-of-way in,
across, in front of, contiguous to, abutting or adjoining the Seller Land
(collectively with the Seller Land and the Seller Improvements, the “Seller Real
Property”);

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(iii)    (A) to the extent any Seller’s interest is assignable pursuant to
Applicable Law and to the extent the Purchaser in its sole discretion elects to
assume the same, all licenses, permits, approvals, entitlements, land use
applications, land use permits and approvals, other operating permits and other
governmental authorizations (including certificates of occupancy) issued by any
Governmental Authority for the benefit of the Seller Real Property in connection
with the ownership, operation, planning, development, use or maintenance of any
Seller Real Property and the Business, as applicable, that an operator of a
Facility would not be required to maintain in its own name but which may be held
by the owner of the Seller Real Property separate and apart from those permits
required to be maintained in the name of the operator of a Facility under
Applicable Law, (B) all rights and work product under outstanding construction,
service, consulting, engineering, architectural, design and construction
agreements relating exclusively to the Seller Real Property (the “Work
Product”), (C) to the extent assignable, all construction warranties,
manufacturers’ warranties and other warranties applicable to the Seller Real
Property or the Business, and (D) all development rights related to any portion
of any Seller Real Property (collectively, the “Other Property”);
(iv)    all furniture, appliances, equipment, fixtures, and other tangible
personal property owned by the Sellers and which is used by the Sellers in
connection with the Business (collectively, and together with the Inventory, the
“Personal Property”);
(v)    except for the Excluded Documents, the following documents that relate
exclusively to the Seller Real Property: (A) third party reports and studies
(excluding appraisals), land surveys, structural reviews, environmental
assessments or audits, architectural drawings and engineering, geophysical,
soils, seismic, geologic, environmental (including with respect to the impact of
materials used in the construction or renovation of the Improvements) and
architectural reports, studies and certificates pertaining to the Seller Real
Property, and (B) building designs ((A) and (B) collectively, the “Assigned
Records”);
(vi)    copies of the following records (the parties agreeing that the originals
and all other rights associated therewith shall be retained by the Sellers): (A)
accounting records, including billing records and invoices, (B) regulatory
surveys and reports and incident tracking reports and (C) all financial
statements and other accounting, tax, financial and other books and records, in
each case, relating exclusively to the use, maintenance and operation of the
Seller Real Property and any Facility and/or the Business (collectively, the
“Financial Statements”), but excluding any Excluded Documents (collectively, the
“Copied Records,” and, together with the Assigned Records, the “Books and
Records”); and
(vii)    one hundred percent (100%) of the membership interests in the Myrtle
Beach Fee Owner and the Yardley Fee Owner.
(b)    Notwithstanding anything to the contrary contained herein, no Seller
shall sell, assign, transfer, convey or deliver to the Purchaser, and the
Purchaser shall not purchase, and the Assets shall not include any of the
Sellers’ right, title and interest in the following items (collectively, the
“Excluded Assets”):

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(i)    any bank accounts, cash, cash equivalents, securities and accounts
receivable, prepaid accounts, deposits and advance payments made by the Sellers
and held by third parties with respect to any of the Assets or the Business,
real estate tax, insurance, maintenance, replacement and other escrows, reserves
and impounds held in connection with any loans and any causes of action (but
only to the extent such causes of action relate to periods prior to the
Closing);
(ii)    refunds, rebates and dividends paid in respect of insurance premiums
paid by the Sellers relating to periods prior to the Closing Date, and refunds
and additional recoveries by or payments to the Sellers from any Person for
services, goods or supplies which were provided by such Person to the Sellers
prior to the Closing Date;
(iii)    the following books and records: income tax returns and records, minute
books and other books and records relating solely to the corporate or similar
governance of each Seller as a legal entity (collectively, the “Excluded
Documents”);
(iv)    originals of the Copied Records;
(v)    all leases of all machinery, equipment and other tangible property leased
to any Sellers which are used exclusively at the Seller Real Property and all
leases of any portion of each Facility by any Sellers to any third party other
than a resident (the “Leases”);
(vi)    the agreements and contracts entered into in connection with the
operation of each Facility by the Sellers, Manager or certain affiliates
thereof, as applicable (the “Contracts”);
(vii)    the residency agreements together with any leads regarding prospective
residents;
(viii)    all records and reports relating to residents at the Facilities,
(collectively, the “Resident Records”);
(ix)    all licensed software and proprietary software (the “Proprietary
Software”) used in the operation of the Facilities;
(x)    all materials, supplies, inventory, consumables, perishable and
nonperishable food products, and other similar tangible property used
exclusively in connection with the Business and located on the Seller Real
Property (collectively, the “Inventory”);
(xi)    all motor vehicles used by the Sellers in connection with the Business;
and
(xii)    the trademarks, trade names, service marks, web addresses and telephone
numbers used in connection with the Assets.

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Notwithstanding anything to the contrary contained in this Agreement, any
correspondence and/or communications between counsel, on the one hand, and the
Sellers whether or not covered by attorney-client privilege, and whether or not
related to the transactions contemplated by this Agreement shall remain the
property of the Sellers and the Sellers shall have no obligation to deliver the
same to the Purchaser.
Purchaser and each Seller agree that, upon entry into the Master Lease, all
property, assets, contracts and permits necessary for the operation of the
Assets consistent with past practice that are owned or controlled by the Sellers
immediately prior to the Closing, including, without limitation, the Contracts,
the Leases and residency agreements (the “Ancillary Assets”), shall be leased,
assigned, licensed or otherwise made available to Master Tenant pursuant to the
terms of the Master Lease. In connection therewith, Purchaser hereby directs the
Sellers to, upon the Closing, assign all Ancillary Assets owned or leased by
Sellers after taking into account the transactions described herein, excluding
the Work Product (which Work Product shall be licensed to the Master Tenant
pursuant to the Master Lease), to Master Tenant, for and on behalf of Purchaser.
Section 1.2    Closing.
(a)    Unless this Agreement shall have been terminated pursuant to Article X,
the closing of the transactions contemplated herein (the “Closing”) shall occur
on December 20, 2013 or as soon as possible thereafter. The date on which the
Closing occurs is hereinafter referred to as the “Closing Date”. The Closing
hereunder shall be deemed to be effective as of 11:59 p.m. (ET) on the Closing
Date.
(b)    If the Purchaser does not obtain equity or debt financing for the
acquisition of the Assets on or prior to December 20, 2013, the Purchaser, at
its option, may extend the Closing up to and including the Outside Date by
delivering written notice thereof to the Sellers on or prior to such date,
provided that, in no event may the Purchaser extend the Closing beyond the
Outside Date (except as provided pursuant to Section 4.4(b)).
(c)    If the Sellers do not satisfy the Monetary Lien Condition on or prior to
December 20, 2013, the Sellers, at their option, may extend the Closing up to
and including the Outside Date by delivering written notice thereof to the
Purchaser on or prior to such date, provided that, in no event may the Sellers
extend the Closing beyond the Outside Date (except as provided pursuant to
Section 4.4(b)).
(d)    Notwithstanding anything to the contrary contained herein, if the
Purchaser elects to extend the date of Closing pursuant to Section 1.2(b), any
closing condition that was satisfied as of December 20, 2013 shall be deemed
satisfied as of the extended closing date (notwithstanding any change of
circumstance that would result in the failure of such condition).
Section 1.3    Purchase Price. The aggregate purchase price for the Assets shall
be Four Hundred Ninety One Million Dollars ($491,000,000) (the “Purchase
Price”), subject to the prorations and further adjustments as provided for in
this Agreement.
Section 1.4    Reserved.

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Section 1.5    Payment of Purchase Price. At the Closing, the Purchaser shall
pay to Sellers the Purchase Price adjusted for any credits and additions for the
benefit of the Purchaser and/or the Sellers as specified in Article IX. The
Purchase Price, as adjusted per the foregoing sentence, shall be paid by wire
transfer of immediately available federal funds to the Title Company and such
funds shall then be disbursed to or for the benefit of the Sellers in accordance
with the Closing Statement.
Section 1.6    Assumed Liabilities. From and after the Closing, the Purchaser
shall assume and thereafter pay, perform or otherwise discharge, as and when the
same shall become due and payable, subject to the terms and conditions of the
Master Lease, all liabilities and all obligations arising out of or related to
periods from and after the Closing, or as otherwise expressly set forth herein,
with respect to all of the Assets (the “Assumed Liabilities”).
Section 1.7    Excluded Liabilities. “Excluded Liabilities” shall mean (i) any
obligation or liability accruing, arising out of, or relating to acts or
omissions of any Person in connection with the Assets, the Excluded Assets, the
Facilities or the operation of the Business, in each case, prior to the Closing,
(ii) any Indebtedness of any Seller, (iii) any obligation or liability accruing,
arising out of, or relating to any of the Leases or Contracts for the period, in
each case, prior to the Closing, (iv) any obligation or liability for any
federal, state or local taxes, whether or not accrued, assessed or currently due
and payable, related to the Assets, the Facilities or the Business for the
period, in each case, prior to the Closing, (v) any civil or criminal obligation
or liability accruing, arising out of, or relating to any acts or omissions of
any Seller, any of their respective Affiliates or any of their respective
directors, officers, employees and agents claims to violate any Applicable Laws,
(vi) any obligation or liability accruing, arising out of, or relating to any
federal, state or local investigations, claims or actions with respect to acts
or omissions (or suspected or alleged acts or omissions) of any Seller, their
respective Affiliates or any of their respective employees, agents, or vendors,
(vii) any other obligation or liability, fixed or contingent, known or unknown,
relating to or arising out of the ownership, operation or use of the Assets or
the Facilities, or the operation of the Business, in each case, prior to
Closing, (viii) any liability or obligation of the Sellers or its affiliates
that is not an Assumed Liability; and (ix) any liability related to the Myrtle
Beach Fee Owner or the Yardley Fee Owner, including, without limitation, all
liabilities relating to (i) the ownership or operation of the Myrtle Beach
Facility or the Yardley Commons Facility, in each case, relating to the period
on or prior to the Closing, or (ii) the execution and delivery of the documents
described in Section 9.2(a)(xiii) at the Closing.
Section 1.8    Allocation of Purchase Price. Sellers and the Purchaser agree
that the Purchase Price shall be allocated among the Assets at the Closing as
provided and as described in the allocation statement attached hereto as Exhibit
B, which Exhibit B shall show the aggregate amount of the Purchase Price being
allocated to each Facility. Within forty five (45) days following the Closing
Date (or such other time period as reasonably agreed by Purchaser and Sellers),
the Parties will mutually agree on the amount of the Purchase Price allocated to
the Personal Property. The Sellers shall timely and properly prepare, execute
(with the Purchaser, as required), file and deliver all such documents, forms
and other information as the Purchaser may reasonably request to prepare and
determine such allocation. Each Party hereby covenants and agrees (i) to timely
file all forms (including IRS Form 8594) and tax returns required to be filed in
connection with such allocation and (ii) to take no position on any income tax
return or form,

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before any governmental agency charged with the collection of any income tax, in
any judicial proceeding or otherwise with any Governmental Authority that is any
way inconsistent with the terms of this Section 1.7, unless otherwise required
by Applicable Law.
ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE SELLERS
The disclosure schedules attached hereto (the “Disclosure Schedules”) are
arranged in sections and subsections corresponding to the numbered and lettered
sections and subsections contained in this Agreement to which such sections and
subsections of the Disclosure Schedules relate. Notwithstanding the foregoing,
information disclosed in any section or subsection of the Disclosure Schedules
shall be deemed to be disclosed with respect to all other sections or
subsections of this Agreement. An exception to a representation or warranty in
this Article II set forth in the Disclosure Schedules effectively modifies the
corresponding representation or warranty in this Article II, notwithstanding
whether such representation and warranty specifically references the Disclosure
Schedules. Any fact or item disclosed in any section of the Disclosure Schedules
shall not be deemed, solely by reason of such inclusion, to be material and
shall not be employed as a point of reference in determining any standard of
materiality under this Agreement. In connection with the remaking of
representations and warranties as of the Closing (but not as to representations
and warranties made as of the Effective Date), Sellers shall be permitted to
update the Disclosure Schedules to accurately reflect the current state of
matters as of the Closing.
Notwithstanding anything to the contrary contained herein, any reference in this
Agreement to “Sellers’ Knowledge,” or words of similar import, shall be deemed
to refer exclusively to the matters within the actual knowledge of Kai Hsiao,
Scott Shanaberger and Christopher Bouchard (“Seller Knowledge Individuals”),
which individuals are the individuals in the Sellers’ organization who are most
knowledgeable of the matters set forth herein. As regards any representations or
warranties in this Agreement that are qualified to the extent of “Sellers’
Knowledge”, the Seller Knowledge Individuals shall have a duty of reasonable
inquiry of the appropriate persons employed by the Manager into the matters
which are the subject of such representations or warranties; provided that, in
no event will the Seller Knowledge Individuals have any duty of reasonable
inquiry with respect to persons employed at the Facility level.
The Purchaser acknowledges and agrees that neither the Sellers nor any of their
representatives or agents have made, nor are they making, any representations or
warranties whatsoever regarding the Assets or the subject matter of this
Agreement, express or implied, except for the Seller Representations, and that
the Purchaser is not relying, and has not relied, on any representations or
warranties whatsoever regarding the Assets or the subject matter of this
Agreement, express or implied, except for the representations and warranties in
this Agreement or in the Seller Documents delivered to Purchaser at the Closing
(collectively, the “Seller Representations”).
Each Seller represents and warrants, as applicable, to the Purchaser, as of the
Effective Date and as of the Closing Date (unless otherwise expressly provided),
that except as set forth in the Disclosure Schedules:

