EXHIBIT 10-122 SUTTONS REST HOME PURCHASE AND SALE AGREEMENT

 

<PAGE>

                                                                  EXHIBIT 10-122

 

 

                                                               SUTTONS REST HOME

 

 

                           PURCHASE AND SALE AGREEMENT

 

 

         THIS PURCHASE AND SALE AGREEMENT (this "AGREEMENT") is made and entered

into as of the 14th day of November, 2003 (the "EFFECTIVE DATE") by and between

DIVERSICARE ASSISTED LIVING SERVICES NC II, LLC, a Delaware limited liability

company ("SELLER"), and MARGARET SUTTON, an individual resident of North

Carolina or her permitted assigns ("BUYER"), with reference to the following:

 

         A. Seller is the owner of the improved real property located at 4258 US

13 North, Goldsboro, Wayne County, North Carolina, formerly operated by Seller

as an adult care home facility known as Suttons Rest Home.

 

         B. Buyer desires to purchase from Seller, and Seller is willing to sell

and convey to Buyer, all of Seller's right, title and interest in and to said

real property, together with certain personal property located thereon and

certain other assets relating thereto, for the Purchase Price and subject to the

conditions contained in this Agreement.

 

         NOW, THEREFORE, in consideration of the Deposit (as hereinafter

defined) paid by Buyer hereunder, the mutual covenants and agreements contained

herein, and other good and valuable consideration, the receipt and sufficiency

of which are hereby acknowledged, the parties hereto agree as follows:

 

1.        PURCHASE AND SALE.

 

          1.1 PURCHASED ASSETS. Subject to the terms and conditions of this

Agreement, Seller agrees to sell, assign, transfer and convey to Buyer and Buyer

agrees to accept and purchase from Seller, for the Purchase Price set forth in

Section 3 hereof, the following (collectively, the "PURCHASED ASSETS"):

 

             1.1.1 All of Seller's right, title and interest in and to (i) that

certain tract or parcel of land located in the City of Goldsboro, Wayne County,

North Carolina, and being more particularly described in Exhibit A attached

hereto and made a part hereof (the "LAND"), together with all rights, tenements,

heriditaments, easements, privileges and appurtenances belonging or pertaining

thereto, and (ii) all buildings, structures or other improvements located on the

Land, including without limitation the adult care home facility, single family

residence and storage house formerly operated and known as Suttons Rest Home

(the "FACILITY"), all sidewalks, landscaping, parking lots and structures, and

driveways located thereon, and all permanently affixed fixtures located on, in

or used in connection with, and permanently affixed or incorporated into, the

Land, together with all replacements, additions and accessions thereto

collectively, including the Facility, (the

 

 

 

<PAGE>

 

"IMPROVEMENTS") (the "Land" and Improvements" are sometimes hereinafter

collectively referred to as the "REAL PROPERTY");

 

             1.1.2 The following items of machinery, equipment, furniture,

furnishings, supplies, inventory and other movable tangible personal property

owned by Seller and located at or on the Real Property and formerly used in

connection with the operation of the Facility (the "PERSONAL PROPERTY"): two (2)

old hospital beds, one (1) upright piano (broken), and one (1) commercial gas

stove.

 

             1.1.3 All of Seller's right, title and interest in and to the name

"Suttons Rest Home" (the "FACILITY NAME");

 

         1.2 EXCLUDED ASSETS. There is specifically excluded from the Purchased

Assets, and anything herein to the contrary notwithstanding, Seller is not

selling, assigning or transferring to Buyer, and Buyer is not acquiring and

purchasing from Seller, any of the following: (a) any right to the use of the

names "Advocat" or "Diversicare" or any derivative thereof; (b) any items of

machinery, equipment, furniture, furnishings, supplies, inventory and other

movable tangible personal property owned by the Seller other than the Personal

Property (c) the dryer in the laundry room at the Facility which is leased from

Coinmach and which Seller will remove (or cause to be removed) prior to Closing;

