August 12, 1996
Securities and Exchange Commission
Filing Desk, Stop 1-4
450 Fifth Street N.W.
Washington, DC 20549
Dear Sirs:
Pursuant to regulations of the Securities and Exchange Commission,
submitted herewith for filing is our Form 8-K.
Sincerely,
Ron Bazzelle
Senior Controller
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of the earliest event reported): August 1, 1996
August 12, 1996
STERLING HOUSE CORPORATION
(Exact name of Registrant as specified in its charter)
1-14022
(Commission File Number)
Kansas 48-1097141
(State or other jurisdiction (IRS employer
of incorporation) identification number)
453 S. Webb Road, Suite 500
Wichita, Kansas 67207
(Address of principal executive offices, including zip code)
316-684-8300
(Registrant's telephone number, including area code)
</PAGE>
Item 2. Acquisition or Disposition of Assets
On August 1, 1996, Sterling House Corporation (the "Company") closed on a
Purchase Agreement dated June 6, 1996, to purchase the land, building and other
assets of Woodland Terrace (the "Residence") from High Plains Senior Living,
Inc., and unrelated entity. The two-year old retirement and assisted living
residence, located in Liberal, Kansas, has 45 private units ranging from studios
to two-bedroom apartments. The Residence was purchased for $2.2 million in cash
and is being accounted for as a purchase. Proceeds from the Company's initial
public offering were used to finance the acquisition.
The Company hereby requests an automatic 60 day extension to file
information required under Item 7.
</PAGE>
<PAGE>
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS
(a) Financial Statements of Business Acquired
See Exhibit 99.1 which appears elsewhere in this Form 8-K.
(b) Pro Forma Financial Information
See Exhibit 99.2 which appears elsewhere in this Form 8-K
(c) Exhibits
Exhibit
Number Exhibit Description
- ------- --------------------
2.1 Purchase Agreement dated June 6, 1996, between
Sterling House Corporation and High Plains Senior
Living, Inc.
99.1 Press release dated August 2, 1996, announcing the
acquisition of Woodland Terrace
99.2(1) Financial Statements of business acquired
99.3(1) Pro Forma financial information
________________________________
(1) To be filed as soon as practical, but not later than October 14, 1996
</PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
Sterling House Corporation
By: /s/R. Gail Knott
___________________________
R. Gail Knott
Chief Financial Officer
Dated: August 12, 1996
REAL ESTATE PURCHASE AGREEMENT
THIS AGREEMENT made this 16th day of June, 1996, between High Plains
Senior Living, Inc. ("Seller") and Sterling House Corporation,
("Purchaser").
1. Sale and Purchase. For and in consideration of the mutual covenants
contained herein, Seller agrees to sell and convey to Purchaser and
Purchaser agrees to buy and accept the following described Land,
Improvements, Personal Property and Intangibles (collectively, the
"Project") consisting of the following:
1.1 Land.
Described as: The site, commonly known as 1500 Terrace, Liberal,
Kansas, is legally described as: All of Block 1, Woodland Terrace Addition
to the city of Liberal, Kansas..
1.2 Improvements.
All buildings, improvements and fixtures located on the land.
1.3 Tangible Personal Property.
All tangible personal property used in the ownership, operation or
maintenance of the aforesaid land or improvements, including, without
implied limitation, all furniture, furnishings, maintenance equipment,
signs, draperies and carpeting.
1.4 Intangible Property.
All intangible property used in the ownership, operation or maintenance
of the Project, including all contract rights, instruments, documents
of title, transferable licenses and goodwill pertaining to the
ownership, operation or management of the Project, EXCLUDING cash in
bank accounts determined as of Closing Date.
2. Purchase Price. The total consideration to be paid to Seller by
Purchaser Project (the "Purchase Price") is Two Million, Two Hundred
Thousand Dollars ($2,200,000.00).
3. Payment of Purchase Price.
3.1 Effective Date. The Effective Date shall be the date on which the
Purchaser and Seller have each received at the addresses specified
for notices, a counterpart of this Agreement, fully executed by
Purchaser and Seller.
