EXHIBIT 10.67
PURCHASE AGREEMENT
BETWEEN
OMEGA HEALTHCARE INVESTORS, INC.
AND
GAINESVILLE HEALTH CARE CENTER, INC.
REST HAVEN NURSING CENTER (CHESTNUT HILL), INC.
CLAREMONT INTEGRATED HEALTH, INC.
RIKAD PROPERTIES, INC.
INTEGRATED MANAGEMENT-GOVERNOR'S PARK, INC.
AND
LYRIC HEALTH CARE LLC
AND
LYRIC HEALTH CARE HOLDINGS, INC.
DATED: AS OF JANUARY 13, 1998
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (the "Agreement") is executed and delivered as
of this 13th day of January, 1998 (the "Effective Date") by and between the
entities described on attached EXHIBIT A (each a "Seller" and collectively,
"Sellers"), LYRIC HEALTH CARE LLC, a Delaware limited liability company
("Lyric"), LYRIC HEALTH CARE HOLDINGS, INC., a Delaware corporation ("Lyric
Holdings") and OMEGA HEALTHCARE INVESTORS, INC., a Maryland corporation
("Purchaser").
The circumstances underlying the execution and delivery of this
Agreement are as follows:
A. Capitalized terms used but not otherwise defined herein have the
respective meanings given them in Article I below.
B. Lyric Holdings is a wholly owned subsidiary of Lyric.
X. Xxxxxxx are corporations that are wholly owned by Lyric Holdings.
IHS is the sole member of Lyric. Sellers also are the respective owners of
Sellers' Assets. Sellers desire to sell, and Purchaser desires to acquire,
Sellers' Assets on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, Sellers and Purchaser agree as follows:
ARTICLE I
DEFINITIONS
The following terms shall have the respective meanings given them
below:
"Admission Agreements" means the admission agreements entered into by
the respective Sellers with the current residents/patients of the respective
Facilities.
"Charter Documents" means the articles of incorporation, certificate of
formation, operating agreement, bylaws, resolutions, minutes and other material
documents that govern the organization of the applicable Seller, Lyric, Lyric
Holdings or Purchaser, as the case may be.
"Claim" means a claim for indemnification pursuant to Section 16.01 or
Section 16.02 of this Agreement.
"Closing" means the consummation of the transactions contemplated by
this Agreement.
"Closing Date" means the Effective Date.
"Consent and Subordination Agreement" means the agreement to be
executed between Manager, Franchisor, Lyric Holdings, the Subsidiaries of Lyric
Holdings to which the Facilities are to be subleased and Purchaser pursuant to
which certain management and franchise fees payable under the Facility
Management Agreement are subordinated to Purchaser's rights under the Master
Lease upon an Event of Default under the Master Lease.
"Consumables" means the food and other consumable inventories located
at the Facilities on the Closing Date.
"Controversy" means a controversy between any Seller and Purchaser that
(a) arises following the Closing Date, (b) relates to this Agreement, any other
agreement between any Seller and Purchaser, any instrument or document delivered
pursuant to or in connection with this Agreement or the transactions
contemplated by this Agreement and (c) the applicable Seller and Purchaser are
unable to settle between themselves.
"Deferred Maintenance Adjustment" means, with respect to each Facility,
the amount set forth opposite such Facility's name on attached SCHEDULE 1(A) to
cover the potential costs to be incurred after the Closing in making the repairs
or modifications required at such Facility and described on attached SCHEDULE
1(A).
"Effective Date" means the date set forth in the Preamble of this
Agreement.
"Environmental Remediation" means, with respect to each Facility, the
work described opposite such Facility's name on attached SCHEDULE 1(B) to be
performed after the Closing for the investigation and/or remediation of the
environmental conditions at such Facility described on attached SCHEDULE 1(B).
"Environmental Laws" means any and all applicable local, state and
federal governmental laws, rules, regulations, ordinances, administrative orders
and requirements relating to environmental and/or occupational health and safety
matters.
"Escrow Agent" means Fidelity National Title Insurance Company of New
York.
"Escrow Agreement" means the agreement between Sellers, Lyric Holdings,
Purchaser and Escrow Agent pursuant to which the Deferred Maintenance Adjustment
is to be held and disbursed.
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"Facilities" means the Real Property and Personal Property constituting
the skilled nursing facilities listed on attached SCHEDULE 1(C).
"Facility" means any of the Facilities.
"Facility Franchise Agreement" means a franchise agreement, in form and
substance satisfactory to Purchaser and Lyric, to be executed by a Seller and
Franchisor, pursuant to which Franchisor grants to such Seller the right to use
Franchisor's names, marks, systems and proprietary information.
"Facility Management Agreement" means a management agreement, in form
and substance satisfactory to Purchaser and Lyric, to be executed by a Seller
and Manager, pursuant to which Manager agrees to manage the Facility leased by
such Seller pursuant to the Master Lease.
"Franchisor" means Integrated Health Services Franchising Co., Inc., a
Delaware corporation, which is a Subsidiary of IHS.
"GAAP" means generally accepted accounting principles.
"Guaranty" means a Guaranty, in form and substance satisfactory to
Purchaser and Lyric, executed and delivered by Lyric to Purchaser concurrently
with the execution and delivery of the Master Lease, pursuant to which Lyric
guarantees to Purchaser the payment and performance by the respective Sellers of
their respective obligations under the Master Lease.
"Hazardous Substances" means any materials, substances or wastes deemed
to be hazardous or toxic under any applicable Environmental Laws.
"IHS" means Integrated Health Services, Inc., a Delaware corporation.
"IHS Indemnity" means an indemnity agreement to be executed by IHS in
the form of attached SCHEDULE 1(D).
"Indemnified Person" means a person entitled to indemnification
pursuant to Article XVI of this Agreement.
"Indemnitor" means a person responsible for indemnifying an Indemnified
Person pursuant to Article XVI of this Agreement.
"Intangible Property" means (a) all transferable consents,
authorizations, variances or waivers, licenses, permits and approvals given or
issued by any governmental or quasi-governmental agency, department, board,
commission, bureau or other entity or
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instrumentality having jurisdiction over the respective Facilities; and (b) all
rights to use the names of the Facilities set forth on attached SCHEDULE 1(E),
but excluding any right to use the name "Integrated" or the name "Integrated
Health Services".
"MAI Appraisal" means, with respect to each Facility, an appraisal, in
form and substance satisfactory to Purchaser, prepared by an appraiser who is a
Member of the Appraisal Institute and is experienced in appraising properties of
the same nature, and in the same geographical vicinity, as the Facility.
"Manager" means IHS Facility Management, Inc., a Delaware corporation,
which is a Subsidiary of IHS.
"Master Franchise Agreement" means a Franchise Agreement, in form and
substance satisfactory to Purchaser and Lyric, to be executed by Franchisor and
Lyric, pursuant to which Franchisor grants to Lyric the right to use
Franchisor's names, marks, systems and proprietary information.
"Master Lease" means a Master Lease, in form and substance satisfactory
to Purchaser and Lyric, executed and delivered by Purchaser and Lyric Holdings,
concurrently with the Closing, pursuant to which Purchaser leases to Lyric
Holdings, and Lyric Holdings leases from Purchaser, the respective Facilities.
"Master Management Agreement" means a management agreement, in form and
substance satisfactory to Purchaser and Lyric, to be executed by Lyric and
Manager, pursuant to which Manager agrees to manage the Facilities.
"Permitted Encumbrances" means, with respect to each Facility, the
matters set forth beneath such Facility's name on attached SCHEDULE 1(F) and
those undischarged mortgages on the Facilities that the Title Company has
expressly insured over in the Title Insurance Policy .
"Personal Property" means all equipment, furniture, fixtures, inventory
(including linens, dietary supplies and housekeeping supplies, but specifically
excluding food and other consumable inventories) and other tangible personal
property owned (but not leased) by a Seller and located on the Real Property and
Facility owned by it, including, but not limited to, patient records, patient
care plans, motor vehicles, entitlements, telephone numbers and those items of
personal property listed on attached SCHEDULE 1(G), but excluding (a) cash, cash
equivalents or accounts receivable and (b) those items of personal property
identified on attached SCHEDULE 1(H).