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Section 2.1    Organization and Qualification.
(a)    (i) Each Seller is duly organized and validly existing and in good
standing under the laws of the jurisdiction in which it is formed with all
requisite power and authority to carry on its respective business as currently
being conducted and to own or lease and operate the assets it owns or leases as
and in the places now owned, leased or operated, respectively; and (ii) each
Seller is duly qualified or licensed to do business and is in good standing in
each jurisdiction in which the nature of its business or the ownership,
management or operation of the Facilities makes such qualification or licensing
necessary, other than in such jurisdictions where the failure to be so qualified
or licensed, individually or in the aggregate, has not resulted in, and would
not be reasonably expected to result in, a Seller Material Adverse Effect.
Section 2.2    Authority; Binding Effect; Approvals; No Conflicts;
Capitalization.
(a)    (i) Each Seller has, and at the Closing each Seller will have, the
requisite limited liability company or limited partnership right, power and
authority, as applicable, to execute, deliver and perform its obligations with
respect to this Agreement and its Seller Documents and (ii) the execution,
delivery, performance and consummation of this Agreement, the applicable Seller
Documents and all of the transactions contemplated herein and therein have been
duly authorized and approved by all necessary partnership or limited liability
company action of each Seller, as applicable.
(b)    This Agreement and each Seller Document, upon due execution and delivery
by each Seller party thereto, will constitute the legal, valid, and binding
obligation of such Seller, enforceable against such Seller in accordance with
its terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors’
rights generally or by application of equitable principles.
(c)    The execution, delivery and performance of this Agreement and the Seller
Documents by each Seller party thereto does not and will not: (i) conflict with
or result in any breach or violation of the provisions of, or constitute a
default under the organizational documents of any Seller, (ii) subject to
obtaining the Required Approvals, violate (or give rise to any right of
termination, cancellation or acceleration under) any mortgage, deed of trust,
license, permit, lease, indenture, contract, agreement, obligation, commitment,
arrangement, understanding, instrument or other agreement or instrument, whether
oral or written, to which any Seller is a party, or by which it or any of its
assets are bound, or result in the termination of any such instrument or
termination of any provisions in such instrument, in each case that would,
individually or in the aggregate, have a Facility Material Adverse Effect; (iii)
result in the creation or imposition of any Lien (other than Permitted Liens,
and whether arising by contract or by operation of law) upon the Assets that
would, individually or in the aggregate, have a Facility Material Adverse
Effect; or (iv) violate any Applicable Law that would, individually or in the
aggregate, have a Facility Material Adverse Effect.
(d)    The Myrtle Beach Seller owns 100% of the issued and outstanding
membership or equity interests of the Myrtle Beach Fee Owner, free and clear of
any Liens other than Permitted Liens. With respect to the Myrtle Beach Fee
Owner, there are no outstanding: (i) securities convertible into or exchangeable
for any membership interests or other securities of the

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Myrtle Beach Fee Owner; (ii) offers, subscriptions, options, “phantom” stock
rights, stock appreciation rights, stock-based performance units, warrants,
calls, commitments, preemptive rights or other rights of any kind (absolute,
contingent or otherwise, including under employee benefit arrangements)
entitling any Person to acquire or otherwise receive from the Myrtle Beach Fee
Owner any membership interests or other securities or receive or exercise any
benefits or rights similar to any rights enjoyed by or inuring to the holder of
such securities of the Myrtle Beach Fee Owner; or (iii) contracts, commitments,
agreements, understandings or arrangements (whether written or oral) of any kind
relating to the issuance, conversion, registration, voting, sale repurchase or
transfer of any membership interests or other securities of the Myrtle Beach Fee
Owner, convertible or exchangeable securities, or any subscriptions, options,
warrants or similar rights of the Myrtle Beach Fee Owner or granting to any
Person any right to participate in the equity or income of the Myrtle Beach Fee
Owner or to participate in or direct the election of any director or officer of
the Myrtle Beach Fee Owner or the manner in which any membership interests or
other securities of the Myrtle Beach Fee Owner are voted. There are no
membership interests or other securities of the Myrtle Beach Fee Owner reserved
for issuance for any purpose, or any agreement with respect to the
transferability, purchase or redemption of any membership interests or other
securities of the Myrtle Beach Fee Owner. The Myrtle Beach Fee Owner has not
issued any membership interests or other securities in violation of any
preemptive or similar rights. The Myrtle Beach Fee Owner does not, and has not
since its formation, directly or indirectly (i) owned any subsidiaries, or (ii)
held any equity or equity-linked interest in any Person.
(e)    The Yardley Seller owns 100% of the issued and outstanding membership or
equity interests of the Yardley Fee Owner, free and clear of any Liens other
than Permitted Liens. With respect to the Yardley Fee Owner, there are no
outstanding: (i) securities convertible into or exchangeable for any membership
interests or other securities of the Yardley Fee Owner; (ii) offers,
subscriptions, options, “phantom” stock rights, stock appreciation rights,
stock-based performance units, warrants, calls, commitments, preemptive rights
or other rights of any kind (absolute, contingent or otherwise, including under
employee benefit arrangements) entitling any Person to acquire or otherwise
receive from the Yardley Fee Owner any membership interests or other securities
or receive or exercise any benefits or rights similar to any rights enjoyed by
or inuring to the holder of such securities of the Yardley Fee Owner; or (iii)
contracts, commitments, agreements, understandings or arrangements (whether
written or oral) of any kind relating to the issuance, conversion, registration,
voting, sale repurchase or transfer of any membership interests or other
securities of Yardley Fee Owner, convertible or exchangeable securities, or any
subscriptions, options, warrants or similar rights of the Yardley Owner or
granting to any Person any right to participate in the equity or income of the
Yardley Fee Owner or to participate in or direct the election of any director or
officer of the Yardley Fee Owner or the manner in which any membership interests
or other securities of the Yardley Fee Owner are voted. There are no membership
interests or other securities of the Yardley Fee Owner reserved for issuance for
any purpose, or any agreement with respect to the transferability, purchase or
redemption of any membership interests or other securities of the Yardley Fee
Owner. The Yardley Fee Owner has not issued any membership interests or other
securities in violation of any preemptive or similar rights. The Yardley Fee
Owner does not, and has not since its formation, directly or indirectly (i)
owned any subsidiaries, or (ii) held any equity or equity-linked interest in any
Person.

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Section 2.3    Permits; Licenses. Schedule 2.3 sets forth all material permits,
licenses and other authorizations issued and required by any Governmental
Authority in connection with the ownership or operation of any Facility as
conducted by the Sellers in accordance with past practice (each a “License”,
collectively, the “Licenses”). Except as disclosed on Schedule 2.3, each License
is in good standing and the Sellers have not received written notice that the
Sellers are in violation of any License or any restriction, rule or regulation
affecting possession and use thereof that would, individually or in the
aggregate, have a Facility Material Adverse Effect.
Section 2.4    Governmental Approvals. Except as set forth in Schedule 2.4, to
Sellers’ Knowledge (a) no Seller is required to submit any notice, report or
other filing with any Governmental Authority in connection with its execution or
delivery of this Agreement or any Seller Documents or the consummation of the
transactions contemplated hereby, and (b) no consent, approval or authorization
of any Governmental Authority is required to be obtained by any Seller in
connection with the execution, delivery and performance of this Agreement.
Section 2.5    Financial Statements. The Sellers have provided the following
financial statements with respect to each Facility in the Data Site at least
five (5) days prior to the Effective Date: (i) balance sheets of each Facility
as of December 31, 2011, December 31, 2012 and September 30, 2013, and (ii)
income statements of each Facility for the twelve (12) month periods ended
December 31, 2011 and December 31, 2012 and for the nine (9) month period ended
September 30, 2013 ((i) and (ii) collectively, the “Facility Balance Sheets and
Income Statements”). The Facility Balance Sheets and Income Statements are true,
correct and complete in all material respects and present fairly the financial
condition of each Facility as of their respective dates or for the periods
indicated.
Section 2.6    Absence of Certain Changes, Events and Conditions. Since
September 30, 2013, there has not been any event, occurrence or development that
has had, or could reasonably be expected to have, individually or in the
aggregate, a Seller Material Adverse Effect.
Section 2.7    Title to Personal Property. Seller has good and valid title to,
or interest in, all of the Personal Property owned by the Sellers.
Section 2.8    Condition and Sufficiency of Assets. The Assets, when taken
together with the Ancillary Assets, are sufficient for the continued conduct of
the Business after the Closing in substantially the same manner as conducted
prior to the Closing and constitute, when taken together with the Ancillary
Assets, all of the rights, property and assets necessary to conduct the Business
as currently conducted.
Section 2.9    Real Property. (a) Exhibit A sets forth the complete and accurate
legal description of each parcel of Seller Real Property. Schedule 2.9 sets
forth an accurate street address of each parcel of Seller Real Property. The
Seller Real Property is all of the real property used in or necessary for the
conduct of the Business as currently conducted. With respect to each parcel of
the Sellers Real Property, the Sellers have good, valid and insurable fee simple
title, free and clear of all Liens, except Permitted Liens.
(b)    To Sellers’ Knowledge, Sellers have not received any written notice of
(i) violations that remain pending or unresolved of building codes and/or zoning
ordinances or other

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governmental or regulatory laws affecting the Seller Real Property, (ii)
existing, pending or threatened condemnation proceedings affecting the Seller
Real Property, (iii) existing, pending or threatened zoning, building code or
other moratorium proceedings, or similar matters, or (iv) any violation that
remains pending or unresolved of any Applicable Law affecting the Seller Real
Property, in each case, which could reasonably be expected to have, individually
or in the aggregate, a Facility Material Adverse Effect.
Section 2.10    Compliance with Laws. The Sellers have operated the Business and
have maintained the Assets in compliance with all Applicable Laws in all
material respects.
Section 2.11    Hazardous Substances. For purposes of this Agreement,
“Environmental Laws” means the Resource Conservation and Recovery Act (RCRA), 42
U.S.C. Section 6901 et seq., the Comprehensive Environmental Response,
Compensation and Liability Act (CERCLA), 42 U.S.C. Sections 9601 et seq., the
Clean Water Act, 33 U.S.C. Section 1251 et seq., the Toxic Substances Control
Act, the Clean Air Act, 42 U.S.C. Section 7401 et seq., the Safe Drinking Water
Act 42 U.S.C. Section 300(f) et seq. and all other applicable state, county,
municipal, administrative or other environmental, hazardous waste or substance,
ordinances, rules, regulations, judgments, and orders relating or pertaining to
(A) the protection, preservation or reclamation of the environment or natural
resources or (B) the management, release and threatened release of Hazardous
Substances. For purposes of this Agreement, “Hazardous Substance” shall mean any
and all substances, wastes, materials, pollutants, contaminants, compounds,
chemicals or elements which are defined or classified as a “hazardous
substance,” “hazardous material,” “toxic substance,” “hazardous waste,”
“pollutant,” “contaminant” or words of similar import under any Environmental
Law, including all dibenzodioxins and dibenzofurans, polychlorinated biphenyls
(PCBs), petroleum hydrocarbon, including crude oil or any derivative thereof,
asbestos-containing materials in any form, and radon gas.
(a)    Except as would not reasonably be expected to result in a Facility
Material Adverse Effect or except as disclosed on Schedule 2.11(a) or in any
Phase I environmental report made available to the Purchaser on the Data Site:
(i) to Sellers’ Knowledge the operations of Sellers with respect to the
Facilities and the other Assets are and have been in compliance with all
material applicable Environmental Laws; and (ii) the Sellers have not received
from any Person, with respect to the Seller Real Property, any (A) written
notice or claim alleging liability or a breach of any Environmental Laws or (B)
written request for information pursuant to Environmental Law, which, in each
case, either remains pending or unresolved, or is the source of ongoing
obligations or requirements as of the Closing Date.
(b)    Except as would not reasonably be expected to result in a Facility
Material Adverse Effect or except as disclosed on Schedule 2.11(b) or in any
Phase I environmental report made available to Purchaser on the Data Site, to
Sellers’ Knowledge, Sellers do not currently store or use any Hazardous
Substances at any Seller Real Property, except for Hazardous Substances used in
the ordinary course of business at any Facility, including cleaning fluids,
insecticides, medicines and similar items (the “Common Products”), which Common
Products have been used, transported, stored and disposed of by the Sellers in
compliance, in all material respects, with all applicable Environmental Laws.