</PAGE>
3.2 Earnest Money Deposit. Promptly after the Effective Date,
Purchaser shall deposit with Security Abstract and Title Company,
as agent (the- "Title Company"), the sum of Fifty Thousand and
No/100 Dollars ($50,000.00). Said deposit, and any interest earned
thereon, shall together be referred to as the "Earnest Money
Deposit". Upon the consummation of this transaction (the
"Closing"), the Earnest Money Deposit shall be applied to the
Purchase Price.
3.3 Balance of Purchase Price. The balance of the Purchase Price in
the amount of Two Million, One Hundred and Fifty Thousand Dollars
($2,150,000.00), less interest earned on the Earnest Money Deposit,
adjusted by any prorations or expenses required herein, shall be
paid by Purchaser to Seller at Closing by certified, wired or other
immediately available funds.
4. Title Commitment. Seller shall furnish to Purchaser, the Title
Company's commitment (the "Commitment") to insure the Land, which shall
set forth the state of the title of the Land and any easements or
restrictions, together with all exceptions to or conditions on the title
of the Land. The Commitment shall commit to issue an ALTA Owners Policy
covering the Land in an amount equal to the Purchase Price (the "Title
Policy"). Legible copies of all instruments referred to in the
Commitment shall be furnished to Purchaser with the Commitment.
5. Permitted Exceptions. At the Closing, the Title Policy shall contain
only such exceptions as approved by Purchaser.
6. Review of Commitment and Survey. Seller shall obtain an updated survey
of the Project, at Seller's expense. Purchaser shall have twenty (20) days
after receipt of the Survey and the final Commitment (and copies of
documents referred to in the Commitment), to review the same and to deliver
Purchaser's written objections to the Survey or to any exception or
exclusion shown in the Commitment and not permitted under Paragraph 5
hereof.
7. Seller's Obligation to Cure. Seller shall have thirty (30) days from
receipt to Purchaser's objections to remove all said defects in the
Commitment or the Survey, or to provide assurances acceptable to Purchaser
that the same will be removed on, at or before Closing. Should Seller be
unable to cure (or provide assurances acceptable to Purchaser with respect
to cure) any and all such defects or objections within the thirty (30) day
period, the Purchaser may, at Purchaser's option, (I) extend the period for
cure for an additional twenty (20) days, thereby providing Seller
additional time within which to cure all such defects or objections, at
Seller's expense, (ii) elect to terminate this Agreement and obtain the
return of the Earnest Money Deposit, (iii) waive some or all of its
objections and proceed to Closing; or (iv) seek specific performance of
Seller's obligation to cure.
</PAGE>
8. Closing. Consummation of this sale shall occur not later than July 31,
1996. The Closing will take place at the offices of Security Abstract and
Title Company, Inc., at such date and time as shall be mutually agreed
between the parties.
9. Seller's Deliveries at the Closing. On date of Closing, Seller
shall deliver or cause to be delivered to Purchaser, the following:
9.1 Corporate General Warranty Deed. A Corporate General Warranty
Deed, executed by Seller conveying marketable title to the Land
described in Section 1.1 and the Improvements described in Section
1.2 to Purchaser;
9.2 Bill of Sale. A Bill of Sale in substantially the form of
Attachment A hereto, conveying marketable title to the personal
property described in Section 1.3 to Purchaser;
9.3 Title Insurance. The Title Policy or a binding commitment to
insure, updated to date of Closing.
9.4 Documents for Title Purposes. Documents evidencing the legal
status, standing and authority of Seller, together with such other
documents, including standard Seller's affidavits, that may be
required by Title Company for completion of the Closing or issuance
of the Title Policy pursuant to the Commitment.
9.5 Contracts and Keys. The originals of all contracts and Leases
affecting the Project, all combinations and keys to locks and other
security devices located on the Project and all other items
reasonably requested by the Purchaser relating to the Project to
the extent that the foregoing items are in the possession of Seller
or can be readily obtained by Seller.
9.6 Additional Documents. Such additional documents reasonably
requested by Purchaser to consummate the sale of the Project.
9.7 Accounting of Deposits. A complete and accurate accounting of all
deposits transferred to Purchaser including the amount of each
deposit and the name and address of each depositor.
</PAGE>
10. Purchaser's Deliveries. At the Closing, Purchaser shall deliver or
cause to be delivered to Seller, the following:
10.1 Purchase Price. The Purchase Price in certified, wired or other
immediately available funds.