(d) the Medicaid provider number of Seller for the Facility; and (e) the license

of Seller from the State of North Carolina to operate the Facility as an adult

care home. Buyer acknowledges and agrees that in the event it desires to use the

Facility as an adult care home after Closing, Buyer must, at its own cost and

expense, make application for and obtain from the State of North Carolina a new

license to operate the home as an adult care home and a new Medicaid provider

number for reimbursement under the applicable state and/or federal Medicaid

programs together with any other licenses, permits and certifications necessary

or required to operate the Facility as an adult care home. Buyer further

acknowledges and agrees that Buyer shall have no right to, and will not, have

the right to use the Medicaid provider number of Seller for any purpose on and

after the Closing Date. The provisions of this Section 1.2 shall survive the

Closing.

 

         1.3 DELIVERY OF PERSONAL PROPERTY. The presence of the Personal

Property at the Facility on the Closing Date shall constitute delivery thereof.

Any items of Personal Property containing the name or logo of "Diversicare" or

"Advocat", or any derivative thereof, shall be replaced by Buyer and either

destroyed or returned to Seller promptly following the Closing Date.

 

2.        PURCHASE PRICE AND DEPOSIT.

 

         2.1 PURCHASE PRICE. The purchase price payable at closing by wire

transfer of immediately available funds to the order of Seller for the Property

shall be Sixty Thousand Dollars ($60,000.00) (the "PURCHASE PRICE"), subject to

such adjustment as may be provided for in this Agreement.

 

         2.2 PAYMENT OF PURCHASE PRICE. The Purchase Price shall be payable as

follows:

 

             2.2.1 Concurrently with the execution of this Agreement by Buyer

and Seller, and as a condition precedent to the effectiveness hereof, Buyer

shall deposit in escrow with Harwell Howard Hyne Gabbert & Manner, P.C.,

("ESCROW HOLDER"), in cash or by wire transfer of immediately available, same

day federal funds, the sum of Two Thousand Five Hundred Dollars

 

 

                                       2

<PAGE>

 

($2,500.00) (the "DEPOSIT"). Immediately upon Escrow Holder's receipt of the

Deposit (the "OPENING OF ESCROW"), Escrow Holder shall deposit the same in a

federally insured non-interest-bearing account.

 

             2.2.2 Provided all the conditions in Section 7.1 hereof have been

satisfied or waived by Buyer, Buyer shall deposit with Seller by wire transfer

of immediately available, same day federal funds on the Closing Date an amount

equal to the Purchase Price less the Deposit plus or minus applicable prorations

pursuant to Section 9 hereof.

 

         2.3 DISPOSITION OF DEPOSIT UPON FAILURE TO CLOSE. If the Closing fails

to occur due to Buyer's default under this Agreement, then the disposition of

the Deposit shall be governed by Section 11.1 hereof; if the Closing fails to

occur due to Seller's default under this Agreement, then the Deposit shall

promptly be refunded to Buyer; and if the Closing fails to occur due to the

failure of any of the conditions set forth in Sections 7.1 or 7.2 hereof other

than as a result of Buyer's or Seller's default under this Agreement, then the

disposition of the Deposit and all interest accrued thereon shall be governed by

Section 7.3 hereof.

 

3.        CLOSING; CLOSING DATE.

 

         3.1 CLOSING; CLOSING DATE. The closing of the purchase and sale of the

Purchased Assets (the "CLOSING") shall occur on a date (the "CLOSING DATE") that

is mutually agreed upon by the parties but in all events not later than November

20, 2003. The Closing shall be held at the offices of Seller's attorney or the

Title Company (as defined in Section 4.2.1) in North Carolina (the "CLOSING

AGENT"), which at Seller's or Buyer's election may be effectuated by forwarding

all executed documents and other items necessary to effect the Closing to the

Closing Agent without the necessity of the parties actually being present for

the Closing.