"Property Documents" means the following, if existing and currently in
the possession or under the reasonable control of Sellers or Lyric: all
Admission
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Agreements; environmental reports; structural reports and geological reports;
governmental licenses, permits and approvals; service and maintenance contracts;
existing surveys of the Real Property, including any as-built surveys for the
improvements; wetland reports; soils reports; architectural drawings, plans and
specifications; and engineering tests and reports.
"Purchase Price" means the sum of Forty Four Million Nine Hundred
Thousand ($44,900,000.00) Dollars.
"Real Property" means the real property described on attached SCHEDULE
1(I), together with (a) any buildings and other improvements located thereon;
(b) all rights of Sellers in and to all air, mineral and riparian rights and all
tenements, hereditaments, privileges and appurtenances belonging or in any way
appertaining thereto; (c) any land lying in the bed of any street, road or
avenue adjoining the real property described on attached SCHEDULE 1(I) to the
center line thereof, but only to the extent of the respective Sellers' interest,
if any, therein; and (d) all easements, whether or not recorded, strips and
rights-of-way abutting, adjacent to, contiguous with or adjoining the real
property described on attached SCHEDULE 1(I), but only to the extent of the
respective Sellers' interest, if any, therein.
"Security Agreement" means a Security Agreement, in form and substance
satisfactory to Purchaser and Lyric, pursuant to which Sellers and Lyric
Holdings grant to Purchaser a security interest in the Personal Property and
Intangible Property in order to secure the obligations of Lyric Holdings under
the Master Lease.
"Seller Financial Statements" means the financial statements for
Sellers and the respective Facilities requested by Purchaser and relating to the
operations of the Facilities and of Seller for the fiscal years 1994, 1995 and
1996 and for the first three fiscal quarters of 1997.
"Seller Licenses" means if and as applicable all material licenses,
permits and authorizations necessary for the lawful operation of the respective
Facilities, as the Facilities currently are operated, including all licenses,
permits and authorizations necessary to (a) lawfully operate all beds contained
in the Facilities as nursing home beds; (b) provide licensed nursing services
and any other services currently provided at the respective Facilities; and (c)
receive payment under the Medicare and applicable state Medicaid programs.
"Sellers' Assets" means the Real Property, the Facilities, the Personal
Property and the Intangible Property.
"Subsidiary" means a corporation that is directly or indirectly wholly
owned by IHS.
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"Survey" means, with respect to a Facility, a survey that (a) is
certified to Purchaser, the applicable Seller, Lyric and the Title Company; (b)
is prepared in accordance with the minimum standard detail requirements and
classifications for ALTA/ASCM land title surveys, as adopted in 1992 by
ALTA/ASCM, including Table A responsibilities and specifications 1-4, 6-11 and
13; and (c) otherwise is in form satisfactory to Purchaser.
"Title Commitment" means, with respect to a Facility, a title insurance
commitment, issued by the Title Company, dated after the date of this Agreement
and committing the Title Company to insure Purchaser's fee simple title to the
applicable Facility, without the so-called "standard exceptions", in the amount
of the portion of the Purchase Price allocated to such Facility pursuant to
Section 17.02 of this Agreement, together with legible copies of all recorded
documents referred to therein.
"Title Company" means Fidelity National Title Insurance Company of New
York.
"Title Insurance Policy" means, with respect to a Facility, a title
insurance policy, issued pursuant to the applicable Title Commitment by the
Title Company concurrently with the Closing, that insures Purchaser's fee simple
title to the applicable Facility, without the so-called "standard exceptions",
and subject only to the Permitted Encumbrances. Each Title Insurance Policy
shall include the following endorsements, to the extent available under the law
of the state in which the applicable Facility is located: (a) Form 3.1 completed
zoning endorsement; (b) comprehensive endorsement; (c) access endorsement; (d)
survey endorsement; (e) separate tax parcel endorsement; (e) contiguity
endorsement (if the Real Property on which the applicable Facility is located
consists of more than one parcel); and (f) such other endorsements as Purchaser
reasonably may require. The Title Insurance Policies as accepted by Purchaser at
the Closing shall be deemed satisfactory to Purchaser.
"UCC Search Report" means a UCC search report in the name of the
applicable Seller and Facility conducted at the state and county level in the
state in which the applicable Facility is located and, if different, in the
state in which the applicable Seller is organized and in the state in which the
applicable Seller's chief executive office is located.
ARTICLE II
PURCHASE AND SALE
2.01 Agreement to Sell and Buy. On the terms and subject to the
conditions set forth herein, Sellers agree to sell to Purchaser, and Purchaser
agrees to acquire from Sellers, Seller's Assets.
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2.02 No Assumption of Liabilities. Except as specifically set forth in
this Agreement, Purchaser is not acquiring or assuming any liabilities
whatsoever, including, without limitation, those of Sellers with respect to
Sellers' Assets.
2.03 "As Is" Purchase. Purchaser is acquiring Sellers' Assets without
any express or implied warranties other than those specifically set forth in
this Agreement.
ARTICLE III
PURCHASE PRICE
The Purchase Price shall be payable at the Closing by wire transfer in
accordance with wire transfer instructions to be provided by Lyric and Sellers.
The Purchase Price shall be allocated among the Facilities as set forth in
Paragraph 17.02. Sellers and Purchaser agree that, for purposes of this
Agreement, no portion of the Purchase Price shall be allocated to the Personal
Property or the Intangible Property.
ARTICLE IV
CLOSING
The purchase and sale of Sellers' Assets shall occur on the Closing
Date at the offices of LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P., 000 Xxxx 00xx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
ARTICLE V
COSTS AND PRORATIONS
The costs of the transaction and the expenses related to the ownership
and operation of the Sellers' Assets shall be allocated among Sellers and
Purchaser as follows:
5.01. Transfer Taxes; Sales Taxes. Sellers shall pay all State and
County transfer or excise taxes due on the transfer to Purchaser of title to the
Real Property and the respective Facilities and all assessments and taxes
related to the recording of the corresponding deeds. Sellers shall pay any sales
tax due on the transfer to Purchaser of title to the Personal Property, although
the parties believe no such tax is due.
5.02 MAI Appraisals. Sellers shall pay the cost of the MAI Appraisals
delivered by Sellers to Purchaser.
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5.03. Title Insurance. Sellers shall pay the cost of the Title
Commitments and the premium for the Title Insurance Policies (and any leasehold
policies desired by Sellers and Lyric Holdings) for the respective Facilities.
5.04. Surveys/ UCC Search Reports. Sellers shall pay the cost of the
Surveys and the UCC Search Reports for the respective Facilities.
5.05. Environmental Reports/Remediation. Sellers shall pay for the cost
of Phase I environmental assessments for the respective Facilities, for any
additional assessments recommended in the original Phase I environmental
assessments, and for the cost of the remediation agreed upon by the parties as
set forth on Schedule 1(b). Sellers shall cause the Phase I environmental
assessments and any additional assessments or reports provided by Sellers to be
certified to Purchaser for reliance by Purchaser thereon.
5.06. Attorneys' Fees. Sellers shall pay its attorneys' fees and the
reasonable and documented attorneys' fees of Purchaser.
5.07. Recording Costs. Sellers shall pay all recording fees related to
the recording of the deeds.
5.08. Releases. Sellers shall pay the cost of obtaining and recording
any releases necessary to deliver title to Sellers' Assets in accordance with
the terms of this Agreement.
5.09. Deferred Maintenance Adjustment. At the Closing, each Seller
shall deposit into escrow with the Escrow Agent the Deferred Maintenance
Adjustment attributable to the Facility currently owned by it.
5.10. Inspection Fee; Commitment Fee. At the Closing, Sellers shall pay
to Purchaser a commitment fee equal to an aggregate of Two Hundred Twenty Four
Thousand Five Hundred ($224,500.00) Dollars; provided, however, that Sellers
shall be entitled to a credit for an inspection fee equal to Sixty Thousand
($60,000.00) Dollars previously paid to Purchaser.
5.11. Other Items. Purchaser has no duty to operate any Facility from
and after the Closing Date, such operations to be accomplished solely by the
applicable Seller, as sublessee of Lyric Holdings under a Facility Sublease,
subject to the provisions of the Master Lease, or by Manager pursuant to the
Facility Management Agreement. Accordingly, each Seller shall be responsible for
(a) all revenues and expenses attributable to the Facility owned by it, whether
attributable to the period before or after the Closing; (b) real and personal
property taxes, assessments and similar charges that are levied against the
Facility currently owned by it, whether attributable to the period before or
after the Closing Date; (c) all utilities provided to the Facility currently
owned by it, whether before or after the Closing Date; and (d) any amounts that
have been prepaid, or
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that remain to be paid, under any of the Admissions Agreements or any other
contracts affecting Sellers' Assets.