10.2 Documents for Title Purposes. Such documents evidencing the legal
status, standing and authority of Purchaser and standard
Purchaser's affidavits as may be required by the Title Company for
issuance of the Title Policy.
10.3 Additional Documents. Such additional documents reasonably
requested by Seller to consummate the sale of the Project to the
Purchaser.
11. Possession. Possession of the Project will be delivered by Seller to
the Purchaser on or before the close of business on the Closing Date,
subject to all parties claiming rights to possession pursuant to written or
oral lease agreements in place on date of Closing. Effective on the
delivery of the deed conveying title to the Project by Seller to Purchaser,
beneficial ownership and the risk of loss of the Project will pass from
Seller to Purchaser.
12. Project Management; Employees. On the Closing Date the Seller will
deliver evidence reasonably satisfactory to the Purchaser that the Manager
and all Leasing Agents employed by the Seller with respect to the Project
have been paid all compensation due for services rendered and that all
agreements with respect to management and leasing of the Project have been
terminated and Seller will indemnify Purchaser and hold Purchaser harmless
from same.
13. Costs. The Seller will pay the following Closing costs: the Seller's
attorney fees; one-half of the premium for the Owner's title insurance
policy and one-half of any closing fee. The Purchaser will pay the
following Closing costs: Purchaser's attorney fees; one-half of the costs
relating to the issuance of the Owner's title insurance policy; all
documentary stamps or other tax relating to the documents conveying title
to the Project to Purchaser; the costs of recording all documents; one-half
of any closing fee; and all sales and transfer taxes imposed by the
jurisdiction in which the Project is located, if any.
14. Review Period. Purchaser shall have a period of time (the "Review
Period") from the date hereof to and including July 31, 1996, in which to
conduct a due diligence review of the Project. The scope of the review may
include: business, accounting, financial, legal, and tax aspects of the
business of the Project; the physical condition of the Improvements and
Tangible Personal Property; the nature and extent of the Intangible
Property; environmental aspects of the Land and groundwater; and any other
matter reasonably related to the assets to be conveyed pursuant to this
Agreement or to the business purpose for those assets. The review may
include but is not limited to: financial and accounting review; review of
leases, contracts and other legal documents; review of survey to be
provided to Purchaser by Seller; environmental assessments; and structural
and other physical inspections of the Improvements, and subject to
Purchaser's Board of Directors approval.
</PAGE>
Seller will cooperate fully with Purchaser. Seller will grant
Purchaser and those chosen by Purchaser prompt access to all parts of the
Project and to all records pertaining to the Project and the business of
the Project. Purchaser and those chosen by Purchaser may photocopy any
such records and retain the photocopies.
Subject to the provisions of paragraph twenty-one (21) of this
Agreement, Purchaser shall pay the cost of the review to be conducted
pursuant to this paragraph. Purchaser shall indemnify and hold Seller
harmless from any claim for personal injury or physical damage to property
allegedly arising from Purchaser or those chosen by Purchaser being at the
Project to conduct inspections. Purchaser shall repair any physical damage
caused by such inspections.
In the event that any result of Purchaser's review is unsatisfactory
to Purchaser, in Purchaser's sole discretion, Purchaser may terminate this
Agreement by written notice to Seller, indicating which aspects Purchaser
considers unsatisfactory. Upon delivery of such written notice to Seller,
this Agreement shall terminate automatically, the Earnest Money Deposit
shall be returned to Purchaser, and thereafter the parties will have no
further rights or duties to each other under this Agreement.
15. Adjustments; Prorations. All receipts and disbursements of the
Project will be prorated on the Closing Date as of 12:00 midnight on
the day preceding the Closing Date and the purchase price will be adjusted
on the following basis:
15.1 Disbursements. All sums due for accounts payable and other
obligations which were owing or incurred by the Seller in connection with
the Project prior to the Closing Date will be paid by the Seller and the
Seller agrees to defend, indemnify and hold the Purchaser harmless with
respect thereto. The Purchaser will furnish to the Seller for payment any
bills for such period received after the Closing Date and the Purchaser
will have no further obligation with respect thereto.