 

4.        PROPERTY INFORMATION; TITLE REVIEW; INSPECTIONS AND DUE DILIGENCE.

 

         4.1 PROPERTY INFORMATION. Prior to Closing, Seller shall make available

to Buyer at the Facility, or will deliver to Buyer's representative as directed

by Buyer, if any, to the extent in Seller's possession, and control and readily

available, the following (the "PROPERTY INFORMATION"): the most current title

insurance policy issued to Seller with respect to the Real Property, the most

current surveys prepared for Seller with respect to the Real Property; any prior

environmental (including any Phase I or Phase II reports), engineering,

landscape, utility and other reports or studies made with respect to the Real

Property; any architectural plans and specifications and as built plans for the

Real Property; and such other information and documentation with respect to the

Real Property as Buyer shall reasonably request that Seller has in its

possession or control. Seller makes no representation or warranty as to the

truth, accuracy or completeness of any Property Information delivered by Seller

to Buyer in connection with the transaction contemplated hereby. Buyer

acknowledges and agrees that all Property Information delivered by Seller to

Buyer in connection with the transaction contemplated hereby are provided to

Buyer as a convenience only and that any reliance on or use of such materials,

data or information by Buyer shall be at the sole risk of Buyer.

 

         4.2 TITLE AND SURVEY REVIEW; TITLE POLICY.

 

 

 

                                       3

<PAGE>

 

             4.2.1 TITLE REPORT. Buyer, at its option and sole cost and expense,

may obtain from a title insurance company acceptable to Buyer and authorized to

provide title insurance in the State of North Carolina (the "TITLE Company") a

preliminary report or title commitment for an owner's policy of title insurance

covering the Real Property (the "TITLE REPORT"), together with copies of all

documents (collectively, the "TITLE DOCUMENTS") referenced in the Title Report.

Buyer, at its option and sole cost and expense, may (a) obtain a new survey for

the Real Property or (b) cause an existing survey of the Real Property to be

updated or recertified (the "SURVEY"). Buyer understands and acknowledges that

if Buyer elects to obtain a Title Report and/or a Survey, the completion and/or

delivery of the Title Report and the Survey shall not be a condition precedent

to the Closing.

 

             4.2.2 TITLE REVIEW AND CURE. If Buyer elects to obtain a Title

Report or Survey, Buyer shall have the right to give Seller written notice of

any objections with respect to any defects in the condition of title or other

matters adversely affecting the Real Property shown on or by the Title Report

and/or the Survey ("DEFECTS"), Buyer shall deliver to Seller written notice

("BUYER'S TITLE NOTICE") of any Defects promptly following Buyer's receipt and

review of the Title Report and/or Survey but in all events not later than five

(5) days prior to Closing (the "TITLE REVIEW PERIOD"). Buyer shall provide

Seller with a copy of the Title Report, any Title Documents and the Survey

obtained by Buyer with Buyer's Title Notice. The failure of Buyer to deliver to

Seller Buyer's Title Notice on or before the expiration of the Title Review

Period shall be deemed to constitute Buyer's approval of the condition of title

and survey to the Real Property. If Buyer so gives Seller notice of any Defects,

then Seller may, but shall have no obligation to, eliminate the Defects to

Buyer's reasonable satisfaction on or before Closing by giving Buyer written

notice ("SELLER'S TITLE NOTICE") of those Defects, if any, which Seller agrees

to so eliminate by the Closing Date. If Seller does not elect to, or is unable

to, eliminate any Defects, or Buyer disapproves Seller's Title Notice, then

Buyer shall have the right, upon delivery to Seller, on or before Closing, of a

written notice to either: (a) waive its prior disapproval and notice of Defects,

and proceed with Closing, in which event the Defects shall be deemed approved;

or (b) terminate this Agreement. If Buyer elects to terminate this Agreement as

provided in clause (b) above, this Agreement shall automatically terminate, the

parties shall be released from all further obligations under this Agreement

(except pursuant to any provisions which by their terms survive a termination of

this Agreement), the Deposit shall be immediately returned to Buyer and Buyer

shall immediately return all Property Information to Seller. Buyer shall be

deemed to have approved any title exception shown on or by the Title Report

and/or the Survey to which either Buyer did not object as provided above, or to

which Buyer did object, but with respect to which Buyer did not terminate this

Agreement as provided above, and the same shall be deemed a Permitted Exception

(as hereinafter defined).