ARTICLE VI
POSSESSION
At Closing, Purchaser shall be entitled to possession of Sellers'
Assets, subject only to (a) the rights of the patients and residents of the
respective Facilities, (b) any possessory rights granted to any person under the
Permitted Encumbrances and (c) the rights of Lyric Holdings under the Master
Lease.
ARTICLE VII
SELLERS' REPRESENTATIONS AND WARRANTIES
Each Seller represents and warrants to Purchaser, as of the Closing
Date, that:
7.01. Status of Seller. It is a corporation duly organized, validly
existing and in good standing under the laws of the state set forth opposite its
name on EXHIBIT A. If the Facility owned by it is located in a state other than
the state in which it is organized, it is duly qualified to do business as a
foreign corporation in the state in which the Facility owned by it is located.
7.02. Validity and Conflicts. This Agreement is, and all documents to
be executed by it pursuant to this Agreement will be, its valid and binding
obligations, enforceable against it in accordance with their respective terms,
except as the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to the enforcement of
creditors' rights generally and by general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
The execution of this Agreement and the consummation of the transactions
contemplated in this Agreement in accordance with its terms have been approved
by all necessary action of such Seller under its Charter Documents and do not
and will not result in a breach of the terms and conditions of, nor constitute a
default under or violation of, such Seller's Charter Documents or any law,
regulation, court order, mortgage, note, bond, indenture, agreement, license or
other instrument or obligation to which such Seller is now a party or by which
any of Sellers' Assets owned by it may be bound or affected.
7.03. Authority. It has full power and authority to execute and to
deliver this Agreement and all related documents and to carry out the
transactions contemplated herein and therein. It has full power and authority
(a) to own and operate the Facility
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owned by it as the same currently is owned and operated by it and (b) to conduct
its business as the same currently is being conducted.
7.04. Seller Financial Statements. It has delivered to Purchaser true
and correct copies of the Seller Financial Statements applicable to it and the
Facility owned by it. Except as otherwise noted in such Seller Financial
Statements or on attached SCHEDULE 7.04, the Seller Financial Statements
delivered by it to Purchaser have been prepared in accordance with GAAP,
consistently applied, and fairly represent the financial condition, and
accurately set forth in all material respects, as and to the extent required by
GAAP, the results of the operations, of the applicable Seller and the Facility
owned by it for the periods covered thereby, subject to customary year end
adjustments. Seller has delivered to Purchaser any financial statements prepared
by such Seller subsequent to the date of the Seller Financial Statements
delivered by it to Purchaser, and such financial statements represent fairly the
financial condition, and set forth accurately in all material respects the
results of the operations, of the Facility owned by it for the periods covered
thereby.
7.05. Absence of Adverse Change. Since the date of the Seller Financial
Statements delivered by it to Purchaser, there has not been any material adverse
change in the financial condition, business, assets, liabilities, results of
operations or prospects of such Seller or of the Facility owned by it, whether
in the ordinary course of business or otherwise.
7.06. The Licenses. It has all Seller Licenses applicable to the
Facility owned by it. Attached as SCHEDULE 7.06 are true and correct copies of
the licenses issued most recently by the applicable health care authorities with
respect to the operation of the Facility owned by it. To Seller's knowledge, it
has not received written or verbal notice (a) that any action or proceeding has
been initiated or is proposed to be initiated by the appropriate state or
federal agency having jurisdiction thereof, to revoke, withdraw or suspend any
of the Seller Licenses applicable to the Facility owned by it or to terminate
the participation of the Facility owned by it in either the Medicare or Medicaid
Programs or (b) of any judicial or administrative agency judgment or decision
not to renew any of the Seller Licenses applicable to the Facility owned by it
or (c) of any licensure or certification action of any other type applicable to
the Facility owned by it.
7.07. Compliance with Law.
(a) SCHEDULE 7.07(A) sets forth the most recent licensure or
certification survey for the Facility owned by such Seller. A copy of
each such licensure or certification survey has been delivered to
Purchaser. To Seller's knowledge, the Facility owned by such Seller and
its current operation and use comply with all applicable municipal,
county, state and federal laws, regulations, ordinances and orders and
with all applicable municipal health and building laws and regulations
(including, without limitation, the building and life safety codes),
except to the extent
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that the failure to comply therewith would not have a material adverse
effect on the business, property, condition (financial or otherwise) or
operation thereof;
(b) To Seller's knowledge, no governmental authority having
jurisdiction over any Facility owned by it has issued any citations
with respect to any deficiencies or other matters that fail to conform
to any applicable statute, regulation, ordinance or bylaw and that have
not been corrected as of the date hereof or that shall not have been
corrected on or prior to the Closing, except to the extent that either
(i) a waiver has been issued by the appropriate authority, in which
case a copy of such waiver is included in SCHEDULE 7.07(B), or (ii) the
deficiency or non-conformity will not have a material and adverse
effect on the financial condition or results of the operations of the
affected Facility;
(c) To Seller's knowledge, such Seller has not received
written or oral notice from any licensing or certifying agency
supervising or having authority over the Facility owned by it,
requiring it to be reworked or redesigned or additional furniture,
fixtures, equipment or inventory to be provided at the Facility so as
to conform to or comply with any existing and applicable law, code or
standard, except where the requirement either (i) has been fully
satisfied prior to the Closing Date, (ii) will, as of the Closing Date,
be in the process of being satisfied in the ordinary course of such
Seller's business pursuant to the terms of a Plan of Correction or
other documentation submitted to and approved by the appropriate
authority or (iii) will, as of the Closing Date, be the subject of a
valid written waiver issued by the applicable licensing or certifying
agency; and
(d) It has no knowledge that the Facility owned by it and
participating in the Medicare or Medicaid Programs is not in
substantial compliance with all Conditions and Standards of
Participation in those Programs, except as set forth in SCHEDULE
7.07(D).
7.08. Residents. Except for notice provisions that are required by law
or that are contained in the Admissions Agreements provided to Purchaser by such
Seller with respect to the Facility owned by such Seller, there are no
agreements with residents or patients of any of the Facility owned by such
Seller that are not terminable by such Seller at will and that require such
Seller to provide the care routinely provided at the Facility for the duration
of the resident's stay at the Facility for no consideration.
7.09. Books and Records. All of the books and records of the Facility
owned by such Seller, including resident records, patient trust fund records and
records concerning all resident prepaid accounts, are true and correct in all
material respects.
7.10. Taxes and Tax Returns. All tax returns, reports and filings of
any kind or nature that such Seller is required to file, prior to the Effective
Date of this Agreement, with
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respect to or affecting the Facility owned by it have been properly completed
and timely filed, or extensions for the filing thereof have been timely secured,
with all such filings being in material compliance with all applicable
requirements and all taxes due with respect to such Seller have been timely
paid.
7.11. Environmental Issues. To Seller's knowledge, it has not released
into the environment or discharged, placed or disposed of any Hazardous
Substances or caused the same to be so released into the environment or
discharged, placed or disposed of at, on or under the Facility owned by it,
except (a) to the extent the same will not have a material and adverse affect on
the condition, financial or otherwise, of the Facility and (b) in accordance,
and in compliance, with any and all applicable Environmental Laws. To Seller's
knowledge, (a) no Hazardous Substances are located on or at the Facility owned
by such Seller or have been released into the environment or discharged, placed
or disposed of in, on or under the Facility owned by such Seller, except to the
extent permitted by applicable Environmental Laws, (b) no underground storage
tanks are or have been located at the Facility owned by such Seller except for
those that have been closed in accordance with applicable Environmental Laws, or
currently are being maintained, in accordance with applicable Environmental
Laws, (c) none of the Facilities owned by it is located on property that has
been used as a dump for waste material and (d) each of the Facilities owned by
it complies with, and at all times during the period of its operation by such
Seller has complied with, all Environmental Laws in all material respects. To
Seller's knowledge, such Seller has not received from any governmental authority
or third party written notice or a written complaint alleging the failure of the
Facility owned by such Seller to comply with, or the potential liability of such
Seller as a result of the noncompliance of the Facility owned by such Seller
with, any Environmental Laws or, if such Seller has received such a written
notice or written complaint from any governmental authority or third party, the
alleged noncompliance of the affected Facility and/or liability of such Seller
with respect thereto has been resolved as of the Closing Date. Such Seller has
made available to Purchaser all written assessments that have been prepared by
or on behalf of such Seller and that are in such Seller's possession or under
such Seller's reasonable control with respect to the hazardous waste conditions
at the Facilities. Notwithstanding the foregoing, the foregoing representations
and warranties are subject to any environmental condition existing at any of the
Facilities of which Purchaser receives notice pursuant to the information
provided to it in any environmental assessment prepared in connection with the
purchase of the Facilities or in the Phase I environmental assessment reports
identified on attached SCHEDULE 7.11, which Seller previously has delivered to
Purchaser.