15.2 Property Taxes. All real and personal property ad valorem taxes
and installments of special assessments, if any, for the calendar years
preceding the year in which the Closing Date occurs will be paid by the
Seller. All real and personal ad valorem taxes and special assessments, if
any, whether payable in installments or not, for the calendar year in which
the Closing Date occurs will be prorated to the Closing Date, based on the
latest available tax rate and assessed valuation.
15.3 Rents and Other Income. All rents and other revenue and income
shall be prorated to the Closing Date. All deposits shall be transferred
to Purchaser at Closing.
15.4 Utility Charges. All utility charges will be prorated to the
Closing Date and the Seller will obtain a final billing therefor. All
utility security deposits, if any, will be retained by Seller.
</PAGE>
15.5 Project Employees. To the extent the Purchaser elects to employ
any personnel of the Seller engaged in the operation of the Project
subsequent to the Closing Date, all compensation payable, if any, to such
employees (including the cost of fringe benefits and accrued vacation pay)
which accrued prior to the Closing Date will be paid by the Seller. All
compensation payable to such employees which accrues subsequent to the
Closing Date will be paid by the Purchaser.
16. Covenant to Operate. Prior to the Closing Date the Seller agrees to
maintain, repair, manage and operate the Project in a businesslike manner
in accordance with the Seller's prior practices and agrees that the Seller
will not remove any property therefrom or act or omit to act in such a way
as to cause an adverse financial effect on the Project.
17. Other Actions. The Purchaser and Seller agree to perform or cause to
be performed the following:
17.1 Cooperation. After the Closing Date, the Seller will assist the
Purchaser in an orderly transfer of the Project so that the change of
ownership can be accomplished with minimum interference to the efficient
operation of the Project. The Seller will, on the request of the
Purchaser, provide such information with respect to the Project as
reasonably requested by Purchaser.
17.2 Purchaser's Indemnification. After the Closing Date, the
Purchaser agrees to defend, indemnify and hold the Seller harmless from all
damages, liabilities, costs and expenses (including attorneys' fees and
other litigation expenses) arising from: (i) Accounts payable and other
claims relating to the Project which are incurred and which accrued after
the Closing Date or which are specifically assumed in writing by the
Purchaser, (ii) claims by former employees of the Seller whose employment
is continued by the Purchaser to the extent that such claims arise from
occurrences taking place after the Closing Date.
18. Damage or Destruction. In the event any portion of the Project is
damaged or destroyed at any time prior to Closing, Seller shall give
Purchaser prompt notice thereof and, unless Seller shall fully repair and
restore same prior to Closing or unless the parties shall otherwise agree,
Purchaser shall leave the option to terminate this Agreement and receive a
full refund of the Earnest Money Deposit.
</PAGE>
19. Condemnation. In the event any part of the Project is condemned or
threatened with condemnation at any time prior to Closing, Seller shall
give Purchaser prompt notice thereof and Purchaser shall have the option to
terminate this Agreement and receive a full refund of the Earnest Money
Deposit.
20. Representations, Warranties and Covenants of Seller. Seller hereby
represents, warrants, and covenants to Purchaser as follows, which
representations, warranties, and covenants shall survive the Closing:
(a) There is no litigation pending or, after due and diligent inquiry,
to the best of Seller's knowledge, threatened, against Seller, or any basis
therefor, that arises out of the ownership of the Project or that might
detrimentally affect the use or operation of the Project for its intended
purpose or the value of the Project or adversely affect the ability of
Seller to perform its obligations under this Agreement.
(b) Seller will provide Purchaser with true and accurate copies of all
Leases currently in effect, together with all correspondence, etc.,
relating thereto, within five (5) days following the execution hereof by
both parties. Such Leases are not in default except as noted in writing to
Purchaser at the time of the delivery of the Leases to Purchaser.
(c) To the best of Seller's knowledge, there is no hazardous substance
or material. in, on or under the Project.
(d) As of the date hereof and at the time of Closing, there shall be no
outstanding contracts made by Seller for any improvements made to the
Project for which full payment has not been made, and Seller shall cause to
be discharged all mechanics' or materialman' liens arising from any labor
or materials furnished to the Project prior to the time of Closing.
(e) All records and information furnished to Purchaser by Seller or
Seller's agents are true, correct, and complete.