 

             4.2.3 DELIVERY OF TITLE POLICY AT CLOSING. If Buyer elects to

obtain a Title Report and this Agreement is not terminated before Closing as

elsewhere provided herein, then Buyer shall have the right, at its option and

sole cost and expense, to cause the Title Company to issue and deliver to Buyer

at the Closing, with respect to the Real Property, a ALTA Owner's Policy of

Title Insurance in current ALTA Form (the "TITLE POLICY"), or a pro forma policy

or marked commitment for the same, dated as of the date and time of the

recording of the Deed (as such term is defined in Section 6.1 hereof) for the

Real Property, in the amount of the Purchase Price, insuring Buyer as owner of

good and marketable title to the Real Property, subject to the Permitted

Exceptions (as hereinafter defined). For purposes of this Agreement, "PERMITTED

EXCEPTIONS" shall mean and include (a) any lien to secure payment of real estate

taxes, including special assessments, not

 

 

 

 

                                       4

<PAGE>

 

delinquent, (b) all applicable laws, ordinances, rules and governmental

regulations (including, without limitation, those relating to building, zoning

and land use) affecting the development, use, occupancy or enjoyment of the Real

Property, and (c) all restrictions, protective and restrictive covenants, rights

of way, easements, reservations and other matters applicable to the Real

Property (except for those title or survey matters, if any, objected to, and not

waived or approved, by Buyer in accordance with Section 4.2.2, above).

 

         4.3 INSPECTIONS.

 

             4.3.1 INSPECTIONS. Buyer has had the opportunity to examine and

inspect the Purchased Assets and is satisfied with the physical condition,

quality and state of repair of the Purchased Assets and their suitability for

Buyer's intended use. Buyer acknowledges that the Real Property may not be in

compliance with certain building, fire, safety and health codes and

requirements, including without limitation, compliance with requirements

relating to the operation of the sewage treatment and disposal system located on

the Property, and that Buyer may be required to remediate the same in accordance

with applicable law after Closing. Until Closing, Buyer, its agents, and

employees shall have the right, at Buyer's sole risk, cost and expense, to

continue to examine and make physical studies, tests, inspections and

assessments of the Real Property and to conduct all other examinations,

inspections and investigations of the Real Property as Buyer deems reasonably

necessary. All physical tests, studies, inspections and assessments shall be

conducted at reasonable times during normal business hours, and after at least

twenty-four (24) hours prior notice to Seller or Seller's agent, and Seller or

Seller's agent shall have the right to accompany Buyer during any activities

performed by Buyer at the Facility or otherwise on the Real Property. Any

inspection, examination or test conducted by Seller will be conducted in a good

and workmanlike manner, promptly prosecuted to completion, and will not violate

any law or regulation of any governmental entity having jurisdiction over the

Purchased Assets. At Seller's request, Buyer shall provide Seller (at no cost to

Seller) with a copy of the results of any tests and inspections made by Buyer.

If any inspection or test disturbs the Real Property, Buyer will restore the

Real Property to the same condition as existed before the inspection or test.

Buyer shall defend, indemnify Seller and hold Seller, Seller's trustees,

officers, tenants, agents, contractors and employees and the Real Property

harmless from and against any and all losses, costs, damages, claims, or

liabilities, including but not limited to, mechanic's and materialmen's liens

and Seller's reasonable attorneys' fees, arising out of or in connection with

Buyer's, its agents, contractors, employees, or invitees entry upon or

inspection of the Real Property made pursuant to this Section 4.3.1. The right

provided herein may be revoked by Seller at any time if Buyer does not comply

with the provisions of this Section 4.3.1 and shall in any event be deemed

revoked upon termination without Closing of this Agreement. The provisions of

this Section 4.3.1 shall survive the Closing or the earlier termination of this

Agreement.