7.12. Necessary Action. Such Seller has duly and properly taken or
obtained or caused to be taken or obtained all action necessary for such Seller
(a) to enter into and to deliver this Agreement and any and all documents and
agreements executed by such Seller in connection herewith and (b) to carry out
the terms of this Agreement and the transaction contemplated by it. No other
action by or on behalf of such Seller is or will be
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necessary to authorize the execution, delivery and performance of this Agreement
and any documents and agreements executed or to be executed by such Seller in
connection herewith or to authorize the transactions contemplated by this
Agreement. No consent of any third party is or will be necessary in connection
with the execution, delivery and performance of this Agreement and any documents
and agreements executed or to be executed by such Seller in connection herewith
or in connection with the consummation of the transactions contemplated by this
Agreement.
7.13. Litigation. Except as set forth in SCHEDULE 7.13, to Seller's
knowledge, such Seller has received no written notice or demand of any
litigation, administrative investigation or other proceeding that is pending or
threatened with respect to or affecting the Facility owned by such Seller,
except where the amount claimed is covered by insurance or, if not covered by
insurance, is less than $50,000 in any single action or $100,000 in the
aggregate. Such Seller is not a party to, nor is such Seller or the Facility
owned by it bound by, any orders, judgments, injunctions, decrees or settlement
agreements under which it or they may have continuing obligations as of the date
hereof or as of the Closing Date and that are likely to materially restrict or
affect the present business operations of the Facility owned by such Seller. To
Seller's knowledge, the right or ability of such Seller to consummate the
transaction contemplated herein has not been challenged by any governmental
agency or any other person.
7.14. Sensitive Payments. To Seller's knowledge, such Seller has not
(a) made any contributions, payments or gifts to or for the private use of any
governmental official, employee or agent where either the payment or the purpose
of such contribution, payment or gift is illegal under the laws of the United
States or the jurisdiction in which made, (b) established or maintained any
unrecorded fund or asset for any purpose or made any false or artificial entries
on its books, (c) given or received any payments or other forms of remuneration
in connection with the referral of patients that would violate the
Medicare/Medicaid Anti-kickback Law, Section 1128(b) of the Social Security Act,
42 USC Section 1320a-7b(b), or any analogous state statute, or (d) made any
payments to any person with the intention or understanding that any part of such
payment was to be used for any purpose other than that described in the
documents supporting the payment.
7.15. Title. Such Seller has good title to the Facility identified
opposite such Seller's name on attached SCHEDULE 1(C), free and clear of all
liens, charges and encumbrances other than the Permitted Encumbrances and any
other items reflected in the Title Commitment, Survey and UCC Search Report
relating to the Facility. Such Seller has good title to the remainder of
Sellers' Assets relating to the Facility identified opposite such Seller's name
on attached SCHEDULE 1(C), free and clear of all liens, charges and encumbrances
other than equipment leases or other purchase money financing to acquire the
same. Purchaser agrees that prior to asserting any claim against a Seller or
Guarantor for damages suffered (including, without limitation, costs and
expenses incurred) as a result of an alleged breach of the foregoing warranty
and representation with respect to
14
title to the Real Property, Purchaser shall diligently and in good faith seek to
recover such damages from the Title Company, and the liability of Sellers and
Guarantor as to such damages shall be limited to the amount thereof that
Purchaser is unable to recover from the Title Company.
7.16. The Facilities. The Facility owned by such Seller is duly
licensed to operate the number of beds set forth opposite its name on SCHEDULE
1(C) and is duly certified to participate in Medicare and Medicaid. The Personal
Property relating to the Facility owned by such Seller is all of the property
necessary for the lawful operation of the Facility owned by such Seller at its
current occupancy levels and for the provision of services provided at the
Facility owned by such Seller. To Seller's knowledge, the building and
improvements constituting the Facility owned by such Seller have been
constructed in compliance with the requirements of all laws at the time of
construction and all ordinances, rules, regulations and restrictions of record
applicable thereto, and all bills for labor and materials in connection with the
construction thereof have been paid in full or reserves have been established to
pay them. Except as disclosed in SCHEDULE 7.16 or the Escrow Agreement, such
Seller has no knowledge of any latent or patent material defect or deficiency
with regard to the structures, roofs, soils, furniture, fixtures or equipment of
the Facility owned by it that would materially impair the use or value of such
Facility, and the structures, roofs, soils, furniture, fixtures and equipment of
the Facility owned by such Seller are in good working order and condition. Such
Seller has no knowledge of any latent or patent material defect or deficiency
with regard to the plumbing, mechanical, electrical or other systems of the
Facility owned by it that would materially impair the use or value of such
Facility, and the plumbing, mechanical, electrical and other systems of the
Facility owned by such Seller are in good working order and condition.
Notwithstanding the foregoing, Seller shall not have any liability to Purchaser
for breach of any of the foregoing warranties and representations regarding
latent or patent material defects, deficiencies and construction in compliance
with the requirements of all laws if and to the extent Lyric Holdings or the
applicable Seller as a Facility Sublessee timely complies with the requirements
of the Master Lease with respect to the repair and correction of any such
defects, deficiencies and non-compliance with legal requirements.
7.17 Inventories. At Closing, the Facility owned by such Seller shall
have an inventory of perishable and non-perishable food, central supplies,
linens, housekeeping supplies, kitchen supplies and nursing supplies sufficient
in condition and quantity as may be required under all applicable laws and, to
the extent there exists no applicable laws that specifically identify the
condition and/or required quantity for any such supplies or inventory, then such
inventory and supplies shall be in such condition and quantity as customarily
are maintained by such Seller.
7.18. The Facility Agreements. Attached as SCHEDULE 7.18 is a true and
complete copy of the form of Admission Agreement currently utilized by such
Seller at the Facilities owned by it.
15
7.19. Patient Census. Attached as SCHEDULE 7.19 is a true and complete
census of the residents and patients of the Facility owned by such Seller, and
the daily rate paid by such patients and residents.
7.20. Disclosure. No representation or warranty by or on behalf of such
Seller contained in this Agreement, and no statement contained in any
certificate, list, exhibit or other instrument furnished or to be furnished to
Purchaser pursuant hereto, contains or will contain any untrue statement of a
material fact, or omits or will omit to state any material facts that are
necessary in order to make the statements contained herein or therein, in light
of the circumstances under which they were made, not misleading.
7.21 Insurance. Such Seller has maintained insurance policies that
insure the Facility owned by such Seller and the other Seller's Assets relating
thereto continuously since January 1, 1994. Such insurance policies are written
on an occurrence basis, against physical damage, general liability, professional
liability and workers' compensation. Attached as SCHEDULE 7.21 are certificates
of insurance for each Facility evidencing such coverage.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES OF LYRIC
Lyric and Lyric Holdings represent and warrant to Purchaser that:
8.01. Status of Lyric. Lyric is a limited liability company that is
duly organized, validly existing and in good standing under the laws of the
State of Delaware. IHS is the sole member of Lyric. Lyric is the sole
shareholder of Lyric Holdings, which in turn is the sole shareholder of each of
the Sellers. Lyric Holdings is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware.