21. Conditions Precedent. Purchaser's obligations to purchase the Project
and to perform the other covenants and obligations to be performed by
Purchaser hereunder shall be subject to the following conditions (which may
be waived, in whole or in part, by Purchaser):
</PAGE>
(a) The representations and warranties made by the Seller shall be true
and correct in all material respects on and as of the Closing, with the
same force and effect as if made on and as of such date, and Seller shall
have performed all covenants and obligations and complied with all
conditions required by this Agreement to be performed and complied with by
Seller on or before the Closing.
(b) Seller shall have furnished to Purchaser, on or before Closing, an
undertaking pursuant to which Seller indemnities and holds Purchaser
harmless from any claims of any nature by any tenant, to the extent such
claims relate or pertain to any period prior to closing.
(c) Should any analysis or test borings or studies obtained by
Purchaser concerning the environmental conditions of the Project disclose
the existence or possibility of the existence of hazardous wastes, toxic
substances, contamination, pollution, or non-compliance with any federal,
state or local law, rule, regulation, order or decree pertaining to the
environment, Purchaser shall have the right to terminate this Agreement
upon written notice given to the Seller. Purchaser shall provide Seller a
copy of any such analyses, borings, studies and test results if Seller so
requests.
</PAGE>
In the event Purchaser terminates this Agreement due to any of the above
reasons, then Seller shall pay the full cost of such analyses, borings and
studies. In the event Purchaser closes the purchase of the Project
hereunder, Purchaser and Seller shall each bear one-half of the expense of
such analyses, borings and studies.
(d) The results of the review pursuant to paragraph fourteen (14) must
be satisfactory to Purchaser.
(e) In the event any of the foregoing conditions shall not be fulfilled
or waived, this Agreement shall terminate and the Earnest Money Deposit
shall be returned to Purchaser.
22. Default; Remedy. In the event that either party fails to perform such
party's obligations hereunder (except as excused by the other party's
default), the party claiming default will make a written demand for
performance.
If Seller fails to comply with such written demand within ten
(10) days after receipt thereof, the Purchaser will have the option
to: (i) waive such default; (ii) terminate this Agreement and receive a
full refund of the Earnest Money Deposit; (iii) seek specific performance;
and/or (iv) seek damages.
If the Purchaser fails to comply with such written demand within ten
(10) days after receipt thereof, the Seller will have the option to waive
such default or to terminate this Agreement; and on such termination, the
Seller will be entitled to retain the Earnest Money Deposit as liquidated
damages arising from such default. The parties agree that the amount of
actual damages which the Seller would suffer as a result of the Purchaser's
default would be difficult to determine and have agreed, after specific
negotiation relating hereto, that the amount of the Earnest Money Deposit
is a reasonable estimate of the Seller's damages and is a fixed amount of
liquidated damages in lieu of other remedies available to the Seller and
does not constitute a penalty.
</PAGE>
23. Attorney's Fees. In the event any dispute hereunder results in
litigation filed by either party against the other, the party in whose
favor the final judgment is rendered shall be entitled to recover its
reasonable litigation expenses and attorneys' fees. The rights and
obligations contained in this Section shall survive the Closing and/or
termination of this Agreement.
24. Brokers. Each party hereby represents to the other that it has not
dealt with any Broker in connection with this transaction, and that to each
party's knowledge no commission is due or owing to any third party as a
result of this transaction. Each party agrees to indemnify, defend and
hold the other party harmless from any claim by any Broker for such
commission which claim is based upon the indemnifying party's actions.
This indemnity shall survive the Closing.
25. Entire Agreement. This document contains the entire agreement of the
Purchaser and Seller relating to the sale of the Project, superseding all
prior agreements whether oral or written. There are no agreements,
understandings, warranties or representations between Purchaser and Seller
except as set forth herein.
26. Amendment. No provision of this Agreement can be changed, waived,
discharged or terminated, except by an instrument in writing signed by the
party against whom enforcement of the change, waiver, discharge or
termination is sought.