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(c)    Except as would not reasonably be expected to result in a Facility
Material Adverse Effect or except as disclosed on Schedule 2.11(c) or in any
Phase I environmental report made available to the Sellers on the Data Site, to
Sellers’ Knowledge none of the Seller Real Property is listed on, or has been
proposed for listing on, the National Priorities List or the CERCLIS pursuant to
the Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. § 9601, et. seq. or any similar state list.
(d)    Except as would not reasonably be expected to result in a Facility
Material Adverse Effect or except as disclosed on Schedule 2.11(d) or in any
Phase I environmental report made available to the Purchaser on the Data Site,
to Sellers’ Knowledge there has been no release of Hazardous Substances in
contravention of Environmental Law with respect to the Seller Real Property, and
the Sellers have not received any written notice of any such release which would
reasonably be expected to result in a claim under Environmental Laws or a
violation of Environmental Laws or a violation of the term of any License issued
to Sellers pursuant to applicable Environmental Laws.
(e)    The Sellers have, prior to the Effective Date, made available to the
Purchaser on the Data Site for each Facility a copy of the most recent Phase I
environmental reports, none of which are dated prior to the date which is six
(6) months prior to the Effective Date, other than the report for the Bay Park
Facility, which is dated June 20, 2012 and for the Silver Arrow Estates
Facility, which is dated October 23, 2012.
Section 2.12    No Litigation. As of the Effective Date, and except as set forth
in Schedule 2.12, there are no actions, suits, claims, arbitrations,
governmental investigations or other legal or administrative proceedings (“Legal
Proceedings”), or any orders, decrees or judgments in progress or pending in any
state or federal court, or, any other local court or other tribunal, or, to
Sellers’ Knowledge, threatened against any Seller relating to the Assets or the
Seller Real Property which could reasonably be expected to have a Seller
Material Adverse Effect.
Section 2.13    Employees. None of the Sellers has any employees. Seller is not
a party to any collective bargaining agreement, and no collective bargaining
agreement is currently being negotiated by the Sellers. To the Sellers’
Knowledge, no petitions for representation are currently filed against any
Facility nor have any demands been made for recognition.
Section 2.14    ERISA. Seller does not hold any “plan assets” within the meaning
of Section 3(42) of the Employee Retirement Income Security Act of 1974, as
amended.
Section 2.15    Insurance. Schedule 2.15 contains a description of all insurance
policies insuring the Facilities, as of the Effective Date. All such policies
are in full force and effect, and to Sellers’ Knowledge, have been issued by
licensed insurers, all premiums with respect thereto covering all periods up to
and including the Closing Date have been paid, and none of the Sellers has
received written notice of cancellation or termination with respect to any such
policies that remains pending or unresolved. The insurance policies described in
Schedule 2.15 are not being assigned or transferred to the Purchaser.

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Section 2.16    Brokers and Finders. Except as set forth in Schedule 2.16, no
Seller has employed or engaged any investment banker, broker or finder in
connection with the transactions contemplated by this Agreement who might be
entitled to any fee or any commission in connection with or upon consummation of
the Closing.
Section 2.17    OFAC. Neither the Sellers nor, to the Sellers’ Knowledge, any of
their respective direct equity owners nor their respective officers or
directors, is a person or entity with whom U.S. persons or entities are
restricted from doing business under regulations of the Office of Foreign Asset
Control of the Department of the Treasury (“OFAC”), (including those named on
OFAC’s Specially Designated and Blocked Persons List) or under any similar
statute, executive order (including the September 24, 2001, Executive Order
Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten
to Commit, or Support Terrorism) or other similar governmental regulations.
THE PURCHASER HEREBY ACKNOWLEDGES AND AGREES THAT, EXCEPT WITH RESPECT TO THE
SELLER REPRESENTATIONS, THE ASSETS ARE HEREBY SOLD, AND THE PURCHASER SHALL TAKE
AND ACCEPT TITLE TO AND POSSESSION OF THE ASSETS ON THE CLOSING DATE, “AS IS,
WHERE IS, WITH ALL FAULTS,” WITH NO RIGHT OF SET-OFF, CONTRIBUTION, COST
RECOVERY OR REDUCTION IN THE PURCHASE PRICE, AND THAT, EXCEPT FOR THE SELLER
REPRESENTATIONS, SUCH SALE SHALL BE WITHOUT REPRESENTATION OR WARRANTY OF ANY
KIND OR NATURE WHATSOEVER BY THE SELLERS, WHETHER EXPRESS, IMPLIED, STATUTORY,
OR OTHERWISE, INCLUDING, WARRANTY OF INCOME POTENTIAL, OPERATING EXPENSES, USES,
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND EACH SELLER DOES HEREBY
DISCLAIM AND RENOUNCE ANY SUCH REPRESENTATION OR WARRANTY. THE PURCHASER
SPECIFICALLY ACKNOWLEDGES THAT, EXCEPT FOR THE SELLER REPRESENTATIONS, THE
PURCHASER IS NOT RELYING ON ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND OR
NATURE WHATSOEVER, WHETHER ORAL OR WRITTEN, EXPRESS, IMPLIED, STATUTORY, OR
OTHERWISE, FROM SELLER AS TO ANY MATTERS CONCERNING THE ASSETS. THE PURCHASER
FURTHER ACKNOWLEDGES AND AGREES THAT (A) EXCEPT FOR THE SELLER REPRESENTATIONS,
THE PURCHASER IS RELYING SOLELY UPON THEIR OWN INSPECTION OF THE ASSETS AND NOT
UPON ANY REPRESENTATIONS OR WARRANTIES MADE TO THEM BY ANY PERSON WHOMSOEVER,
(B) EXCEPT AS PROVIDED HEREIN, ANY REPORTS, REPAIRS, OR WORK REQUIRED BY THE
PURCHASER OR PROVIDED BY THE SELLERS TO THE PURCHASER IN CONNECTION WITH THE
TRANSACTION CONTEMPLATED BY THIS AGREEMENT ARE TO BE THE SOLE RESPONSIBILITY OF
THE PURCHASER AND (C) EXCEPT AS PROVIDED HEREIN, THERE IS NO OBLIGATION ON THE
PART OF THE SELLERS TO MAKE ANY CHANGES, ALTERATIONS, OR REPAIRS TO THE ASSETS.

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ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Sellers, as of the Effective Date,
as follows:
Section 3.1    Organization; Etc. The Purchaser is (i) duly organized and
validly existing and in good standing under the laws of the jurisdiction in
which it is formed with all requisite power and authority to carry on its
business as currently being conducted and to own or lease and operate the assets
it owns or leases as and in the places now owned, leased or operated; and (ii)
the Purchaser is duly qualified or licensed to do business and is in good
standing in the jurisdiction in which the nature of its business or the
ownership, construction, management or operation of its assets makes such
qualification or licensing necessary, other than in such jurisdictions where the
failure to be so qualified or licensed, individually or in the aggregate, has
not resulted in, and would not reasonably be expected to result in, a Purchaser
Material Adverse Effect.
Section 3.2    Authority, Binding Effect.
(a)    The Purchaser has, and at the Closing the Purchaser will have, the
requisite limited liability company right, power and authority, to execute,
deliver and perform its obligations with respect to this Agreement and the
Purchaser Documents. The execution, delivery, performance and consummation of
this Agreement, the Purchaser Documents and all of the transactions contemplated
herein and therein have been duly authorized and approved by all necessary
limited liability action of the Purchaser.
(b)    This Agreement and the Purchaser Documents, upon due execution and
delivery by the Purchaser, will constitute the legal, valid, and binding
obligation of the Purchaser, enforceable against the Purchaser in accordance
with its terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors’
rights generally or by application of equitable principles.
(c)    The execution, delivery and performance of this Agreement and the
Purchaser Documents by the Purchaser does not and will not: (i) conflict with or
result in any breach or violation of the provisions of, or constitute a default
under its organizational documents, (ii) violate any mortgage, deed of trust,
license, permit, lease, indenture, contract, agreement, obligation, commitment,
arrangement, understanding, instrument or other agreement or instrument, whether
oral or written, to which the Purchaser is a party, or by which it or any of its
assets are bound, or result in the termination of any such instrument or
termination of any provisions in such instrument in each case that would,
individually or in the aggregate, have a Purchaser Material Adverse Effect, or
(ii) violate any Applicable Law.
Section 3.3    No Litigation. As of the Effective Date, the Purchaser is not a
party to, or defending or subject to, any Legal Proceeding, nor, to Purchaser’s
Knowledge, is any such Legal Proceeding threatened in each case, which would
have a Purchaser Material Adverse Effect on the Purchaser’s ability to execute,
deliver and perform this Agreement, the Purchaser Documents and any other
documents and transaction contemplated hereby.

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Section 3.4    Governmental Approvals. To the Purchaser’s Knowledge, the
Purchaser is not required to submit any notice, report or other filing with any
Governmental Authority in connection with its execution or delivery of this
Agreement or any Purchaser Document or the consummation of the transactions
contemplated hereby and no consent, approval or authorization of any
Governmental Authority is required to be obtained by the Purchaser in connection
with the execution, delivery and performance of this Agreement.
Section 3.5    Brokers and Finders. Except as set forth in Section 3.5, the
Purchaser has not employed or engaged any investment banker, broker or finder in
connection with the transactions contemplated by this Agreement who might be
entitled to any fee or any commission in connection with or upon consummation of
the Closing.
Section 3.6    Available Funds. Upon the Closing, Purchaser will have
immediately available to it, sufficient funds to pay the Purchase Price and all
costs and expenses as required by this Agreement.
Notwithstanding anything to the contrary contained herein, any reference in this
Agreement to “Purchaser’s Knowledge” or words of similar import shall be deemed
to refer exclusively to matters within the actual knowledge of Justin Hutchens,
Kevin Pascoe, Kristi Gaines (“Purchaser Knowledge Individuals”), which
individuals are the individuals in Purchaser’s organization who are most
knowledgeable of the matters set forth herein, but without any obligation to
investigate or make inquiries of other Persons with respect to any of the
representations and warranties contained in this Agreement. Without limiting the
foregoing, Sellers acknowledges that the Purchaser Knowledge Individuals have
not performed and are not obligated to perform any investigation or review of
any files or other information in the possession of the Purchaser, or to make
any inquiry of any persons, or to take any other actions in connection with the
representations and warranties of the Purchaser set forth in this Agreement
other than as required herein. Neither the actual, present, conscious knowledge
of any other individual or entity, nor the constructive knowledge of the
Purchaser Knowledge Individuals or of any other individual or entity, shall be
imputed to the Purchaser Knowledge Individuals. Notwithstanding anything to the
contrary contained in this Agreement, the Purchaser’s Knowledge shall be deemed
to include the information provided on the Disclosure Schedules and the Phase I
environmental reports and property condition reports for the Seller Real
Property posted to the Data Site on or prior to the Effective Date.
ARTICLE IV

COVENANTS OF THE SELLERS
From and after the Effective Date and, subject to earlier termination of this
Agreement, until the Closing, except as otherwise consented to or approved by
the Purchaser in writing, the Sellers covenant and agree as follows:
Section 4.1    Interim Operating Covenants. Except as expressly contemplated by
this Agreement, the Business shall be conducted in the ordinary course of
business consistent with past practice, and the Sellers shall use commercially
reasonable efforts to (a) maintain the Facilities, or cause the Facilities to be
maintained, in substantially their condition as of the

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Effective Date, reasonable wear and tear, and casualty and condemnation,
excepted; (b) comply in all material respects with all Applicable Laws; and (c)
keep in full force and effect insurance policies with substantially the same
terms as existing policies.
Section 4.2    Liens. The Sellers shall not create or permit to become effective
any Liens upon the Assets, other than the Permitted Liens and any other Lien
arising in the ordinary course of business and consistent with past practice so
long as such other Lien is removed, satisfied or otherwise bonded over at or
prior to the Closing, such that such Lien is not included as an exception to a
Title Policy.
Section 4.3    Inspection Rights.
(a)    The Sellers shall, upon not less than forty-eight (48) hours prior notice
from the Purchaser, at reasonable business hours and subject to the rights of
residents under the residency agreements, the Leases and all Applicable Laws,
afford to the Purchaser reasonable access, subject to the Purchaser’s obligation
to comply with this Agreement, (i) to the Seller Real Property in order to
examine and inspect such Seller Real Property, including the Books and Records
and (ii) to meet with the managers at the Facilities; provided, however, such
access shall not include the right to meet with any residents, any tenants or
any other employees of the Manager; provided, further, however, Sellers and/or
their agents shall be given the opportunity and permitted to supervise all
meetings, calls or other contact or communications with the Sellers’ personnel
including but not limited to meetings with the managers at the Facilities.
(b)    The Purchaser shall use commercially reasonable efforts to not cause
damage, loss, cost or expense to the Seller Real Property, the Facilities, the
Sellers, any residents, any tenants, the Manager and its employees or any
invitee at any Facility (collectively, the “Section 4.3 Indemnified Parties”).
To the extent of any damage caused by the Purchaser or any agent, representative
or contractor or other Person entering onto the Seller Real Property on behalf
of, or at the direction of, the Purchaser (each a “Purchaser Representative”) to
the Seller Real Property, any Facility or assets located thereat, the Purchaser
shall promptly restore such property to its condition immediately preceding such
inspections and examinations and shall keep all such property free and clear of
any mechanic’s liens or materialmen’s liens arising as a result such inspections
and investigations (and promptly cause, at the Purchaser’s sole cost and
expense, the removal of any such mechanic’s liens or materialmen’s liens). The
Purchaser shall indemnify, defend, and hold harmless for, from, and against any
and all claims, liabilities costs and/or expenses incurred by any such Section
4.3 Indemnified Party in connection with, or as a result of, the entry of any
Purchaser Representative onto the Seller Real Property or resulting from the
action or inaction of any of the Purchaser Representatives while at the Seller
Real Property prior to the Closing Date including, costs and expenses arising or
resulting from (i) loss, injury to or death of any Purchaser Representative or
any Section 4.3 Indemnified Party, as applicable (waiving all limitations under
workers’ compensation), and (ii) any loss, damage, cost and/or expense to or
destruction of any property owned by any Section 4.3 Indemnified Party
(including claims or liabilities for loss of use of any property).
(c)    The obligations of the Purchaser under this Section 4.3 shall survive the
Closing or earlier termination of this Agreement.