 

5.        RISK OF LOSS

 

         5.1 DAMAGE OR CONDEMNATION. Risk of loss resulting from any

condemnation or eminent domain proceeding, which is commenced or has been

threatened against the Real Property before the Closing Date, and risk of loss

to the Real Property due to fire, flood or any other cause before the Closing

Date, shall remain with Seller. If before the Closing Date the Real Property or

any portion thereof shall be materially damaged, or if the Real Property or any

material portion thereof shall be subjected to a bona fide threat of

condemnation or shall become the subject of any

 

 

 

 

                                       5

<PAGE>

 

proceedings, judicial, administrative or otherwise, with respect to the taking

by eminent domain or condemnation, then Buyer may elect not to acquire the Real

Property by delivering written notice of such election to Seller within five (5)

days after Buyer learns of the damage or taking, in which event Buyer shall no

longer be obligated to purchase, and Seller shall no longer be obligated to

sell, sign, transfer or convey the Real Property, the Deposit shall be

immediately refunded to Buyer, Buyer shall immediately return all Property

Information to Seller and, except for those provisions of this Agreement which

expressly survive the termination of this Agreement, the parties hereto shall

have no further obligations hereunder. If the Closing Date is within the

aforesaid 5-day period, then the Closing shall be extended to the next business

day following the end of said 5-day period. If no such election is made, and in

any event if the damage is not material, this Agreement shall remain in full

force and effect, the assignment and purchase contemplated herein, less any

interest taken by eminent domain or condemnation, shall be effected with no

further adjustment, and upon the Closing, Seller shall assign, transfer and set

over to Buyer all of the right, title and interest of Seller in and to any

awards that have been or that may thereafter be made for such taking, and Seller

shall assign, transfer and set over to Buyer any insurance proceeds that may

thereafter be made for such damage or destruction, giving Buyer a credit at the

Closing for any deductible under such policies. For purposes of this Section

5.4, the phrase(s) (i) "MATERIAL DAMAGE" or "MATERIALLY DAMAGED" means damage

reasonably exceeding ten percent of the Purchase Price of the Real Property, and

(ii) "MATERIAL PORTION" means any portion of the Real Property that has a "fair

market value" exceeding 10% of the Purchase Price of the Real Property.

 

6.        SELLER'S AND BUYER'S DELIVERIES

 

         6.1 SELLER'S DELIVERIES. On or before the Closing Date, Seller shall

deliver (or cause to be delivered) the following:

 

             (a) DEED. A Special Warranty Deed (the "DEED") executed and

acknowledged by Seller and in recordable form, conveying to Buyer Seller's

interest in and to the Real Property, free and clear of all liens and

encumbrances made, suffered or created by Seller other than Permitted

Exceptions.

 

             (b) BILL OF SALE. Bill of Sale and Assignment transferring to

Buyer all of Seller's interest in the Personal Property;

 

             (c) FACILITY NAME. An Assignment of the Facility Name;

 

             (d) STATE LAW DISCLOSURES. Such disclosures and reports, if any, as

are required by applicable state and local law in connection with the conveyance

of Seller's interest of the Real Property.

 

             (e) FIRPTA. A Foreign Investment in Real Property Tax Act affidavit

executed by Seller, stating that Seller is not a "foreign person" as defined in

such Act.

 

             (f) CLOSING STATEMENT. An executed closing statement consistent

with this Agreement.

 

 

 

                                        6

<PAGE>

 

             (g) ADDITIONAL ITEMS. To the extent in Seller's possession, all

keys, if any, used in the operation of the Real Property.

 

         6.2 BUYER'S DELIVERIES. On or before t