27. Notices. Any notices or communication required or permitted under
this Agreement shall be deemed to have been received when delivered
personally, or on the third (3rd) business day after the same is sent by
certified mail, postage prepaid, addressed to the parties as follows:
Seller: Shana J. Hill Executive Director
Woodland Terrace
1500 Terrace
Liberal, KS 67901
Purchaser: Mr. Steven L. Vick, President
Sterling House Corporation
453 South Webb Road, Suite 500
Wichita, KS 67207
</PAGE>
28. Survival of Representations and Warranties. All representations and
warranties o Seller and Purchaser in this Agreement will survive date of
Closing and continue in full force and effect thereafter.
29. Parties Bound. This Agreement shall be binding upon and inure to the
benefit of Seller and Purchaser, and their respective successors and
assigns.
30. Assignment. Purchaser may assign its rights hereunder to an entity
organized for that purpose at the instance of Purchaser or to a third party
for lease-back purposes.
31. Governing Law. The substantive laws of the State of Kansas will
govern the validity, construction and enforcement of this Agreement.
32. Severability. If any clause or provision of this Agreement is invalid
or unenforceable under any present or future law, the remainder of this
Agreement will not be affected thereby. It is the intention of the parties
that it any such provision is held to be invalid, or unenforceable, there
will be added in lieu thereof a provision as similar in terms to such
provision as is possible to be valid and enforceable.
33. Time is of the Essence. Purchaser and Seller hereby expressly agree
that time is of the essence with respect to the performance of each and
every obligation required hereunder.
34. Expiration. Unless this contract is executed by Seller and delivered
to Purchaser before 5 p.m. CDT, June 14, 1996, Purchaser's offer shall
expire.
35. Termites. The property shall be inspected by a licensed termite
treatment company selected by Seller, and at the cost of Seller and a copy
of all inspection reports shall be furnished to Purchaser. If found with
current active termite infestations, the necessary treatment will be made
at the Seller's expense. If said treatment exceeds $750.00, Purchaser
reserves the right to cancel this Agreement or to renegotiate this
Agreement. Determination of results of these inspections shall be effected
as soon as possible but no later than fourteen (14) days prior to the
closing of this transaction.
36. Seller Shall Furnish Documents. Seller agrees to furnish Purchaser
with the following documents for the subject property within five (5) days
from the execution of this contract:
(a) Any environmental studies or information pertaining to asbestos,
soil or water contamination, if any exist, etc.;
(b) All operating statements;
(c) Summary of major improvements.
</PAGE>
IN WITNESS WHEREOF, this instrument has been executed by the parties
on the dates hereafter indicated, to be effective on the date first above
written.
"SELLER"
HIGH PLAINS SENIOR LIVING, INC.
BY:_______________________________
Date
"PURCHASER"
STERLING HOUSE CORPORATION
BY:_____________________________
Date
</PAGE>
BILL OF SALE
WITNESSETH:
WHEREAS, High Plains Senior Living, Inc. (hereinafter referred to as
"Seller"), and Sterling House Corporation, and/or assigned corporation or
partnership (hereinafter referred to as "Purchaser"), have previously
entered into a Real Estate Purchase Agreement dated the day of June, 1996,
which Agreement calls for the purchase and sale of the assets described
herein (the "Purchase Agreement").
NOW, THEREFORE, in consideration of the Closing of the Purchase
Agreement in accordance with the terms thereof, Seller hereby acknowledging
receipt of the consideration called for therein, Seller does hereby grant,
bargain, sell, assign, transfer and deliver unto Purchaser and its
successors and assigns, marketable title to all of the goods and chattels,
and other tangible and intangible assets and property described in
Paragraphs 1.1 to 1.4 of the Purchase Agreement.
Seller hereby covenants that said assets are free and clear from any
encumbrances and that it will warrant and defend the title to said assets
unto the Purchaser and unto Purchaser's heirs, successors and assigns
forever, against claims and demands of all persons.
IN WITNESS WHEREOF, the undersigned has executed this Bill of Sale as
of the day and year set forth below.
HIGH PLAINS SENIOR LIVING, INC.
By:_______________________________
Date
</PAGE>
Exhibit A
ADDENDUM TO REAL ESTATE PURCHASE AGREEMENT DATED JUNE 6, 1996
Acceptance of the Sterling House Corporation proposal dated June 6,
1996, by High Plains Senior Living, Inc. As Seller is subject to the
following terms and conditions:
1. That the first $1,100,000.00 of the Purchase Price shall be used
by Seller in fully repaying all entrance fees and deposits in excess of
$1,000.00 made by individuals to Seller as shown by their individual
contracts. Deposits of $1,000.00 or less held by Seller shall be
transferred to Purchaser at closing. Purchaser shall hold harmless and
indemnify Seller against any claims for such deposits transferred to
Purchaser and only to the extent of the amounts transferred.