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Section 4.4    Title Insurance and Surveys.
(a)    Prior to the Effective Date, the Sellers have provided to the Purchaser
(i) title commitments for each Seller Real Property (collectively, the “Initial
Title Commitments”), issued by First American Title Insurance Company (the
“Title Company”), together with copies of all recorded exceptions to title
referred to therein and (ii) a survey of each Seller Real Property
(collectively, the “Initial Surveys”). All matters contained in the Initial
Title Commitments and Initial Surveys are hereinafter referred to as the
“Existing Title Matters”. On or before the expiration of the Inspection Period,
the Purchaser shall have the right to object, in writing and in its reasonable
discretion, to an Existing Title Matter that (i) has a material adverse effect
on the current use and value of a Facility or (ii) may be removed or cured by
the payment of a readily ascertainable amount, by delivering a written notice to
Sellers specifying any Existing Title Matter to which the Purchaser objects
(such notice being referred to herein as the “Existing Title Objection Notice”).
The failure of the Purchaser to object to any Existing Title Matter within said
period shall be deemed a waiver by the Purchaser of its right to object to such
Existing Title Matter and, in such event, such Existing Title Matter shall be
deemed approved by the Purchaser and shall be a Permitted Lien.
(b)    The Sellers acknowledge that certain of the Initial Surveys provided in
the Data Site were completed more than ninety (90) days prior to the Effective
Date (the “Outdated Initial Surveys”). On or before the expiration of the
Inspection Period, Seller will provide in the Data Site updates (or new surveys,
as the case may be) to the Outdated Initial Surveys that will have been prepared
recently enough to reasonably satisfy the Purchaser and the Title Company. In
addition, prior to the Closing Date, the Purchaser shall have the right to order
updates to the Initial Title Commitments and/or Initial Surveys, and in the
event that any such update reveals any new matter not previously shown or
disclosed on the Initial Title Commitments or Initial Surveys which (i) would
reasonably be expected to have a material adverse effect on the current use and
value of a Facility or (ii) may be removed or cured by the payment of a readily
ascertainable amount (each, a “New Title Matter”), the Purchaser shall have the
right to object, in writing and in its reasonable discretion, to such New Title
Matter by the earlier of (i) the Closing Date and (ii) the date which is three
(3) Business Days after receipt of such update, as applicable, with any such
objection notice specifying any New Title Matter to which the Purchaser objects
(such notice being referred to herein as the “New Title Objection Notice”) (the
Existing Title Objection Notice and the New Title Objection Notice are
hereinafter collectively referred to as the “Title Objection Notice”). The
failure of the Purchaser to object to any New Title Matter within said period
shall be deemed a waiver by the Purchaser of its right to object to such New
Title Matter and, in such event, such New Title Matter shall be deemed approved
by the Purchaser and shall be a Permitted Lien. Notwithstanding the foregoing,
the Purchaser shall not have the right to disapprove any of the following, all
of which (together with all other matters deemed approved by the Purchaser
pursuant to terms hereof) shall be deemed to be “Permitted Liens” hereunder: (A)
matters created or consented to in a separate written consent by the Purchaser,
(B) the Assumed Liabilities, (C) all Liens for taxes, assessments, water rates,
water meter charges, water frontage charges and sewer taxes, rents and charges,
if any, provided that such items are not due and payable. If the Purchaser
delivers a Title Objection Notice to the Sellers within either of the
above-described periods, the Sellers shall have three (3) Business Days after
receipt of the Title Objection Notice (such period is the “Seller Response
Period”) in which to send the Purchaser a written notice (the “Title Objection
Response Notice”)

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informing the Purchaser of which Existing or New Title Matters (collectively the
“Title Matters”), as applicable, the Sellers will and will not agree to cure
prior to the Closing Date (as the same may be extended as provided herein). If
the Sellers fail to deliver the Title Objection Response Notice with respect to
any Title Matters to the Purchaser on or before the expiration of the Seller
Response Period, the Sellers shall be deemed to have refused to cure such Title
Matter. The Closing Date may be extended by the Sellers to accommodate the
giving of notices and the cure periods contemplated herein, provided that the
Closing Date shall not be extended by the Sellers for a period beyond the date
which is ten (10) days after the last Title Objection Notice is delivered by
Purchaser, for the purposes of curing any Title Matter to which the Purchaser
has objected and which the Sellers have informed the Purchaser they have agreed
to cure and, in such event, the Closing shall occur upon the curing of such
Title Matters. If the Sellers are unable after using commercially reasonable
efforts (considered in the context of the allotted time) during such period to
cure any such Title Matter, the Sellers shall be deemed to have refused to cure
such Title Matter. If the Sellers refuse (or are deemed to have refused) to cure
any Title Matter set forth in the Title Objection Notice, the Purchaser shall
have three (3) Business Days after receipt of Sellers’ Title Objection Response
Notice (or, if Seller has not responded to the Title Objection Notice, then
within three (3) Business Days following the expiration of the Seller Response
Period) in which to advise the Sellers in writing of the Purchaser’s election
(x) to waive its objection to the Title Matters that Sellers either refused to
cure, or could not cure, and to proceed to the Closing or (y) to terminate this
Agreement, in which event the Parties shall have no further obligations or
liabilities under this Agreement other than the Surviving Obligations, which,
solely to the extent this Agreement was terminated due to Purchaser objecting to
Title Matters consented to or created by the Sellers, shall include the
obligation of the Sellers to reimburse the Purchaser in the amount equal to the
lesser of (i) Purchaser Expenses and (ii) the Reimbursement Cap in accordance
with Section 10.1(d) hereof. If the Purchaser does not terminate this Agreement
pursuant to the preceding sentence, then all Title Matters appearing in the
Title Objection Notice that Sellers either did not agree to cure (as set forth
in the Title Objection Response Notice) or could not cure by Closing shall be
deemed Permitted Liens. The Purchaser agrees that the Sellers may cure any
objectionable matter by causing the Title Company to remove the same as an
exception in the applicable Title Policy or to affirmatively insure over such
matter.
(c)    The title insurance policies issued to the Purchaser as of the Closing
shall be dated as of the date of Closing, insure the fee simple interest of the
Purchaser in the Seller Real Property in the form of the Pro Forma 2006 ALTA
Title Policies, subject to only the Permitted Liens (each a “Title Policy” and
collectively the “Title Policies”) and cover the “gap period”. The Sellers and
the Purchaser shall execute customary affidavits, gap indemnities and other
instruments, in forms reasonably agreed by the party(ies) thereto, as reasonably
requested by the Title Company to cause the Title Company to issue the Title
Policies.
Section 4.5    Further Assurances. In addition to the acts and deeds recited
herein and contemplated to be performed, executed or delivered by the Sellers,
the Sellers hereby agree to perform, execute and deliver, or cause to be
performed, executed and delivered, on the Closing Date or thereafter any and all
such further acts, deeds and assurances the Purchaser may reasonably require in
order to consummate fully the transactions contemplated hereunder The obligation
of the Parties under this Section 4.5 shall survive the Closing.

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Section 4.6    8-K Requirements.
(a)    For a period from the date hereof until three (3) years after Closing,
the Sellers shall from time to time upon Purchaser’s request, make the Facility
Balance Sheets and Income Statements, Financial Statements, any underlying
financial data associated therewith, and all other books, records and files
relating to any period prior to the Closing (whether in paper or electronic
format) available to the Purchaser for inspection, copying and audit by
Purchaser and Purchaser’s designated accountants, at the Purchaser’s expense.
Provided that Purchaser agrees to bear any associated third-party expense (i.e.
excluding expenses of Sellers’ personnel and other overhead expenses), the
Sellers shall provide the Purchaser with copies of, or access to, such factual
information as may be reasonably requested by the Purchaser, and in the
possession or under the direct or indirect control of the Sellers, to enable the
Purchaser or an affiliate (or their respective successors) to (x) include such
information in registration statements, offering memoranda or prospectuses, or
similar disclosure documents in connection with syndications, private placements
or public offerings of equity or debt securities or interests of the Purchaser
or any of its affiliates, and (y) comply with all reporting and disclosure
requirements of Purchaser or any of its affiliates under applicable federal and
state laws and the rules and regulations promulgated thereunder, as such
requirements are interpreted in good faith by Purchaser or any such affiliate.
(b)    Without limiting the foregoing, the Purchaser or its designated
independent or other accountants may audit the Financial Statements and any
other financial statements of the Sellers, and the Sellers shall supply such
documentation in their possession or under their direct or indirect control as
the Purchaser or its accountants may reasonably request in order to complete
such audit, and the Sellers shall execute the form of audit and representation
letter reasonably required by such accountants, and take such other actions as
shall be reasonably necessary, in order to (i) permit such accountants to
provide an unqualified audit opinion in accordance with generally accepted
accounting principles with respect to such audit, (ii) obtain the consent of
such accountants to the inclusion of such opinion in one or more reports or
registration statements that may be filed by Purchaser or an affiliate with the
Securities and Exchange Commission, or in any offering memorandum or similar
disclosure documents in connection with any syndications or private placements,
(iii) cause such accounting firm to issue one or more customary comfort letters
with respect to financial information of the Sellers, and (iv) cause such
accounting firm to perform a review of any interim financial periods in
accordance with AU 722 in order to be able to provide customary comfort with
respect to such periods. The Sellers shall otherwise reasonably cooperate with
the Purchaser and its affiliates, accountants and auditors in connection with
any public or private offering of equity or debt securities which, in
Purchaser’s (or such affiliate’s) good faith judgment, may require disclosure of
information relating to Seller Real Property or the Business for any period
prior to the Closing. In this connection, Sellers shall cause to be made
reasonably available to the Purchaser and its affiliates, accountants and
auditors such personnel of Sellers or of any affiliate of Sellers (including,
without limitation, management personnel employed in connection with any of the
Seller Real Property) to address questions relating to the financial statements,
financial data, and/or the ownership, operation and/or financial performance of
the Seller Real Property and the Business for any period prior to the Closing.

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(c)    In addition, from the date hereof in connection with any financing sought
to be obtained by the Purchaser for its acquisition of Seller Real Property at
the Closing, the Sellers shall reasonably cooperate (and shall cause associated
management personnel reasonably to cooperate) to expedite and assist with the
consummation such financing, provided that Purchaser bears any associated
third-party expense. Without limitation, such cooperation shall include, upon
the Purchaser’s request (with the Purchaser bearing any associated third-party
expenses): establishing special purpose entities and associated structuring
changes, implementing documentation and other changes to facilitate “sale”
treatment of the Purchaser’s acquisition of the Assets for accounting and/or
“true sale” legal purposes, implementing changes in accounts as the lender may
reasonably request, and making appropriate personnel reasonably available to
address questions and issues. The obligations of the Parties under this Section
4.6 shall survive the Closing.
Section 4.7    Phase I Updates. The Sellers shall provide an updated Phase I
environmental report for the Bay Park Facility and the Silver Arrow Estates
Facility on the Data Site (the “Updated Report”) on or prior to Closing. If the
Updated Report recommends that the Sellers take any further action with respect
to any environmental matter not already disclosed on the prior Phase I
environmental report that was provided on the Data Site on or prior to the
Effective Date, the Sellers, as applicable, shall either (i) take such
recommended action at the Sellers’ sole cost and expense, or (ii) cause the
Master Tenant under the Master Lease, or the applicable Subtenant, to take such
recommended action at Master Tenant’s or such Subtenant’s sole cost and expense;
provided, however, that any costs or expenses incurred by tenant or such
subtenant to take such recommended action shall not be counted towards the
satisfaction of the obligation of Master Tenant to incur capital expenditures
under the Master Lease.
Section 4.8    Myrtle Beach/Yardley Commons. For all purposes of this Agreement,
other than with respect to the Excluded Provisions, all obligations,
representations, warranties and covenants shall apply equally to (1) the Myrtle
Beach Seller except that (i) with respect to actions required to be taken or
refrained from being taken on or prior to the Closing with respect to any other
Assets, Myrtle Beach Seller shall be required to cause the Myrtle Beach Fee
Owner to take, or refrain from taking, such actions with respect to the Myrtle
Beach Facility and any of its other assets which would have comprised Assets had
the Myrtle Beach Fee Owner been a seller hereunder (collectively, the “Myrtle
Beach Fee Owner Assets”), (ii) with respect to representations made with respect
to the Myrtle Beach Facility and the Myrtle Beach Fee Owner Assets, such
representations shall be deemed accurate to the extent the same would have been
true if the same had been made by the Myrtle Beach Fee Owner instead of being
made by the Myrtle Beach Seller, (iii) on or prior to the Closing the Myrtle
Beach Fee Owner shall be required to transfer to the Master Tenant under the
Master Lease all assets of the Myrtle Beach Fee Owner which would have comprised
Ancillary Assets had the Myrtle Beach Fee Owner been a seller hereunder, and
(iv) upon the Closing, the Myrtle Beach Fee Owner shall execute the Master Lease
as one of the landlord’s thereunder and shall lease the Myrtle Beach Facility
and all of the Myrtle Beach Fee Owner Assets to the Master Tenant thereunder and
(2) the Yardley Seller except that (i) with respect to actions required to be
taken or refrained from being taken on or prior to the Closing with respect to
any other Assets, Yardley Seller shall be required to cause the Yardley Fee
Owner to take, or refrain from taking, such actions with respect to the Yardley
Facility and any of its other assets which would have comprised Assets had the
Yardley Fee Owner been a seller hereunder (collectively, the “Yardley Fee Owner
Assets”), (ii) with respect