8.02. Validity and Conflicts. This Agreement is, and all documents to
be executed by Lyric and Lyric Holdings pursuant hereto will be, the valid
obligations of Lyric and Lyric Holdings, enforceable in accordance with their
respective terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to the enforcement of creditors' rights generally and by general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law). The execution of this Agreement, the
Guaranty, the Master Management Agreement and the Master Franchise Agreement
have been approved by all required action on the part of the sole member of
Lyric and by the Board of Directors of Lyric as the sole shareholder of Lyric
Holdings and do not and will not result in a breach of the terms and conditions
of, nor constitute a default under or
16
violation of, the Charter Documents of Lyric and Lyric Holdings or any law,
regulation, court order, mortgage, note, bond, indenture, agreement, license or
other instrument or obligation to which Lyric or Lyric Holdings is now a party
or by which any of its assets may be bound or affected.
8.03. Authority. Lyric has full power and authority to execute and
deliver this Agreement, the Guaranty, the Master Management Agreement and the
Master Franchise Agreement. Lyric Holdings has full corporate power and
authority to execute and deliver the Master Lease.
8.04. Truth of Representations. The representations and warranty of
each Seller pursuant to Article VII are true and complete in all material
respects.
ARTICLE IX
PURCHASER REPRESENTATIONS AND WARRANTIES
Purchaser represents and warrants to Sellers, Lyric and Lyric Holdings
as of the Closing Date, that:
9.01. Status of Purchaser. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State of Maryland
and, to the extent required by applicable law, is authorized to transact
business in each of the states in which a Facility is located.
9.02. Validity and Conflicts. This Agreement is, and all documents to
be executed by Purchaser pursuant hereto will be, the valid and binding
obligations of Purchaser, enforceable in accordance with their respective terms,
except as the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to the enforcement of
creditors' rights generally and by general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
The execution of this Agreement and the consummation of the transactions
contemplated herein have been approved by the Board of Directors of Purchaser
and do not and will not result in a breach of the terms and conditions of, nor
constitute a default under or violation of, the Charter Documents of Purchaser
or any law, regulation, court order, mortgage, note, bond, indenture, agreement,
license or other instrument or obligation to which Purchaser is now a party or
by which its assets may be bound or affected.
9.03. Authority. Purchaser has full corporate power and authority to
execute and to deliver this Agreement and all related documents and to carry out
the transactions contemplated herein and therein.
17
9.04. Necessary Action. Purchaser has duly and properly taken or
obtained or caused to be taken or obtained all action necessary for Purchaser
(a) to enter into and deliver this Agreement and any and all documents and
agreements executed and to be executed by Purchaser in connection herewith and
(b) to carry out the terms of this Agreement and the transactions contemplated
by it. No consent of any third party is or will be necessary, and no other
action by or on behalf of Purchaser is or will be necessary, to authorize the
execution, delivery and performance of this Agreement and any documents and
agreements executed and to be executed by Purchaser in connection herewith or to
authorize the consummation of the transactions contemplated herein.
ARTICLE X
BROKER; INVESTMENT BANKER
Each party represents, covenants and warrants to the other that it has
employed no broker, finder or investment banker in connection with the
transaction contemplated in this Agreement. Each party agrees to pay any
commission, finder's fee or investment banker's fee that may be due on account
of the transaction contemplated in this Agreement to any broker, finder or
investment banker employed by it, and to indemnify the other party hereto
against any claim for any commission, finder's fee or investment banker's fee
made by any broker, finder or investment banker allegedly employed by it and
from and against any and all costs and expenses incurred in connection
therewith, including, but not limited to, reasonable attorneys' fees and costs.
ARTICLE XI
SELLER COVENANTS
11.01. Closing Date. On the Closing Date, each Seller will pay the
closing costs that such Seller is obligated to pay pursuant to this Agreement
and deliver to Purchaser the following:
(a) Articles of Incorporation, Certificates of Good Standing
and Certificates of Authority to Transact Business issued within the 30
days prior to the Closing Date by the Secretary of State (or other
authorized official) in the state in which the Facility owned by such
Seller is located and, if different, in the state of such Seller's
incorporation;
(b) Certificate Of Formation, Operating Agreement, Certificate
of Good Standing and Certificate of Authority to Transact Business
issued within the 30 days prior to the Closing Date for Lyric by the
Secretary of State (or other authorized official) in the state of
Lyric's formation and, if required by applicable law, in the respective
states in which the Facilities are located and Articles of
18
Incorporation, Certificates of Good Standing and Certificates of
Authority to Transact Business issued within thirty (30) days prior to
the Closing Date for Lyric Holdings by the Secretary of State (or other
authorized official) in the State of Lyric Holdings incorporation;
(c) Resolutions of such Seller's Board of Directors, certified
by the Secretary of such Seller and authorizing and approving the
transactions contemplated by this Agreement and resolutions of Lyric
authorizing and approving the execution, delivery and performance by
Lyric of its obligations under the Agreement, the Guaranty, the Master
Franchise Agreement and the Master Management Agreement and resolutions
of Lyric Holdings authorizing and approving the execution, delivery and
performance by Lyric Holdings of its obligations under the Agreement
and the Master Lease;
(d) An opinion or opinions of counsel to such Seller, Lyric,
Lyric Holdings and IHS dated as of the Closing Date in the form
acceptable to Purchaser;
(e) A general warranty deed (or such other form of deed
applicable in the State where the Facility is located as approved by
Purchaser) in recordable form, executed by such Seller and conveying to
Purchaser fee simple title to the Real Property owned by such Seller,
free and clear of all liens and encumbrances other than the Permitted
Encumbrances:
(f) A Xxxx of Sale, in the form of attached SCHEDULE 11.01(F),
executed by such Seller and conveying to Purchaser all of the Personal
Property for each of the Facilities owned by such Seller;
(g) The Master Lease executed by Lyric Holdings and a Facility
Sublease (as defined in the Master Lease) executed by such Seller and a
Security Agreement executed by such Seller with respect to each of the
Facility currently owned by such Seller, together with the security
deposit required by such Master Lease;
(h) A Guaranty, executed by Lyric;
(i) The Indemnity Agreement, executed by IHS;
(j) The Master Management Agreement, executed by Lyric and
Manager;
(k) The Facility Management Agreement, executed by such Seller
and Manager;
19
(l) A Consent and Subordination Agreement, executed by
Manager, Franchisor, Lyric Holdings, the Subsidiaries
of Lyric Holdings to which the Facilities are to be
subleased and Purchaser;
(m) The Master Franchise Agreement, executed by Lyric and
Franchisor;
(n) A Facility Franchise Agreement, executed by such
Seller and Franchisor;
(o) Such other documents or instruments as reasonably may
be necessary to convey to Purchaser title to the
Facility owned by such Seller and the other related
Sellers' Assets in accordance with the terms hereof.
11.02. Post Closing. Such Seller covenants and agrees that, after the
Closing Date, it will:
(a) At no cost to such Seller, reasonably cooperate with
Purchaser if Purchaser is required to include audited financial
statements with respect to the Facility currently owned by such Seller
in Purchaser's filings with the Securities and Exchange Commission,
provided, however, that Purchaser shall protect, indemnify, save
harmless and defend Sellers, their principals, officers, directors and
agents and employees from and against all liabilities, claims, damages,
penalties, causes of action, costs and expenses (including, without
limitation, reasonable attorneys' fees and expenses), to the extent
permitted by law, imposed upon or incurred by or asserted against them
by a third party or parties as a result of the publication of any such
audited financial statements by or at the direction of Purchaser, but
not against any such liabilities, claims, damages, penalties, causes of
action, costs or expenses as may be suffered by Sellers, their
principals, officers, directors and agents and employees in or as a
result of any action or proceeding with respect to any such audited
financial statement (i) in which a judgment is entered against any IHS,
Lyric, Lyric Holdings, any Seller or any principal, officer, director,
agent or employee thereof, or (ii) is settled in whole or in part on
the basis of a payment of Ten Thousand ($10,000.00) Dollars or more to
the claimant or moving party in such proceeding by IHS, Lyric, Lyric
Holdings, any Seller or any principal, officer, director, agent or
employee thereof alone or in combination with any payment made by IHS,
Lyric, Lyric Holdings, any Seller or any principal, officer, director,
agent or employee thereof (and as to expenses previously paid by
Purchaser pursuant to the foregoing indemnity prior to an event
described in (i) or (ii), above, Seller shall repay such expenses
promptly after the event specified);
(b) Take such actions and properly execute and deliver to
Purchaser such further instruments of assignment, conveyance and
transfer as, in the
20
reasonable opinion of counsel for Purchaser and such Seller, reasonably
may be necessary to assure, complete and evidence the transfer and
conveyance of Sellers' Assets as contemplated by this Agreement so long
as no additional liability or material additional expense is incurred
by such Seller by its execution of such instruments; and
(c) File the annual cost reports for the Facility currently
owned by such Seller within the periods required by Medicare, Medicaid
and any other third party payor and provide any additional
documentation to support the amounts claimed under such cost reports
within such time periods.