2. Bank IV, Liberal, N.A. ("Bank IV") and/or its successor in
interest, being the owner of all the Taxable Multi-Family Housing Revenue
Bonds, Series A, 1993 (High Plains Senior Living, Inc. - 1085617112) in the
original amount of $1,800,000.00 (the "IRBs") accept $1,100,000.00 in full
payment for the sale, transfer and conveyance of the IRBs to Seller free
and clear of all liens or encumbrances. Thereafter, Purchaser may, at its
option, accept the IRBs and an assignment of the lease of the Project in
lieu of title to the Project, or Seller and Purchaser shall cooperate to
acquire a conveyance of title from the City of Liberal, Kansas to
Purchaser. This contingency to be satisfied on or before July 12, 1996
insofar as Bank IV is concerned by its agreement to accept the proposed
payment amount.
3. Purchaser agrees to pay 100% of the cost of title insurance,
property survey, and will pay sellers closing costs not to exceed
$2,000.00. Costs of title insurance and survey shall be approved by
purchaser prior to commencement of work.
4. That all individuals who have previously paid to Seller entrance
fees and/or deposits sign and deliver general releases, acceptable to the
respective recipients of such release, releasing Seller, First National
Bank of Liberal, Kansas, and Bank IV, together with their respective
officers, agents, directors and employees, past and present, from any and
all liability with respect to any claim for damages or breach of contract
or other claims of any nature arising from or relating to the Project, and
that Seller, Bank IV and First National Bank of Liberal, Kansas exchange
mutual releases, acceptable to all, releasing one another and their
respective officers, agents, directors and employees, from any and all
liability with respect to any claim for damages or breach of contract or
other claims of any nature arising or relating to the Project. The release
required by this paragraphs all be fully executed and delivered to the
closing agent within seven (7) days after satisfaction of contingency No. 2
above.
5. That Purchaser shall honor Seller's agreement no to increase the
rent for a period of one year from their occupancy date, for those
individuals appearing on Exhibit 1 attached hereto, provided that services
delivered remains the same. If additional services are provided or
needed, seller shall charge for such a additional services.
6. Seller agrees to honor the accumulated vacations of staff members
as shown on Exhibit 2 attached hereto, in accordance with Seller's existing
policy, to the extent that said vacations have not been taken prior to
closing.
7. That First National Bank of Liberal, Kansas, in consideration of
the releases herinbefore described, shall forgive all indebtedness owned to
it by Seller, and shall cause to be filed of record a release of its
mortgage and/or assignment of Lease covering the Project and will terminate
the Financing Statement covering the personal property of Seller.
8. That the following language be added to Section 20(a) of the
Agreement.
(delete period) except those which may arise from Seller's
defaults on lease payments, IRB obligations, and debt to First National
Bank of Liberal, Kansas, which defaults have been disclosed to Purchaser.
9. This Addendum is hereby incorporated into the Agreement. Terms
defined in the Agreement shall have the same meanings when appearing in
this Addendum.
This Addendum has been executed on the dates shown below.
"Seller"
High Plains Senior Living, Inc.