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to representations made with respect to the Yardley Commons Facility and the
Yardley Fee Owner Assets, such representations shall be deemed accurate to the
extent the same would have been true if the same had been made by the Yardley
Fee Owner instead of being made by the Yardley Seller, (iii) on or prior to the
Closing the Yardley Fee Owner shall be required to transfer to the Master Tenant
under the Master Lease all assets of the Yardley Fee Owner which would have
comprised Ancillary Assets had the Yardley Fee Owner been a seller hereunder,
and (iv) upon the Closing, the Yardley Fee Owner shall execute the Master Lease
as one of the landlord’s thereunder and shall lease the Yardley Facility and all
of the Yardley Fee Owner Assets to the Master Tenant thereunder
“Excluded Provisions” shall mean Sections 1.1(a)(i)-(vi) and Sections
9.2(a)(i)-(iii) hereof. 
ARTICLE V

COVENANTS OF THE PURCHASER
The Purchaser covenants and agrees with the Sellers that:
Section 5.1    Cooperation. After the Closing Date, the Purchaser, at Sellers’
expense, shall cooperate with the Sellers and provide reasonable access to the
Books and Records in the Purchaser’s possession that are required by the Sellers
to respond to any third party litigation, government audit, other audit or any
other reasonable purpose, upon reasonable advance notice. The Sellers shall be
responsible for the cost and expense of copying any records in the Purchaser’s
possession. The obligation of the Parties under this Section 5.1 shall survive
the Closing.
Section 5.2    Further Assurances. In addition to the acts and deeds recited
herein and contemplated to be performed, executed or delivered by the Purchaser,
the Purchaser hereby agrees to perform, execute and deliver, or cause to be
performed, executed and delivered, on the Closing Date or thereafter any and all
such further acts, deeds and assurances Sellers may reasonably require in order
to consummate fully the transactions contemplated hereunder. The obligation of
the Parties under this Section 5.2 shall survive the Closing.
ARTICLE VI

OTHER COVENANTS
Section 6.1    Confidentiality. From and after the Effective Date through the
Closing and thereafter, each Party shall use all information that it obtains
from the other in connection with, or pursuant to, this Agreement and observe
the terms of this Section 6.1. Except as otherwise permitted under this
Agreement, each Party shall use the Confidential Information solely for the
effectuation of the transactions contemplated by this Agreement or for other
purposes consistent with the intent of this Agreement and shall not use any of
such information for any other purpose, including the competitive detriment of
the other Parties.
(a)    Each Party may disclose (i) such information to its respective
Affiliates, counsel, accountants, underwriters, tax advisors and consultants as
necessary to consummate this

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transaction. Additionally, the Parties hereby agree that neither Party shall
make any announcement or press release regarding the nature or existence of this
Agreement without the consent of the other Party; provided that, each Party
shall reasonably cooperate with the other Party in connection with the wording
of any press release or other public announcement. The terms of this Section 6.1
shall not prohibit the use or disclosure of confidential any information
pursuant to court order or which has otherwise become publicly available through
no fault of the recipient party;
(b)    Purchaser (or any of its Affiliates) shall be able to disclose such
Confidential Information as is, in the good faith judgment of Purchaser’s
counsel, accountants or advisors, required or reasonably advisable to be
disclosed because of the operation of law, rule, regulation or legal process, a
governmental agency such as the Internal Revenue Service or Securities and
Exchange Commission, or a stock exchange such as the New York Stock Exchange,
court order or requirement of any Governmental Authority; and
(c)    Purchaser (or any of its Affiliates) shall be able to disclose such
Confidential Information as is, in the good faith judgment of Purchaser’s
counsel, accountants or advisors, required or reasonably advisable to be
disclosed in connection with Purchaser’s (or any of its Affiliates’) quarterly
earnings results or financing activities.
(d)    Notwithstanding anything to the contrary contained herein, prior to the
expiration of the Inspection Period, the terms and existence of this Agreement
shall be strictly confidential subject to any disclosure requirements imposed by
any applicable Governmental Authority and to the extent this Agreement is
terminated at the expiration of the Inspection Period, its existence and terms
shall remain strictly confidential subject to any disclosure requirements
imposed by any applicable Governmental Authority. This Section 6.1(d) shall
survive termination of this Agreement.
If this Agreement is terminated for any reason prior to Closing, the provisions
of this Section 6.1 shall survive the Closing for a period of twenty-four (24)
months.
Section 6.2    Casualty Event. If between the Effective Date and the Closing a
Casualty Event shall occur with respect to any one or more Facilities, the
Sellers shall be required to provide the Purchaser with prompt written notice of
such occurrence and the Purchaser or the Sellers may elect, within ten (10)
Business Days of receipt of such notice, to terminate this Agreement, in which
event the Parties shall have no further obligations or liabilities under this
Agreement. If between the Effective Date and the Closing (i) a Casualty Event
shall occur with respect to any one or more Facilities and neither the Purchaser
nor the Sellers have elected to terminate this Agreement in accordance with this
Section 6.2 and not to proceed to Closing or (ii) a casualty has occurred with
respect to one or more Facilities that does not constitute a Casualty Event
(provided the Sellers shall be required to provide the Purchaser with prompt
written notice of such occurrence in any event), all insurance proceeds and/or
awards attributable to any such casualty shall be assigned to the Purchaser at
Closing and the Sellers shall provide a credit against the Purchase Price in the
amount of any applicable insurance deductible payable or uninsured amount in
connection therewith (and if any casualty is uninsured, the amount of such
uninsured casualty), and Purchaser agrees to make all such amounts immediately
available

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to Master Tenant if, as and when required under the Master Lease, which funds
will be treated as if the Casualty Event or casualty occurred during the term of
the Master Lease.
Section 6.3    Condemnation Event. If, prior to Closing, Sellers receive notice
of any actual or threatened taking in condemnation or by eminent domain (or a
sale in lieu thereof) of all or any portion of any Seller Real Property, Sellers
will notify the Purchaser promptly thereof. Other than with respect to an
Immaterial Taking, any actual or threatened taking or condemnation for any
public or quasi-public purpose or use by any competent authority in appropriate
proceedings or by any right of eminent domain of all or any part of a Seller
Real Property between the Effective Date and the Closing shall, at the
Purchaser’s or the Sellers’ option, cause a termination of this Agreement in
which event the Parties shall have no further obligations or liabilities under
this Agreement with respect to such Facility or Facilities. The election to
terminate provided hereby must be exercised by the Purchaser or the Sellers (and
if not timely exercised, shall be deemed waived by Purchaser or the Sellers) by
written notice to the other party given within ten (10) Business Days following
the Purchaser’s receipt of Sellers’ notice of the condemnation of all or any
portion of any Seller Real Property. If neither party shall elect to terminate
this Agreement or in the event of an Immaterial Taking, Sellers shall assign at
Closing to the Purchaser all net proceeds of any such taking or condemnation to
the extent not yet expended for the restoration of the Seller Real Property by
the Sellers, and the Purchaser agrees to make all such amounts immediately
available to Master Tenant if, as and when required under the Master Lease,
which funds will be treated as if the condemnation or taking occurred during the
term of the Master Lease.
ARTICLE VII

INDEMNIFICATION
Section 7.1    Indemnification by the Sellers.
(a)    Subject to the limitations set forth in this Article VII, each Seller
shall, jointly and severally, indemnify, protect, defend, exculpate and hold the
Purchaser and their Affiliates and their respective partners, directors,
managers, members, shareholders, officers, employees and agents (collectively,
the “Purchaser Indemnified Parties”) harmless from and against, and defend the
Purchaser Indemnified Parties from and reimburse the Purchaser Indemnified
Parties for, any and all actual losses, damages, costs, expenses, liabilities,
obligations and claims of any kind (including costs of investigation, reasonable
attorneys’ fees and other legal costs and expenses, but not including
consequential, punitive, treble or other similar damages, lost profits, special
or indirect damages, including loss of future revenue, profits or income or loss
of business reputation or opportunity related to the breach or alleged breach of
this Agreement) (the “Purchaser Indemnified Losses”) which the Purchaser
Indemnified Parties shall at any time suffer or incur, or become subject to, as
a result of or in connection with:
(i)    Any breach or inaccuracy in any of the representations or warranties
(other than a breach of Section 2.2(d)) as and when made by the Sellers in or
pursuant to this Agreement or any Seller Documents;

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(ii)    Any breach of any covenant, agreement or undertaking made by the Sellers
under this Agreement;
(iii)    Any failure by any Seller to satisfy any Excluded Liability; and
(iv)    Any breach of Section 2.2(d) as and when made by the Sellers in or
pursuant to this Agreement.
(b)    Except as provided otherwise herein, (i) the aggregate liability of the
Sellers for Purchaser Indemnified Losses under Section 7.1(a)(i) and Section
7.1(a)(ii) shall not exceed the amount of Fifteen Million ($15,000,000) in the
aggregate, and (ii) the Sellers shall be liable for Purchaser Indemnified Losses
under Section 7.1(a)(i) or Section 7.1(a)(ii) only if the aggregate Purchaser
Indemnified Losses exceed the amount of Five Hundred Thousand Dollars ($500,000)
(the “Seller Basket”), at which point the Sellers shall be liable for all
Purchaser Indemnified Losses (i.e., from the first dollar of such Purchaser
Indemnified Losses); provided, that Sellers’ obligations hereunder shall be
reduced by the amount of insurance proceeds, tax benefits, indemnification
payments and other third-party payments, actually received in connection with
such claims (net of any costs incurred in recovering such amounts). For the
avoidance of doubt, the limitations set forth in this Section 7.1(b) shall not
apply in the case of any claim made pursuant to Section 7.1(a)(iii).
Section 7.2    Indemnification by the Purchaser.
(a)    The Purchaser shall indemnify, protect, defend, exculpate and hold the
Sellers and their Affiliates and their respective partners, directors, managers,
members, shareholders, officers, employees and agents (collectively, the “Seller
Indemnified Parties”), harmless from and against, and defend the Seller
Indemnified Parties from and reimburse the Seller Indemnified Parties for, any
and all losses, damages, costs, expenses, liabilities, obligations and claims of
any kind (including costs of investigation, reasonable attorneys’ fees and other
legal costs and expenses, but not including consequential, punitive, treble or
other similar damages, lost profits, special or indirect damages, including loss
of future revenue, profits or income or loss of business reputation or
opportunity related to the breach or alleged breach of this Agreement) (the
“Seller Indemnified Losses”) which the Seller Indemnified Parties shall at any
time suffer or incur, or become subject to, as a result of or in connection
with:
(i)    Any breach or inaccuracy of any of the representations or warranties made
by the Purchaser in this Agreement;
(ii)    Any breach of any covenant, agreement or undertaking made by the
Purchaser under this Agreement; and
(iii)    Any failure by Purchaser to satisfy the Assumed Liabilities.
(b)    Except as provided otherwise herein, (i) the aggregate liability of the
Purchaser for Seller Indemnified Losses pursuant to Section 7.2(a)(i) and
Section 7.2(a)(ii) shall not exceed the amount of Fifteen Million Dollars
($15,000,000) in the aggregate and (ii) the Purchaser shall be liable for Seller
Indemnified Losses pursuant to Section 7.2(a)(i) or Section 7.2(a)(ii) only if
the aggregate Seller Indemnified Losses exceed the amount of Five Hundred

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Thousand Dollars ($500,000) (the “Purchaser Basket”), at which point the
Purchaser shall be liable for all Seller Indemnified Losses (i.e., from the
first dollar of such Seller Indemnified Losses); provided, that Purchaser’s
obligations hereunder shall be reduced by the amount of insurance proceeds, tax
benefits, indemnification payments and other third-party payments, actually
received in connection with such claims (net of any costs incurred in recovering
such amounts). For the avoidance of doubt, the limitations set forth in this
Section 7.2(b) shall not apply in the case of any claim made pursuant to Section
7.2(a)(iii).
Section 7.3    Notification of Claims.
(a)    Any and all claims by any Indemnified Party pursuant to this Article VII
must be made in writing prior to 5:00 p.m. (ET) on the last day of the Survival
Period. Failure by any Section VII Indemnified Party to provide written notice
of claim to the Indemnifying Party prior to 5:00 p.m. (ET) on the last day of
the Survival Period shall forever bar such Indemnified Party from making any
claim of any sort, including claims under this Agreement and all other
agreements related to the sale and purchase of the Assets, by statute, at common
law or otherwise, and whether known or unknown, contingent, liquidated or
unliquidated.
(b)    A Party entitled to be indemnified pursuant to Sections 7.1 or 7.2 (the
“Indemnified Party”) shall notify the Party liable for such indemnification (the
“Indemnifying Party”) in writing of any claim or demand which the Indemnified
Party has determined gives rise or will likely give rise to a right of
indemnification under this Agreement, promptly after the Indemnified Party
becomes aware of such claim or demand and has made such determination; provided,
however, that the Indemnified Party’s failure to give such notice to the
Indemnifying Party in a timely fashion shall not result in the loss of the
Indemnified Party’s rights with respect thereto except to the extent any Party
to this Agreement is prejudiced by the delay, and then only to the extent of
such prejudice. Subject to the Indemnifying Party’s right to defend in good
faith third party claims as hereinafter provided, the Indemnifying Party shall
satisfy its obligations under this Article VII within thirty (30) days after the
receipt of written notice thereon from the Indemnified Party.
(c)    If the Indemnified Party shall notify the Indemnifying Party of any claim
or demand pursuant to Section 7.3(a), and if such claim or demand relates to a
claim or demand asserted by a third party against the Indemnified Party which
the Indemnifying Party acknowledges is a claim or demand for which it must
indemnify or hold harmless the Indemnified Party under Sections 7.1 or 7.2, the
Indemnifying Party shall have the right to either (i) pay such claim or demand
or (ii) employ counsel reasonably acceptable to the Indemnifying Party to defend
any such claim or demand asserted against the Indemnified Party. The Indemnified
Party, at its own expense, shall have the right to participate in the defense of
any such claim or demand. The Indemnifying Party shall notify the Indemnified
Party in writing, as promptly as possible (but in any case reasonably in advance
of the due date for the answer or response to a claim) after the date of the
notice of claim given by the Indemnified Party to the Indemnifying Party under
Section 7.3(a) of its election to defend in good faith any such third party
claim or demand. So long as the Indemnifying Party is defending in good faith
any such claim or demand asserted by a third party against the Indemnified
Party, the Indemnified Party shall not settle or compromise such claim or
demand. The Indemnified Party shall make available to counsel engaged by the
Indemnifying Party all records and other materials in the