ARTICLE XII
PURCHASER COVENANTS
12.01. Closing Date. On the Closing Date, Purchaser will pay the
closing costs, if any, and any other expenses for which Purchaser is responsible
under this Agreement and deliver or cause to be delivered the following:
(a) The Purchase Price;
(b) Articles of Incorporation, Certificates of Good Standing
and Certificates of Authority to Transact Business issued within the 30
days prior to the Closing Date by the Secretary of State (or other
authorized official) in the states in which the Facilities to be
acquired by Purchaser is located and, if different, in the state of
Purchaser's incorporation;
(c) Resolutions of Purchaser's Board of Directors, certified
by the Secretary of Purchaser and authorizing and approving the
transactions contemplated herein;
(d) An opinion or opinions of counsel to Purchaser dated as of
the Closing Date in the form approved by Seller; and
(e) The Master Lease; and
(f) The Consent and Subordination Agreement and such other
documents as reasonably may be necessary to give effect to the
transaction contemplated by this Agreement.
12.02. Post Closing. After the Closing Date, Purchaser will take such
actions and properly execute and deliver such further instruments as Sellers
reasonably may request to assure, complete and evidence the transaction provided
for in this Agreement.
21
ARTICLE XIII
INTENTIONALLY OMITTED
ARTICLE XIV
CONDITIONS
14.01. Purchaser Conditions. The obligations of Purchaser under this
Agreement are subject to the fulfillment, prior to or as of the Closing Date, of
each of the following conditions:
(a) The representations and warranties of the respective
Sellers, Lyric, Lyric Holdings and IHS contained in this Agreement or
in any certificate or document delivered in connection with this
Agreement shall be true and correct in all material respects at and as
of the Closing Date.
(b) Sellers shall have paid all costs that Sellers are
required to pay pursuant to this Agreement, and Sellers, Lyric and
Lyric Holdings shall have performed all of their respective obligations
under this Agreement that are to be performed by them prior to or as of
the Closing Date.
(c) Purchaser and the respective Sellers shall have received
all governmental licenses, approvals and permits as are necessary to
enable Purchaser to lawfully own and the applicable Seller to lawfully
operate the Facility currently owned by it from and after the Closing
Date and shall have satisfied any and all conditions to the
effectiveness thereof.
(d) Purchaser shall have received and shall be satisfied with
(i) the Phase I environmental assessments with respect to the Real
Property and the Facilities and (ii) the MAI Appraisals.
(e) Each Seller shall not be in default, where said default
cannot be cured by the Closing Date, under any mortgage, contract,
lease or other agreement to which such Seller is a party or by which
such Seller is bound and that materially affects or relates to the Real
Property, the Personal Property or the Facilit(y)(ies) owned by such
Seller.
(f) A Title Insurance Policy shall have been issued to
Purchaser with respect to each of the Facilities.
22
14.02. Seller Conditions. All obligations of Sellers, Lyric and Lyric
Holdings under this Agreement are subject to the fulfillment, prior to or as of
the Closing Date, of each of the following conditions:
(a) The representations and warranties of Purchaser contained
in this Agreement or in any certificate or document delivered in
connection with this Agreement shall be true and correct in all
material respects at and as of the Closing Date.
(b) Purchaser shall have paid the Purchase Price and shall
have performed all of its other obligations under this Agreement that
are to be performed by it prior to or as of the Closing Date.
ARTICLE XV
INTENTIONALLY OMITTED
ARTICLE XVI
INDEMNIFICATION
16.01. Sellers' Indemnification. Subject to the limitations contained
herein and in Section 16.02, Sellers, jointly and severally, shall indemnify and
hold Purchaser harmless from and against any and all damages, losses,
liabilities, costs, actions, suits, proceedings, demands, assessments, and
judgements, including, but not limited to, reasonable and documented attorneys'
fees and reasonable costs and expenses of litigation, arising out of or in any
manner related to any of the following:
(a) Except as otherwise provided in this Agreement, any and
all obligations relating to the ownership of Sellers' Assets and the
operation of the Facilities that exist immediately prior to the Closing
Date;
(b) Any misrepresentation of a material fact, breach of
warranty or material breach of any agreement on the part of any Seller
under this Agreement or from any material misrepresentations in any
certificate furnished or to be furnished to Purchaser hereunder;
(c) Any failure by any Seller in connection with the
transaction contemplated herein to comply with the requirements of any
laws or regulations relating to bulk sales or transfers; and
23
(d) Any sums due by any Seller for Medicare and Medicaid
adjustments arising from the operation of any of the Facilities
conveyed pursuant to this Agreement prior to Closing; and
(e) Any action or proceeding by an appropriate state or
federal agency having jursidiction thereof, to revoke, withdraw or
suspend any of the Seller Licenses applicable to the Facility owned by
it or to terminate the participation of the Facility owned by it in
either the Medicare or Medicaid Programs, as a result of or caused by
the transactions contemplated by this Agreement, including the
execution and delivery of the Master Lease by Lyric Holdings and each
of the Facility Subleases by the respective Sellers.
For purposes of Section 16.01(a), an obligation shall be deemed to "exist"
immediately prior to the Closing Date if it relates to events that occurred
prior to the Closing Date even if it is not asserted until after the Closing
Date.
16.02 Purchaser's Indemnification. Purchaser shall indemnify and hold
Seller harmless from and against any and all damages, losses, liabilities,
costs, actions, suits, proceedings, demands, assessments, and judgements,
including, but not limited to, reasonable and documented attorneys' fees and
reasonable costs and expenses of litigation, arising out of or in any manner
related to any misrepresentation of a material fact, breach of a representation
or warranty, or material breach of any agreement on the part of Purchaser under
this Agreement.
16.03. Procedure. If an Indemnified Party asserts that an Indemnitor is
subject to a Claim for indemnification pursuant to Section 16.01 or Section
16.02, as the case may be, the Indemnified Party shall describe the Claim in
sufficient detail in order to permit the Indemnitor to evaluate the nature and
cause of the Claim. If the asserted Claim arises or is in connection with a
claim, suit, or demand filed by a third party, the Indemnitor shall be entitled
to defend against such Claim with counsel reasonably satisfactory to the
Indemnified Party. The Indemnified Party may continue to employ counsel of its
own, but such costs shall be borne by the Indemnified Party as long as the
Indemnitor continues to so defend. If the Indemnitor fails to respond or does
not admit responsibility for indemnification, the Indemnified Party may take
such necessary steps to defend itself and any reasonable costs associated
therewith may be included as part of the asserted Claim for indemnification. For
all Claims that are not Claims arising from a third party, Indemnitor shall
notify Purchaser as to its assertion of whether such Claim is covered by this
Article, including specific reasons for non-coverage, within 30 days of receipt
of written notice from the Indemnified Party describing the Claim in reasonable
detail. With respect to Claims arising from third parties, (a) if the
Indemnified Party declines to accept a bona fide offer of settlement that is
recommended by the Indemnitor, the maximum liability of the Indemnitor shall not
exceed that amount for which it would have been liable had such settlement been
accepted, and (b) if the Indemnitor declines to accept a bona fide offer of
24
settlement recommended by the Indemnified Party, the Indemnitor shall be liable
for whatever outcome results from such third party claim, provided, however,
that the Indemnitor shall not settle any Claim without either the written
consent of the Indemnitee or a full and complete release of the Indemnitee.
ARTICLE XVII
MISCELLANEOUS
17.01. Notices. Any notice, request or other communication to be given
by any party hereunder shall be in writing and shall be sent by registered or
certified mail, postage prepaid, by overnight delivery, hand delivery or
facsimile transmission to the following address:
To any Seller: Lyric Health Care, LLC
00000 Xxx Xxx Xxxxxxxxx
Xxxxxx Xxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxx and
Xxxxxxxx X. Xxxxxx, Esq.