By______________________________
Date
"Purchaser"
Sterling House Corporation
By:____________________________
Date
</PAGE>
Exhibit 1
Woodland Terrace
Resident-Guaranteed One Year Rent List
<TABLE>
<CAPTION>
<S> <C> <C>
Date of Occupancy Resident Name Apt # & Type
02/21/96 D. Gorman #223 E
07/01/95 L. Haddock #220 O
06/06/96 E. Harp #111 B
07/24/95 M. Herrick #112 E
10/15/96 M. Herrick #224 B
05/17/96 M. Osborn #216 C
03/01/96 B. Powell #217 O
11/01/95 B. Weybright #218 O
</TABLE>
Vacation
Employees who have been at Woodland Terrace for one year and have
accumulated vacation time
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Emp Act hrs to take Act hrs taken Vac accumulated Vac Hours Total Vac
Name Date Pay Hours Total Hours Total Hours Total Hours Total Pay
Buxton 05/23/94 7.50 0.00 0.00 0.00 0.00 4.95 37.12 3.68 27.60 64.72
Friday 03/18/95 5.50 6.72 36.96 6.72 36.96 4.86 26.73 1.84 10.12 36.85
Hill 03/13/95 Salary 1250.00 0.00 468.75 156.25 1875.00
Helms 04/01/95 8.50 36.84 313.14 36.84 313.14 12.20 103.70 3.68 31.28 134.98
Perez 10/18/94 9.50 0.00 0.00 0.00 0.00 31.94 303.43 3.68 34.96 338.39
Shelton 05/23/94 Salary 833.32 69.42 69.42 138.84
Shain 05/23/94 6.50 37.62 244.53 0.00 0.00 3.55 23.07 3.50 22.75 290.35
Total 2,879.13
</TABLE>
To figure vacation time: Total regular hours are added and then divided by
50 to get the hours.
(One hour paid vacation per 50 hours worked).
Total Vacation time for employees one year and over equals $2,879.13
Total Vacation time for employees under one year equals $ 812.12
---------
Total $3,691.25
Exhibit 1
</PAGE>
Vacation
Employees who have not been at Woodland Terrace one year, but who have
accumulated Vacation hours that will be available upon their one year
Anniversary date.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Act hrs earned Est hrs earned
up to 6/30 July 1-31 Est Hrs earned toward
Name Date Hours Pay Total Hours Pay Total one yr Ann as of July 31
Hahn 01/01/96 1.86 5.00 9.30 .50 6.00 3.00 12.30
Huebner 10/04/95 15.92 6.00 95.52 .30 6.00 1.80 97.32
Means 07/14/95 37.10 6.00 222.60 3.90 6.00 23.40 246.00
Munoz 10/12/95 25.25 6.00 151.50 2.50 6.00 15.00 166.50
Rollo 01/06/96 17.48 6.00 104.88 3.81 6.00 22.86 127.74
Still 03/22/96 10.34 6.50 67.21 3.36 6.50 21.84 89.05
Whitcomb 05/29/96 3.68 5.00 18.40 1.92 5.00 9.60 28.00
Williams 01/26/96 3.07 5.00 15.35 0.00 5.00 0.00 15.35
Amerin 06/25/96 .28 5.00 1.40 3.10 5.00 15.56 16.96
Beer 06/24/96 .41 5.00 2.05 1.06 5.00 5.30 7.35
Smith 06/22/96 .37 5.00 1.85 .74 5.00 3.70 5.55
Total 812.12
</TABLE>
To figure vacation time: Total regular hours are added and then divided by
50 to get the hours.
(1 hour paid vacation per 50 hours worked.)
Exhibit 2
<PAGE>
For: Sterling House Corporation
Contact: Gail Knott
Chief Financial Officer
(316) 684-8300
Investor Relations:
Robert P. Jones/Jill Ruja
Media Contact: Michelle Zawrotny
STERLING HOUSE CORPORATION ANNOUNCES
ACQUISITION OF 45 UNIT FACILITY
Wichita, Kansas, August 2, 1996 - Sterling House Corporation
(AMEX:SGH) today announced the acquisition of an existing
retirement and assisted living facility located in Liberal,
Kansas. The two year old facility has 45 private units ranging from studios to
two-bedroom apartments. The purchase price was $2.2 million.
Commenting on the new facility, Timothy Buchanan, Chairman and Chief
Executive Officer, stated "The acquisition of this new facility is consistent
with our expansion plans as we continue to locate new opportunities in the
marketplace. In addition, we intend to implement the Sterling service program
and extend the current services that are provided."
Sterling House Corporation constructs, owns, operates, manages and
franchises Sterling House assisted living residences. The Company's operations
provide elderly residents with a broad range of cost-effective health care and
personal support services on a 24-hour basis, enabling them to maintain
independent and dignified lifestyle in a residential home-like setting.
Sterling House currently operates 33 residences containing 1,066 units in
Kansas, Oklahoma and Texas with construction and development activity on 60
residences in Oklahoma, Texas, Colorado, Ohio and Florida.