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Indemnified Party’s possession reasonably requested for its use in contesting
any third party claim or demand. Whether or not the Indemnifying Party elects to
defend any such claim or demand, the Indemnified Party shall have no obligations
to do so. Notwithstanding the foregoing, if the actual or potential defendants
in, or targets of, such third party claim include both the Indemnifying Party
and the Indemnified Party, and the Indemnified Party shall have reasonably
concluded that there are or are reasonably likely to be legal defenses available
to it that are different from or additional to those available to the
Indemnifying Party or that there exists or is reasonably likely to exist a
conflict of interest, in either case that would make it inappropriate in the
reasonable judgment of the Indemnified Party for the same counsel to represent
both the Indemnified Party and the Indemnifying Party, then the Indemnified
Party shall be entitled to participate in the defense of such third party claim,
in which case the Indemnifying Party shall bear the reasonable fees, costs and
expenses of one separate counsel to the Indemnified Party in each jurisdiction
(and shall pay reasonable fees, costs and expenses as incurred); provided that
the Indemnified Party shall use diligent and good faith efforts in such defense.
(d)    An Indemnifying Party may not, without the prior written consent of the
Indemnified Party, settle or compromise any claim against an Indemnified Party
or consent to the entry of any judgment with respect to which indemnification is
being sought hereunder unless such settlement, compromise or consent includes an
unconditional release of the Indemnified Party from all liability arising out of
such claim and does not contain any equitable order, judgment or term which in
any manner affects, restrains or interferes with the business of the Indemnified
Party or any of the Indemnified Party’s Affiliates.
Section 7.4    Survival of Representations.
(a)    Except as otherwise provided in this Section 7.4, (i) all representations
and warranties contained in this Agreement other than those set forth in Section
2.2(d) (and any claims for any breach thereof) or any Seller Document or
Purchaser Document (and any claims for any breach thereof) shall survive the
Closing for a period of eighteen (18) months, and (ii) obligations of the
Parties with respect to Assumed Liabilities, Excluded Liabilities and for
breaches of Section 2.2(d) shall survive indefinitely (the “Survival Period”).
(b)    Unless another date is specified herein, all of the representations and
warranties made by Sellers or the Purchaser in this Agreement are made as of the
Effective Date and (without prejudice to the representations and warranties made
as of the Effective Date) shall be deemed remade as of the Closing pursuant to
the Seller Certificate or the Purchaser Certificate, as applicable. In
connection with the remaking of representations and warranties as of the Closing
(but not as to representations and warranties made as of the Effective Date),
Sellers and the Purchaser shall be permitted to update their representations and
warranties (for all purposes under this Agreement other than for purposes of
satisfying the condition to Closing contained in Article VIII), to accurately
reflect the current state of matters as of the Closing, provided neither Sellers
nor the Purchaser shall be permitted to update their respective representations
and warranties to reflect matters caused by the willful or intentional breach of
this Agreement by the Purchaser or Sellers, as applicable.

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(c)    All covenants and agreements contained in this Agreement (and any claims
for any breach thereof) that by their terms apply or are to be performed in
whole or in part after the Closing shall remain in full force and effect after
the Closing in accordance with their terms (or, if no survival period is stated
therein, then such covenants and agreements shall survive indefinitely). All
covenants and agreements contained in this Agreement that by their terms apply
or are to be performed in their entirety on or prior to the Closing shall
terminate at the Closing.
(d)    Notwithstanding the foregoing, if prior to 5:00 p.m. (ET) on the last day
of the Survival Period, an Indemnifying Party shall have been properly notified
of a claim for indemnity hereunder and such claim shall not have been finally
resolved or disposed of at such date, such claim shall continue to survive and
shall remain a basis for indemnity hereunder until such claim is finally
resolved or disposed of in accordance with the terms in this Agreement.
(e)    Notwithstanding anything to the contrary contained in this Agreement,
Sellers shall have no liability with respect to any of Sellers’ representations
or warranties herein or in any representations or warranties in any Seller
Document if, prior to the Closing, the Purchaser has actual knowledge of any
breach by Sellers of such representation or warranty, or the Purchaser obtains
actual knowledge (from whatever source, as a result of the Purchaser’s due
diligence tests, investigations and inspections of the Assets, or as a result of
written disclosure by Sellers or any of Sellers’ agents, representatives or
employees) that contradicts any of Sellers’ representations or warranties herein
or in any representation or warranty in any Seller Document (and the
representations and warranties of Sellers shall be deemed modified thereby to be
accurate), and the Purchaser nevertheless consummates the transaction
contemplated by this Agreement (in which event any such breach or contradiction
shall be deemed waived by the Purchaser).
Section 7.5    No Punitive Damages. No Indemnified Party shall be entitled to
indemnification for any punitive, consequential, special or indirect damages,
including business interruption, loss of future revenue, profits or income or
loss of business reputation or opportunity related to the breach or alleged
breach of this Agreement.
Section 7.6    Broker’s Fee. Sellers agree to indemnify and hold harmless the
Purchaser from and against any loss, liability, damage, cost or expense
(including court costs and reasonable attorneys’ fees) paid or incurred by the
Purchaser by reason of any claim to any broker’s, finder’s or other fee in
connection with this transaction by any party, claiming by, through or under
Sellers. The Purchaser agrees to indemnify and hold harmless Sellers from and
against any loss, liability, damage or expense (including court costs and
reasonable attorneys’ fees) paid or incurred by Sellers by reason of any claim
to any broker’s, finder’s or other fee in connection with this transaction
claiming by, through or under the Purchaser.
Section 7.7    Treatment of Indemnification Payments. Any payments made pursuant
to the indemnification obligations arising under this Article VII shall be
treated as adjustments to the Purchase Price for all tax purposes.
Section 7.8    Survival. The provisions of this Article VII shall survive the
Closing or earlier termination of this Agreement.

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ARTICLE VIII

CONDITIONS
Section 8.1    Conditions to Each Party’s Obligations. The respective
obligations of each Party to effect the Closing are subject to the satisfaction
or waiver delivered to the other Party of each of the following conditions
precedent:
(a)    There shall not be in force any order, decree, judgment or injunction of
any Governmental Authority enjoining or prohibiting the consummation of the
transactions contemplated by this Agreement or any Seller Document or Purchaser
Document; and
(b)    No Legal Proceeding shall be pending wherein an unfavorable judgment,
order, decree, stipulation or injunction would (i) prevent consummation of the
transactions contemplated by this Agreement, or (ii) cause the transaction
contemplated by this Agreement to be rescinded following consummation.
Section 8.2    Conditions to Obligations of the Purchaser. The obligation of the
Purchaser to effect the Closing is subject to the satisfaction or waiver
delivered to the Sellers of each of the following conditions precedent:
(a)    The representations and warranties of the Sellers set forth in this
Agreement and in the Seller Documents that are qualified as to materiality shall
be true and correct and the representations and warranties of the Sellers that
are not qualified as to materiality shall be true and correct in all material
respects, in each case, as of the Closing as though made as of the Closing;
provided that, to the extent that any such representation or warranty speaks as
of a specified date, it need only be true and correct as of such date.
(b)    Each of the Sellers shall have performed and complied, in all material
respects, with its agreements and covenants (in each case, disregarding any
materiality qualifiers contained therein) required to be performed or complied
with under this Agreement as of or prior to the Closing.
(c)    The Title Company shall, at the Closing, be irrevocably and
unconditionally committed to issue each of the Title Policies upon payment of
the premium and the application of the Purchase Price to the repayment of any
Indebtedness encumbering the Assets , and such Title Policies shall not contain
any exceptions to title other than the standard preprinted exceptions (unless
the Purchaser pays for extended coverage, in which case the standard preprinted
exceptions shall not appear in the Title Policy) and the Permitted Liens.
(d)    Each of the Sellers shall have executed and delivered to the Purchaser or
the Title Company their respective Seller Documents and provided the Purchaser
the items listed in Section 9.2(a).
Section 8.3    Conditions to Obligations of the Sellers. The obligation of each
of the Sellers to effect the Closing is subject to the satisfaction or waiver
delivered to the Purchaser of each of the following conditions precedent:

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(a)    The representations and warranties of the Purchaser set forth in this
Agreement and the Purchaser Documents that are qualified as to materiality shall
be true and correct and the representations and warranties of the Purchaser that
are not qualified as to materiality shall be true and correct in all material
respects, in each case, as of the Closing as though made as of the Closing;
provided that, to the extent that any such representation or warranty speaks as
of a specified date, it need only be true and correct as of such date.
(b)    The Purchaser shall have performed and complied with in all material
respects its agreements and covenants (in each case, disregarding any
materiality qualifiers contained therein) required to be performed or complied
with under this Agreement as of or prior to the Closing.
(c)    The Purchaser shall have executed and delivered their respective
Purchaser Documents and provided the Sellers the items listed in Section 9.2(b).
(d)    The Purchaser shall have wired the balance of the Purchase Price to be
paid at the Closing to the Sellers.
(e)    The Monetary Lien Condition has been, or simultaneously with the Closing
will be, satisfied.
ARTICLE IX

CLOSING
Section 9.1    Possession. Possession of all Facilities and the other Assets
sold hereunder shall be delivered to the Purchaser on the Closing Date.
Section 9.2    Closing Documents.
(a)    The Sellers shall deliver to the Purchaser on the Closing Date, the
following:
(i)    Deeds. Duly executed grant deeds for the Seller Real Property located in
the State of California and special warranty deeds (or the state equivalent) for
the Seller Real Property located in the remaining states, in recordable form and
otherwise sufficient to convey such Seller Real Property to the Purchaser,
subject to no Liens except Permitted Liens, and pursuant to the laws of the
state in which such Seller Real Property is located, as reasonably approved by
the Purchaser and the Title Company (provided, however, that for purposes of
this Section 9.2(a)(i), Seller Real Property shall not include the Land,
Facility or any other assets which would comprise Seller Real Property in each
case owned by the Myrtle Beach Fee Owner or the Yardley Fee Owner);
(ii)    Bill of Sale. A Bill of Sale duly executed by the Sellers, in the form
of Exhibit 9.2(a)(ii), sufficient to convey such Personal Property to the
Purchaser, subject to no Liens except Permitted Liens (provided, however, that
for purposes of this Section 9.2(a)(ii),

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Personal Property shall not include any assets which would comprise Personal
Property hereunder in each case owned by the Myrtle Beach Fee Owner or the
Yardley Fee Owner);
(iii)    Assignment of Other Property. An Assignment and Assumption of Other
Property duly executed by the Sellers in the form of Exhibit 9.2(a)(iii)
(provided, however, that for purposes of this Section 9.2(a)(iii), Other
Property shall not include any assets which would comprise Other Property
hereunder in each case owned by the Myrtle Beach Fee Owner or the Yardley Fee
Owner);
(iv)    Other Conveyance Instruments. Such other appropriate instruments of
assignment and conveyance, in form mutually but reasonably satisfactory to the
Parties, dated as of the Closing Date, conveying all of the Sellers’ right,
title and interest in and title to the Assets, free and clear of all Liens
except as otherwise permitted herein;
(v)    FIRPTA Certificate. Certificate and affidavit of the Sellers’ non-foreign
status that complies with Section 1445 of the Code, in the form attached hereto
as Exhibit 9.2(a)(v);
(vi)    Evidence of Seller Authority. Evidence of the authority of each Seller
to execute and deliver the applicable Seller Documents in order to effectuate
the Closing, including certificates of foreign qualification of the applicable
Seller from the Secretary of State or other applicable Governmental Authority in
the jurisdiction where the applicable Seller Real Property is located;
(vii)    Bring-Down Certificate. A bring-down certificate executed by Sellers
reaffirming that the representations and warranties are true and correct as of
the Closing Date in the form of Exhibit 9.2(a)(vii) (the “Seller Certificate”);
(viii)    Tax Declarations. Such applicable sales tax or real property transfer
tax forms or declarations or similar forms as prepared by Purchaser and executed
by Sellers as required by Applicable Law;
(ix)    Closing Statement. The Closing Statement, executed by the Sellers and in
form agreed to by the Sellers and the Purchaser (the “Closing Statement”);
(x)    Rent Roll. A rent roll for each Facility for the period ending not
earlier than thirty (30) days prior to Closing, certified by the Sellers as of
the Closing Date as true, complete and accurate in all material respects as of
the date indicated therein;
(xi)    Title Insurance. Customary owners’ affidavits, gap indemnities, in form
reasonably agreed by the parties thereto, as reasonably requested by the Title
Company to cause the Title Company to issue the Title Policies; and
(xii)    Master Lease. Seller shall cause an Affiliate of Sellers (“Master
Tenant”) to (A) execute (i) a Master Lease in the form attached hereto as
Exhibit 9.2(a)(xii) (the “Master Lease”) pursuant to which Master Tenant will
lease the Facilities from the Purchaser, and (ii) all documents required to be
delivered in connection with the