Telephone No.: 410/000-0000
Facsimile No.: 410/998-8695
And Lyric Health Care, LLC
0000 Xxxxxxx Xxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxx 00000
With copy to LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P.
(which shall not 000 Xxxx 00xx Xxxxxx
constitute notice): Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxx X. Xxxxxx, Xx.
Telephone No.: 212/000-0000
Facsimile No.: 212/424-8500
To Purchaser: Omega Healthcare Investors, Inc.
000 Xxxx Xxxxxxxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxx 00000
Attn: F. Xxxxx Xxxxxxx
Telephone No.: 313/000-0000
25
With copy to Xxxxxx Xxxxxxx PLLC
(which shall not 0000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 000
constitute notice): Xxxxxxxxxx Xxxxx, XX 00000-0000
Attn: Xxxx X. Xxxxxxxxxx
Telephone No.: 248/000-0000
Facsimile No.: 248/203-0763
Notices shall be deemed given upon actual receipt.
17.02. Allocation of Purchase Price. The Purchase Price shall be
allocated among the five (5) Facilities as set forth on attached SCHEDULE 17.02.
The parties agree that the Personal Property has nominal value and therefore no
amount of the Purchase Price is being allocated to it. Each party agrees to
timely file tax form 8594 in accordance with the allocations to which the
parties have so agreed.
17.03. Assignment. No party may assign, directly or indirectly, its
rights or obligations hereunder without the prior written consent of the other
parties.
17.04 Sole Agreement. This Agreement may not be amended or modified in
any respect whatsoever except by an instrument in writing signed by the parties
hereto. This Agreement, the disclosure schedules for each of the parties and the
documents executed and delivered pursuant hereto constitute the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersede all prior negotiations, discussions, writings and agreements between
them.
17.05. Captions. The captions of this Agreement are for convenience of
reference only and shall not define or limit any of the terms or provisions
hereof.
17.06. Severability. Should any one or more of the provisions of this
Agreement be determined to be invalid, unlawful or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions hereof
shall not in any way be affected or impaired thereby.
17.07. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
17.08. Knowledge Defined. To the extent that any of the representations
and warranties contained in this Agreement is limited by the phrases "to the
best knowledge of" or "Purchaser has no knowledge of" or "to Seller's knowledge"
or "Seller has no knowledge of" or words or phrases of similar import, the same
shall mean to the actual knowledge of any of the corporate officers or directors
of the party or its subsidiaries making said representation or warranty, and, in
the case of any Seller, to the actual
26
knowledge of the administrator of the Facility owned by such Seller. To the
extent that any of the representations and warranties contained in this
Agreement refers to verbal notice to a party, such notice shall be deemed to
have been received if delivered to any officer of such party or to an officer of
one of its subsidiaries, and, in the case of any Seller, to the administrator or
any department head of the Facility owned by such Seller.
17.09. Third Party Beneficiary. Nothing in this Agreement is intended
to or shall not be construed to confer upon or create in any person (other than
the parties hereto) any rights or remedies under or by reason of this Agreement,
including without limitation, any right to enforce this Agreement.
17.10. Attorneys' Fees. In the event of a dispute between the parties
hereto with respect to the interpretation or enforcement of the terms hereof,
the prevailing party in any action resulting therefrom shall be entitled to
collect from the other its reasonable and documented costs and attorneys' fees,
including its costs and fees on appeal.
17.11. Construction. The parties have participated jointly in the
negotiation and drafting of this Agreement. If an ambiguity or 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 of the
provisions of this Agreement. Any reference to any federal, state or local
statute or law shall be deemed also to refer to all rules and regulations
promulgated thereunder, unless the context requires otherwise. The word
"including" shall mean "including without limitation."
17.12. Survival. The representations, warranties, covenants or
conditions set forth herein shall survive the Closing for a period of one (1)
year after the Closing; provided, however, that if, at anytime during that one
(1) year period, any claim is made for a breach thereof, the same shall survive
until a final, non-appealable resolution thereof.
17.13 Governing Law. THIS AGREEMENT AND THE TRANSACTION DOCUMENTS SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MICHIGAN.
SELLERS CONSENT TO IN PERSONAM JURISDICTION BEFORE THE STATE AND FEDERAL COURTS
OF THE STATE OF MICHIGAN, AND AGREES THAT ALL DISPUTES CONCERNING THIS AGREEMENT
MAY BE HEARD, AT PURCHASER'S OPTION, IN THE STATE AND FEDERAL COURTS LOCATED IN
THE STATE OF MICHIGAN. SELLERS AGREE THAT SERVICE OF PROCESS MAY BE EFFECTED
UPON SELLERS UNDER ANY METHOD PERMISSIBLE UNDER THE LAWS OF THE STATE OF
MICHIGAN AND IRREVOCABLY WAIVES ANY OBJECTION TO VENUE IN THE STATE AND FEDERAL
COURTS OF THE STATE OF MICHIGAN.
SIGNATURE PAGES FOLLOW
27
IN WITNESS WHEREOF, the parties hereby execute this Agreement as of the
day and year first set forth therein.
SELLERS:
GAINESVILLE HEALTH CARE CENTER, INC.
By:
-----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
REST HAVEN NURSING CENTER (CHESTNUT
HILL), INC.
By:
-----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
CLAREMONT INTEGRATED HEALTH, INC.
By:
-----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
RIKAD PROPERTIES, INC.
By:
-----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
INTEGRATED MANAGEMENT-GOVERNOR'S
PARK, INC.
By:
-----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
28
LYRIC:
LYRIC HEALTH CARE LLC
By: Integrated Health Services, Inc.
Its: Managing Director
By:
-----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
LYRIC HOLDINGS:
LYRIC HEALTH CARE HOLDINGS, INC.
By:
-----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
PURCHASER:
OMEGA HEALTHCARE INVESTORS, INC.
By:
-----------------------------------------
Name: F. Xxxxx Xxxxxxx
Title: Executive Vice President
29
SCHEDULES:
EXHIBIT A List of Sellers
SCHEDULE 1(a) Schedule of Deferred Maintenance Adjustments
SCHEDULE 1(b) Schedule of Environmental Remediation
SCHEDULE 1(c) Description of Facilities
SCHEDULE 1(d) IHS Indemnity Agreement
SCHEDULE 1(e) Names of Facilities
SCHEDULE 1(f) Permitted Encumbrances
SCHEDULE 1(g) Personal Property
SCHEDULE 1(h) Excluded Personal Property
SCHEDULE 1(i) Legal Descriptions of Real Property
SCHEDULE 7.04 Seller Financial Statement Variances
SCHEDULE 7.06 Permits and Licenses
SCHEDULE 7.07(a) Licensure Surveys
SCHEDULE 7.07(b) Waivers of Citations
SCHEDULE 7.07(d) Violations of Medicare or Medicaid
SCHEDULE 7.11 Environmental Assessment Reports
SCHEDULE 7.13 Litigation
SCHEDULE 7.16 Latent Defects
SCHEDULE 7.18 Admission Agreement
SCHEDULE 7.19 Patient Census
SCHEDULE 7.21 Insurance Policies
30
SCHEDULE 11.01(f) Xxxx of Sale
SCHEDULE 17.02 Allocation of Purchase Price
31
EXHIBIT A
LIST OF SELLERS
---------------
================================================================================
NAME OF SELLER STATE OF INCORPORATION
================================================================================
Gainesville Health Care Center, Inc. Florida
Rest Haven Nursing Center (Chestnut Pennsylvania
Hill), Inc.
--------------------------------------------------------------------------------
Claremont Integrated Health, Inc. Pennsylvania
--------------------------------------------------------------------------------
Rikad Properties, Inc. Florida
--------------------------------------------------------------------------------
Integrated Management-Governor's Delaware
Park, Inc.