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Master Lease, including all guaranty agreements, security agreements, pledge
agreements and subleases, and (B) execute an agreement with the New Manager (or
other manager party thereto) subordinating its interests in and to the
management agreement(s) set forth in accordance with the Master Lease.
(xiii)    Assignment of Membership Interests. An Assignment and Assumption of
Membership Interests duly executed by the Myrtle Beach Seller and the Yardley
Seller, as applicable, in the form of Exhibit 9.2(a)(xiii)
(xiv)    Other Deliveries. Such other documents a reasonably necessary to
effectuate the transactions described herein.
(Items (i) through (xiii) hereafter are referred to as the “Seller Documents.”)
(b)    The Purchaser shall deliver to the Sellers or cause to be delivered to
the Sellers on the Closing Date the following:
(i)    Assignment of Other Property. An Assignment of Other Property duly
executed by the Purchaser in the form of Exhibit 9.2(a)(iii);
(ii)    Bring-Down Certificate. A bring-down certificate executed by the
Purchaser reaffirming that the representations and warranties are true and
correct as of the Closing Date in the form of Exhibit 9.2(b)(ii) (the “Purchaser
Certificate”);
(iii)    Tax Declarations. Such applicable sales tax or real property transfer
tax forms or declarations or similar forms as prepared and executed by the
Purchaser as required by Applicable Law;
(iv)    Closing Statement. The Closing Statement executed by the Purchaser;
(v)    Title Insurance. Customary owners’ affidavits, gap indemnities and other
instruments, in form reasonably acceptable to the parties thereto, as reasonably
requested by the Title Company to cause the Title Company to issue the Title
Policies ;
(vi)    Evidence of Purchaser Authority. Evidence of the authority of the
Purchaser to execute and deliver the applicable Purchaser Documents in order to
effectuate the Closing, including a good standing certificate of the Purchaser
from the Secretary of State in its state of organization; and
(vii)    Master Lease. The Master Lease duly executed by Purchaser and all other
documents required to be delivered by the Master Lease to the extent such
documents require Purchaser’s signature.
(viii)    Other Deliveries. Such other documents a reasonably necessary to
effectuate the transactions described herein;
(Items (i) through (viii) hereafter are referred to as the “Purchaser
Documents”).

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Section 9.3    Closing Adjustments. As the Master Lease is a triple net lease
and the Master Tenant (as the tenant thereunder) is entitled thereunder to all
revenue of the Facilities and is liable for all expenses of the Facilities from
and after Closing, including the payment of real property taxes, there shall be
no credits or prorations at the Closing between Purchaser and Sellers with
respect to the revenues or costs associated with owning or operating the
Facilities. As applicable, all such credits and prorations shall be made between
Sellers and Master Tenant under terms outside of this Agreement.
Section 9.4    Closing Costs; Transfer Taxes.
(a)    Each Party shall pay its own legal, accounting and other professional
fees incurred by such Party in connection with the transactions described in
this Agreement and any other cost or expense not specifically enumerated in
Section 9.4(b). Purchaser shall pay one hundred percent (100%) of any and all
costs and expenses, including all documentary or similar taxes and recording
fees, that relate solely to borrowings by Purchaser to finance the acquisition
of the Assets.
(b)    Subject to Section 9.4(c), at or before the Closing, the Sellers shall
pay all of the following transaction expenses incurred in connection with the
transactions described in this Agreement: (i) any escrow or closing charges of
the Title Company; (ii) any and all sales, documentary, stamp, transfer, sales,
use, gross receipts or similar taxes or recording fees related to the transfer
of the Assets (collectively, the “Transfer Taxes”); (iii) any search fees and
costs for the Initial Title Commitments and any updates Purchaser deems
reasonably necessary thereto; (iv) the cost of the Initial Surveys and any
updates Purchaser deems reasonably necessary thereto; (v) the cost of any
reasonable U.C.C., judgment, bankruptcy, tax and other appropriate searches
reasonably acceptable to Purchaser, (vi) the premium for each Title Policy
issued to the Purchaser, which premium shall include the cost to obtain extended
coverage and the following endorsements, to the extent available: zoning,
comprehensive, access, tax parcel (single or multiple as need), same as survey,
contiguity (as needed), utility facility and solely with respect to the Myrtle
Beach Facility and the Yardley Commons Facility, a non-imputation endorsement,
(vii) the cost of any endorsement required to cure or insure over any exceptions
identified by the Purchaser in any Title Objection Notice which Sellers agreed
to cure, and (viii) the costs associated any Phase I environmental reports,
property inspection reports and all other reports, inspections and
investigations placed in the Data Site by the Sellers.
(c)    At Closing, the Closing Statement will reflect that Purchaser shall
reimburse or pay, as the case may be, One Million Five Hundred Thousand Dollars
($1,500,000) toward the expenses incurred by Sellers pursuant to Section 9.4(b).
(d)    The Purchaser shall prepare and cause to be filed at Closing all
applicable sales tax or real property transfer tax forms or declarations or
similar forms as required by Applicable Law. Sellers agree to reasonably
cooperate in the preparation of such declarations or forms.
Section 9.5    Survival. The terms of this Article IX shall survive the Closing.

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ARTICLE X

TERMINATION AND ABANDONMENT
Section 10.1    Method of Termination. This Agreement may be terminated and the
transactions herein contemplated may be abandoned at any time on or before the
Closing:
(a)    by either Party in its sole discretion prior to the expiration of the
Inspection Period;
(b)    by mutual written consent of the Parties;
(c)    by the Purchaser giving written notice to the Sellers at any time prior
to the Closing in the event the Sellers have breached any representation,
warranty or covenant contained in this Agreement in any material respect,
provided that the Purchaser has notified the Sellers of the breach and the
breach has continued without cure for a period of fifteen (15) days following
the notice of breach;
(d)    by the Purchaser giving written notice to the Sellers at any time after
the later to occur of (i) the Outside Date (regardless of whether the cure
period set forth in Section 10.1(c) has expired) and (ii) the date to which the
Sellers have postponed the Closing pursuant to and in accordance with Section
4.4(b) hereof, if (i) Purchaser is ready, willing and able to close on the date
such notice is provided, which for purposes hereof, shall be based upon the
Purchaser’s ability to demonstrate the ability to fund all amounts necessary to
consummate the Closing; provided however, the Purchaser shall be able to
demonstrate such ability to fund without having to actually fund such required
amounts, and (ii) Sellers are unwilling or unable to close on the date of such
notice despite all of the conditions to Sellers’ obligation to close being
satisfied in full, including, without limitation, the Monetary Lien Condition
(other than those conditions that by their nature cannot be satisfied or waived
until the Closing Date);
(e)    by the Purchaser giving written notice to the Sellers at any time after
the Outside Date if the Sellers are unable or unwilling to close the transaction
described herein on the basis that the Monetary Lien Condition has not been and
simultaneously with the Closing will not have been, satisfied;
(f)    by the Sellers giving written notice to the Purchaser at any time prior
to the Closing in the event the Purchaser has breached any representation,
warranty or covenant contained in this Agreement in any material respect,
provided that the Sellers have notified the Purchaser of the breach and the
breach has continued without cure for a period of fifteen (15) days following
the notice of breach;
(g)    by the Sellers giving written notice to the Purchaser at any time after
the Outside Date (regardless of whether the cure period set forth in Section
10.1(f) has expired) if (i) Sellers are is ready, willing and able to close on
the date such notice is provided, and (ii) Purchaser is unwilling or unable to
close on the date of such notice despite all of the conditions to Purchaser’s
obligation to close being satisfied in full (other than those conditions that by
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(h)    by the Purchaser or the Sellers pursuant to Sections 4.4(b), 6.2 or 6.3;
or
(i)    by either Party, by giving written notice to the other Party, if a court
of competent jurisdiction or other Governmental Authority shall have issued a
non-appealable final order, decree or ruling or taken any other action, in each
case having the effect of permanently restraining, enjoining or otherwise
prohibiting the transactions contemplated hereby, unless the Party relying on
such order, decree or ruling or other action has not complied in all material
respects with its obligations under this Agreement.
Section 10.2    Procedure Upon Termination. In the event either party exercises
its right to terminate this Agreement pursuant to Section 10.1, this Agreement
shall immediately terminate and shall be abandoned, without further action by
any of the Parties. If this Agreement is terminated for any reason, no Party
shall have any liability or further obligation except as set forth in Section
10.3 and for the Surviving Obligations.
Section 10.3    Effect of Termination; Remedies for Default; Break Up Fees.
(a)    Seller Defaults. If the Purchaser terminates this Agreement pursuant to
Section 10.1(e), then within three (3) Business Days following such termination
the Sellers shall pay to the Purchaser cash in good funds in the amount of the
Break Up Fee. In addition, the Surviving Obligations shall remain in effect.
(b)    Purchaser Defaults. If the Sellers terminate this Agreement pursuant to
Section 10.1(f) or Section 10.1(g), then within three (3) Business Days
following such termination the Purchaser shall pay to the Sellers cash in good
funds in the amount of the Break Up Fee. In addition, the Surviving Obligations
shall remain in effect.
(c)    Specific Performance. If the Purchaser has the right to terminate this
Agreement pursuant to Section 10.1(d), the Parties agree that because Purchaser
will not have an adequate remedy at law, Purchaser shall have the right, in lieu
of termination of this Agreement, to seek specific performance.
(d)    Representation and Warranty Defaults. In the event that the Purchaser
terminates this Agreement pursuant to Section 10.1(c), as a result of the
Sellers’ breach of a material representation and warranty which breach (i)
existed as of Effective Date or (ii) occurred after the Effective Date but prior
to the Closing Date as a result of the Sellers’ intentional, willful or
negligent actions, the Sellers shall pay to the Purchaser an amount equal to the
lesser of (i) Purchaser’s Expenses and (ii) the Reimbursement Cap within three
(3) Business Days following such termination.
(e)    Other Termination. If this Agreement is terminated pursuant to Section
10.1(a), Section 10.1(b), Section 10.1(c) (other than as a result of breaches
covered by Section 10.3(d)(i) or Section 10.3(d)(ii)), Section 10.1(h) or
Section 10.1(i), then the only obligations of the Parties shall be the Surviving
Obligations.
(f)    Liquidated Damages. The Parties have agreed that the actual damages of
either Party, in the event of a failure of the other Party to consummate the
transactions described herein due to a default or breach of its covenants
hereunder, would be extremely difficult or

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impracticable to determine. After negotiation, the Parties have agreed that,
considering all the circumstances existing on the date of this Agreement, in the
circumstances set forth in this Agreement requiring payment of the same, an
amount equal to the Break Up Fee is a reasonable estimate of the damages that
the applicable Party would incur in such event.
ARTICLE XI

MISCELLANEOUS PROVISIONS
Section 11.1    Amendment and Modification. This Agreement may be amended,
modified and supplemented only by written agreement signed by all of the
Parties.
Section 11.2    Waiver of Compliance; Consent. Any failure of the Sellers on the
one hand, or the Purchaser, on the other hand, to comply with any obligation,
covenant agreement or condition herein may be waived in writing by the other
Party, but such waiver or failure to insist upon strict compliance with such
obligation, covenant, agreement or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure. Whenever this
Agreement requires or permits consent by or on behalf of any Party, such consent
shall be given in writing in a manner consistent with the requirements for a
waiver of compliance as set forth in this Section 11.2.
Section 11.3    Notice. All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and shall be personally
delivered, or sent by facsimile transmission or electronic mail (provided a copy
is thereafter promptly mailed or delivered as hereinafter provided), or sent by
overnight commercial delivery service (provided a receipt is available with
respect to such delivery), and shall be effective when received during business
hours (a business hour being the hours from 8:00 a.m. to 5:00 p.m. on Business
Days and if notice is received after business hours it shall be deemed delivered
on the next Business Day), if sent by personal delivery, by facsimile
transmission, electronic mail or by overnight delivery service:
(a)    If to the Purchaser, to:
National Health Investors, Inc.
222 Robert Rose Drive
Murfreesboro, Tennessee 37129
Attention: Chief Credit Officer
Facsimile: (615) 225-3030
Email: kgaines@nhireit.com
With a copy to:
Harwell Howard Hyne Gabbert & Manner, P.C.
c/o John M. Brittingham
333 Commerce Street, Suite 1500
Nashville, Tennessee 37201
Facsimile: (615) 251-1059
Email: john.brittingham@h3gm.com

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(b)    If to the Sellers, to:
c/o - Holiday Retirement
5885 Meadows Rd., Suite 500
Lake Oswego, OR 97035
Attn: Chief Legal Officer
Email: legal@holidaytouch.com
with a copy (which shall not constitute notice) to:
Skadden, Arps, Slate, Meagher & Flom LLP
4 Times Square
New York, New York 10036
Attn: Neil Rock
Tel: (212) 735-3787
Fax: (917) 777-3787
Email: neil.rock@skadden.com
or to such other person or address as any Party shall furnish to the other Party
in writing pursuant to this Section 11.3. Notice shall be deemed given to any
Person in accordance with the terms of this Section 11.3 if and when rejected by
such Person.
Section 11.4    Bulk Sales Laws. The Purchaser and Sellers hereby waive
compliance by the other with the provisions of any bulk sales, bulk transfer or
similar laws of any jurisdiction that may otherwise be applicable with respect
to the sale of all or any portion of the Assets to the Purchaser.
Section 11.5    Expenses. Except as otherwise provided herein, each Party shall
bear its own costs and expenses (including legal fees and expenses) incurred in
connection with this Agreement and the transactions contemplated hereby.
Section 11.6    Assignment. This Agreement and all of the terms, covenants and
conditions in this Agreement shall be binding upon and inure to the benefit of
the Parties and their respective heirs, successors and permitted assigns.
Neither the Purchaser nor the Sellers may assign this Agreement without first
obtaining the other Party’s prior written consent, which may be withheld in the
other Party’s sole discretion. No permitted assignment of this Agreement shall
release the Purchaser from its obligations hereunder. Notwithstanding the
foregoing, this Agreement may be assigned by Purchaser to one or more Affiliates
of Purchaser at Closing; provided that (i) Purchaser and any assignees by
accepting assignment of this Agreement, expressly agrees to defend and indemnify
the Sellers from any litigation arising out of the assignment; (ii) no further
assignment shall occur without the prior written consent of the Seller; and
(iii) written notice of the assignment, is provided to the Sellers no fewer than
five (5) Business Days prior to Closing.
Section 11.7    Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of New York, without giving effect to any
principles regarding conflict of laws to the extent such principles would
require or permit the application of the laws of another jurisdiction.