--------------------------------------------------------------------------------
SCHEDULE 1(A)
SCHEDULE OF DEFERRED MAINTENANCE ADJUSTMENTS
--------------------------------------------
INTEGRATED HEALTH SERVICES OF CHESTNUT HILL, PA
Flooring $ 25,000.00
Walls/Trim/Decorating $30,000.00
Laundry Machines $15,000.00
Electrical Repair $10,000.00
Parking Lot $5,000.00
O & M Plan $1,000.00
Contingency $10,000.00
----------
TOTAL $96,000.00
INTEGRATED HEALTH SERVICES OF ST. PETERSBURG, FL
Roof $75,000.00
Hotel Clean-up/furnishings $24,000.00
Kitchen Appliances $20,000.00
Parking Lot $5,000.00
Common Baths/New Tile $20,000.00
Termites Hotel/Tenting $10,000.00
Windows/Hotel $15,000.00
O & M Plan $1,000.00
Contingency $10,000.00
----------
TOTAL $180,000.00
INTEGRATED HEALTH SERVICES AT GAINESVILLE, FL
Maintenance Building $15,000.00
Roof $110,000.00
HVAC Units/Roof $70,000.00
Flooring $30,000.00
Landscaping/Drainage $15,000.00
Electrical, Old Wing $20,000.00
Kitchen Floor/Appliances $40,000.00
Hand Rails/Cove/Wallpaper $45,000.00
Furnishings $50,000.00
O & M Plan $1,000.00
Landscaping/Remove Trailers $10,000.00
Laundry Equipment $20,000.00
Contingency $10,000.00
----------
TOTAL $436,000.00
INTEGRATED HEALTH SERVICES XX XXX XXXXXXXXX XX XXXXXXXXX, XX
O & M Plan $1,000.00
TOTAL $1,000.00
GOVERNOR'S PARK NURSING AND REHABILITATION CENTER, IL
Structural Repairs $10,000.00
Roof Repair over Boiler Room $2,000.00
TOTAL $12,000.00
TOTAL ALL FACILITIES $725,000.00
SCHEDULE 1(B)
SCHEDULE OF ENVIRONMENTAL REMEDIATION
-------------------------------------
INTEGRATED HEALTH SERVICES OF NEW HAMPSHIRE AT CLAREMONT
Remove asbestos floor tile and asbestos elbows (and, if present,
asbestos pipe insulation) from processed water piping prior to expiration or
earlier termination of Master Lease.
INTEGRATED HEALTH SERVICES OF ST. PETERSBURG, FL
Remove underground storage tank (hotel building) within one hundred
eighty (180) days after date of Closing.
INTEGRATED HEALTH SERVICES OF GAINESVILLE, FL
Remove approximately 8,000 square feet of asbestos popcorn ceiling
prior to expiration or sooner termination of Master Lease.
INTEGRATED HEALTH SERVICES OF CHESTNUT HILL, PA
Remove approximately 6,000 square feet of asbestos linoleum prior to
expiration or sooner termination of Master Lease.
With respect to each of the Facilities (including the Governor's Park Facility),
present an O&M Plan to Purchaser for its approval, which shall not be
unreasonably withheld or delayed, within ninety (90) days after the date of
Closing.
SCHEDULE 1(C)
DESCRIPTION OF FACILITIES
-------------------------
==============================================================================================================
SELLER'S NAME NAME OF FACILITY ADDRESS NUMBER OF
LICENSED BEDS
==============================================================================================================
Gainesville Health Care Integrated Health 0000 X.X. 00xx Xxx. 120
Center, Inc. Services at Gainesville Xxxxxxxxxxx, XX 00000
--------------------------------------------------------------------------------------------------------------
Rest Haven Nursing Integrated Health 0000 Xxxxxxx Xxx. 200
Center (Chestnut Hill), Services of Chestnut Xxxxxxxx, XX 00000
Inc. Hill
--------------------------------------------------------------------------------------------------------------
Claremont Integrated Integrated Health RFD 3 Xxx 00, Xxxxxxx Xx. 00
Health, Inc. Services of New Ext.
Hampshire at Xxxxxxxxx, XX 00000
Claremont
--------------------------------------------------------------------------------------------------------------
Rikad Properties, Inc. Integrated Health 000 Xxxxxxx Xx. X. 92
Services of Xx. Xx. Xxxxxxxxxx, XX 00000
Petersburg
--------------------------------------------------------------------------------------------------------------
Integrated Management Xxxxxxxx'x Xxxx 0000 Xxxxx Xxxxxxxxxx 150
Governor's Park, Inc. Nursing and Road
Rehabilitation Center Xxxxxxxxxx, Xxxxxxxx 00000
Governor's Park Vacant
Land
==============================================================================================================
SCHEDULE 1(E)
NAMES OF FACILITIES
-------------------
Integrated Health Services at Gainesville
Integrated Health Services of Chestnut Hill
Integrated Health Services of New Hampshire at Claremont
Integrated Health Services of St. Petersburg
Governor's Park Nursing and Rehabilitation Center
SCHEDULE 1(F)
PERMITTED ENCUMBRANCES
----------------------
INTEGRATED HEALTH SERVICES AT GAINESVILLE
-----------------------------------------
INTEGRATED HEALTH SERVICES OF CHESTNUT HILL
-------------------------------------------
INTEGRATED HEALTH SERVICES OF NEW HAMPSHIRE AT CLAREMONT
--------------------------------------------------------
INTEGRATED HEALTH SERVICES OF ST. PETERSBURG
--------------------------------------------
GOVERNOR'S PARK NURSING AND REHABILITATION CENTER
-------------------------------------------------
SCHEDULE 7.04
SELLER FINANCIAL STATEMENTS - VARIANCES FROM GAAP
-------------------------------------------------
NONE
SCHEDULE 7.07(A)
LIST OF MOST RECENT LICENSURE OR CERTIFICATION SURVEYS
------------------------------------------------------
None
SCHEDULE 7.07(D)
VIOLATIONS OF MEDICARE OR MEDICAID
----------------------------------
None
SCHEDULE 11.01(F)
XXXX OF SALE
In consideration of Ten Dollars ($10.00) and other good and valuable
consideration, the receipt and sufficiency of which hereby are
acknowledged,______________, a ________ corporation ("Seller"), does hereby
grant, bargain, sell, convey and transfer to Omega Healthcare Investors, Inc., a
Maryland corporation ("Buyer"), all of its right, title and interest in and to,
all and singular, the furniture, fixtures, equipment, inventory (including
linens, dietary supplies and housekeeping supplies, but excluding food and other
consumable inventories) and other tangible personal property located on or used
by Seller in connection with the -bed skilled nursing home facility located at
the following ---- address (the "Property"), but excluding those items of
personal property identified on attached EXHIBIT A.
TO HAVE AND TO HOLD, all and singular, the Property hereby sold,
assigned, transferred and conveyed to Buyer, its successors and assigns, to and
for its own use and benefit.
Seller hereby represents and warrants to Buyer that Seller is the owner
of the Property, that Seller has full right, power and authority to sell the
Property and to make this Xxxx of Sale, and that the Property is free and clear
of all liens and encumbrances.
Dated effective as of the 13th day of January, 1998.
SELLERS:
GAINESVILLE HEALTH CARE CENTER, INC.
By:
-----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
REST HAVEN NURSING CENTER (CHESTNUT
HILL), INC.
By:
-----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
CLAREMONT INTEGRATED HEALTH, INC.
By:
-----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
RIKAD PROPERTIES, INC.
By:
-----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
INTEGRATED MANAGEMENT-GOVERNOR'S
PARK, INC.
By:
-----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
LYRIC:
LYRIC HEALTH CARE LLC
By: Integrated Health Services, Inc;
Its: Member
By:
-----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
LYRIC HOLDINGS:
LYRIC HEALTH CARE HOLDINGS, INC.
By:
-----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
PURCHASER:
OMEGA HEALTHCARE INVESTORS, INC.
By:
-----------------------------------------
Name: F. Xxxxx Xxxxxxx
Title: Executive Vice President
SCHEDULE 17.02
ALLOCATION OF PURCHASE PRICE
----------------------------
================================================================================
FACILITY PURCHASE PRICE
================================================================================
Integrated Health Services at Gainesville $5,700,000.00
--------------------------------------------------------------------------------
Integrated Health Services of Chestnut Hill $14,400,000.00
--------------------------------------------------------------------------------
Integrated Health Services of New Hampshire at Claremont $5,800,000.00
--------------------------------------------------------------------------------
Integrated Health Services of St. Petersburg $4,300,000.00
--------------------------------------------------------------------------------
Governor's Park Nursing and Rehabilitation Center $14,300,000.00
--------------------------------------------------------------------------------
Governor's Park Vacant Land $400,000.00
--------------------------------------------------------------------------------
TOTAL PURCHASE PRICE $44,900,000.00
================================================================================