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Section 11.8    Business Day. If the date for giving of notice or performance of
any duty or obligation hereunder falls on a day that is not a Business Day
hereunder, such date shall be automatically extended to the next Business Day
hereunder.
Section 11.9    Counterparts. This Agreement may be executed by facsimile
signature or other electronic form of signature, (including “pdf”) and in two
(2) or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
Section 11.10    Headings. The Article and Section headings and table of
contents contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.
Section 11.11    Entire Agreement. This Agreement, as such term is used
throughout, includes the Exhibits and Disclosure Schedules hereto and embodies
the entire agreement and understanding of the Parties in respect of the subject
matter contained herein. There are no restrictions, promises, representations,
warranties, covenants, agreements or undertakings, other than those expressly
set forth or referred to herein. This Agreement supersedes all prior agreements
and understandings among the Parties with respect to such subject matters
contained herein.
Section 11.12    Warranty of Authority. Each of the Parties warrants that the
persons signing on their behalf have the right and power to enter into this
Agreement and to bind them to the terms of this Agreement.
Section 11.13    Publicity. All pre-Closing publicity concerning the
transactions contemplated by this Agreement and all notices respecting publicity
shall be jointly planned, coordinated and released by and among the Parties;
provided, however, that nothing herein shall prohibit either Party from making
any press release or disclosure as may be required to comply with Applicable
Law, regulation or stock market rule provided that the releasing or disclosing
Party provides notice to the other of the substance of such release or
disclosure in advance thereof.
Section 11.14    Waiver of Jury Trial. EACH OF THE PARTIES HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL ACTION BROUGHT ON IN
CONNECTION WITH ANY MATTER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. THE PROVISIONS OF THIS SECTION
11.14 SHALL SURVIVE THE CLOSING OR EARLIER TERMINATION OF THIS AGREEMENT.
Section 11.15    Third Party Beneficiaries. Nothing in this Agreement, expressed
or implied, is intended or shall be construed to confer upon any third party
other than the Parties hereto and the Indemnified Parties as set forth in
Article IV and Article VII any right, remedy or claim under or by reason of this
Agreement.
Section 11.16    Interpretation. When a reference is made in this Agreement to
an Article, a Section, Exhibit or section of the Disclosure Schedules, such
reference shall be to an Article of,

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a Section of, or an Exhibit or section of the Disclosure Schedules to, this
Agreement unless otherwise indicated. Whenever the words “include,” “includes”
or “including” are used in this Agreement, they shall be deemed to be followed
by the words “without limitation.” The words “hereof,” “herein” and “hereunder”
and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement. All
terms defined in this Agreement shall have the defined meanings when used in any
certificate or other document made or delivered pursuant hereto unless otherwise
defined therein. The definitions contained in this Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such term. Any agreement,
instrument or statute defined or referred to herein or in any agreement or
instrument that is referred to herein means such agreement, instrument or
statute as from time to time amended, modified or supplemented, including (in
the case of agreements or instruments) by waiver or consent and (in the case of
statutes) by succession of comparable successor statutes and references to all
attachments thereto and instruments incorporated therein. References to a person
are also to its permitted successors and assigns. The Parties have participated
jointly in the negotiating and drafting of this Agreement. In the event of an
ambiguity or a question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the Parties, and no presumption or burden
of proof shall arise favoring or disfavoring any Party by virtue of the
authorship of any provisions of this Agreement. In the event of a conflict
between this Agreement and any Exhibit hereto, this Agreement shall govern.
Section 11.17    Submission to Jurisdiction. Each Party (i) submits to the
exclusive jurisdiction of the state courts of the State of New York in New York
County and to the jurisdiction of the United States District Court for the
Southern District of New York for the purposes of each and every suit, action or
other proceeding arising out of or based upon this Agreement or the subject
matter hereof brought by the Parties, it being expressly understood and agreed
that this consent to jurisdiction shall be self-operative and no further
instrument or action, other than service of process as required by law, shall be
necessary in order to confer jurisdiction upon a party in any such court; and
(ii) waives, and agrees not to assert, by way of motion, as a defense, or
otherwise, in any suit, action or proceeding brought in any such court, any
claim that either the Purchaser or Sellers are not subject personally to the
jurisdiction of the above-named courts, that the Purchaser’s or Sellers’
property is exempt or immune from attachment or execution, that the suit, action
or proceeding is brought in an inconvenient forum, that the venue of the suit,
action or proceeding is improper or that this Agreement or the subject matter
hereof may not be enforced in or by such court, and further agrees to waive, to
the fullest extent permitted under Applicable Law, the benefit of any defense
that would hinder, fetter or delay the levy, execution or collection of any
amount to which Sellers, the Purchaser or its respective successors or assigns
are entitled pursuant to the final judgment of any court having jurisdiction.
Section 11.18    Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of Applicable Law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
Parties shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the Parties as closely as possible to the fullest extent
permitted by Applicable Law in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.

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IN WITNESS WHEREOF, each of the Parties has executed this Agreement as of the
date
first written above.
SELLERS:

Harvest Managing Member II LLC
By:
/s/Scott Shanaberger
Name:
Scott Shanaberger
Title:
Chief Financial Officer

Harvest Mezzanine II LLC
By:
/s/Scott Shanaberger
Name:
Scott Shanaberger
Title:
Chief Financial Officer

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Bridgecreek Retirement Residence LP
Merced Retirement Residence LP
Roseville Retirement Residence LP
Modesto Retirement Residence LP

By: Harvest General Partner II LLC, Its General Partner
By:
/s/Scott Shanaberger
Name:
Scott Shanaberger
Title:
Chief Financial Officer

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Rogers Retirement Residence LLC
Fort Wayne Retirement Residence LLC
Newberg Retirement Residence LLC
Fort Smith Retirement Residence LLC
Athens Retirement Residence LLC
Kenner Investors II LLC
Columbus Retirement Residence LLC
Savannah Retirement Residence LLC
Westminster Retirement Residence LLC
Voorhees Retirement Residence LLC
Gahanna Retirement Residence LLC

By: Harvest Managing Member II LLC, Its Managing Member
By:
/s/Scott Shanaberger
Name:
Scott Shanaberger
Title:
Chief Financial Officer

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Harvest Bay Park Retirement Residence LLC
Harvest Bedford Retirement Residence LLC
Harvest Camelot Retirement Residence LLC
Harvest Chateau de Boise Retirement Residence II LLC
Harvest Fig Garden Retirement Residence LLC
Harvest Garden Club Retirement Residence LLC
Harvest Kamlu-Vancouver Retirement Residence LLC
Harvest Orchard Park Retirement Residence LLC
Broken Arrow Retirement Residence LLC

By: Harvest Mezzanine II LLC
By:
/s/Scott Shanaberger
Name:
Scott Shanaberger
Title:
Chief Financial Officer

[END OF SELLERS’ SIGNATURE PAGES]

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PURCHASER:

NHI-REIT OF NEXT HOUSE, LLC

By:
/s/J. Justin Hutchens
Name:
J. Justin Hutchens
Title:
President

[END OF PURCHASER’S SIGNATURE PAGES]

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JOINDER BY HARVEST FACILITY HOLDINGS LP:
Harvest Facility Holdings LP (“Sellers’ Guarantor”), hereby joins in the
execution of this Agreement and hereby unconditionally guaranties to the
Purchaser the full and faithful payment and performance by the Sellers of all of
their obligations to the Purchaser under this Agreement. The liability of
Sellers’ Guarantor hereunder shall in no way be affected, diminished or released
by any extension of time or forbearance that may be granted by the Purchaser to
the Sellers or by the acceptance by the Purchaser of additional security for
performance of the Agreement or any release, substitution or changes in any such
security, or by any modifications, amendments or extensions of the Agreement
agreed upon by the Sellers and the Purchaser. The Purchaser, in its sole
discretion, may waive or release any provision or provisions of the Agreement as
the Purchaser may deem proper or desirable, without any notice to or further
assent from Sellers’ Guarantor and without in any manner impairing or affecting
this guaranty as to any provision(s) not so waived or released or any of the
Sellers’ Guarantor’s obligations hereunder. Sellers’ Guarantor waives all rights
and defenses arising out of an election of remedies by the Purchaser, even
though that election of remedies has destroyed Sellers’ Guarantor’s rights of
subrogation and reimbursement against the Sellers. Sellers’ Guarantor waives all
suretyship rights or defenses under applicable law. The Purchaser may enforce
this guaranty against the Sellers’ Guarantor without the necessity at any time
of resorting to or exhausting any other remedy or any other security or
collateral and without the necessity at any time of having recourse to any of
its rights or remedies under the Agreement, and without the necessity of
proceeding against the Sellers. This is a guaranty of payment and performance
and not merely of collection. The obligations of Sellers’ Guarantor hereunder
are absolute, primary, unconditional and irrevocable obligations, enforceable by
the Purchaser at the Purchaser’s election, simultaneously with or after
proceeding against Sellers or without the necessity of any suit or proceedings
against the Sellers, and in any event, without the necessity of any notice of
non-payment, non-performance or non-observance, or of any notice of acceptance
of this guaranty or any other notice or demand to which Sellers’ Guarantor might
otherwise be entitled or that may be required to preserve any rights against
Sellers’ Guarantor, all of which Sellers’ Guarantor expressly waives.
HARVEST FACILITY HOLDINGS LP
By:
/s/Scott Shanaberger
Name:
Scott Shanaberger
Title:
Chief Financial Officer

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JOINDER BY NATIONAL HEALTH INVESTORS, INC.:
National Health Investors, Inc. (“Purchaser’s Guarantor”), hereby joins in the
execution of this Agreement and hereby unconditionally guaranties to the Sellers
the full and faithful payment and performance by the Purchaser of all of their
obligations to the Sellers under this Agreement. The liability of Purchaser’s
Guarantor hereunder shall in no way be affected, diminished or released by any
extension of time or forbearance that may be granted by the Sellers to the
Purchaser or by the acceptance by the Sellers of additional security for
performance of the Agreement or any release, substitution or changes in any such
security, or by any modifications, amendments or extensions of the Agreement
agreed upon by the Purchaser and the Sellers. The Sellers, in their sole
discretion, may waive or release any provision or provisions of the Agreement as
the Sellers may deem proper or desirable, without any notice to or further
assent from Purchaser’s Guarantor and without in any manner impairing or
affecting this guaranty as to any provision(s) not so waived or released or any
of the Purchaser’s Guarantor’s obligations hereunder. Purchaser’s Guarantor
waives all rights and defenses arising out of an election of remedies by the
Sellers, even though that election of remedies has destroyed Purchaser’s
Guarantor’s rights of subrogation and reimbursement against the Purchaser.
Purchaser’s Guarantor waives all suretyship rights or defenses under applicable
law. The Sellers may enforce this guaranty against the Purchaser’s Guarantor
without the necessity at any time of resorting to or exhausting any other remedy
or any other security or collateral and without the necessity at any time of
having recourse to any of its rights or remedies under the Agreement, and
without the necessity of proceeding against the Purchaser. This is a guaranty of
payment and performance and not merely of collection. The obligations of
Purchaser’s Guarantor hereunder are absolute, primary, unconditional and
irrevocable obligations, enforceable by the Sellers at the Sellers’ election,
simultaneously with or after proceeding against Purchaser or without the
necessity of any suit or proceedings against the Purchaser, and in any event,
without the necessity of any notice of non-payment, non-performance or
non-observance, or of any notice of acceptance of this guaranty or any other
notice or demand to which Purchaser’s Guarantor might otherwise be entitled or
that may be required to preserve any rights against Purchaser’s Guarantor, all
of which Purchaser’s Guarantor expressly waives.
NATIONAL HEALTH INVESTORS, INC.

By:
/s/J. Justin Hutchens
Name:
J. Justin Hutchens
Title:
President

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Schedule 1
Required Approvals
1.
Payment of certain indebtedness payable pursuant to that certain Loan Agreement
(as amended, restated, supplemented or modified from time to time), dated as of
February 28, 2007, by and among the borrowers identified therein and Citigroup
Global Markets Realty Corp. , and Goldman Sachs Commercial Mortgage Capital,
L.P., as succeeded by Fannie Mae, in the original principal amount of
$1,756,094,352.47.

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