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EXHIBIT 2.21
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is entered into and is
effective this 26th day of November, 1997, by and between BALANCED CARE
CORPORATION, a Delaware corporation (together with its permitted assigns,
"Purchaser"), and GETHSEMANE RETIREMENT COMMUNITY AND REHABILITATION CENTER,
INC., a Pennsylvania corporation, formerly Xxxxx Nursing Home, Inc. ("Seller").
RECITALS:
Seller owns certain assets in connection with the operation of the
licensed 66-bed skilled nursing facility located at the following address: 0000
Xxxxx Xxxx, X.X. Xxx 000, Xxxxxxxxxx, Xxxxxxxxxxxx (the "Facility"). Purchaser
desires to purchase substantially all of the assets of Seller and the Business
(as hereinafter defined) related thereto and Seller desires to sell such assets
to Purchaser.
This Agreement sets forth the terms and conditions upon which Purchaser
is purchasing the assets (other than Excluded Assets, as hereinafter defined)
owned by Seller and used in the conduct of the Business, and Seller is selling
to Purchaser such assets (other than Excluded Assets).
In consideration of the mutual agreements, covenants, representations
and warranties contained herein, and in reliance thereon, Purchaser and Seller
hereby agrees as follows:
ARTICLE I. CERTAIN DEFINITIONS
As used herein, the following terms shall have the following meanings:
1.1 "ACCOUNTS RECEIVABLE" shall mean as of any date any trade accounts
receivable (including, without limitation, any third party receivables arising
in connection with any Third Party Payor Programs), notes receivable, bid or
performance deposits, employee advances and other miscellaneous receivables
associated with the Business through and as of such date.
1.2 "ACCREDITATION BODY" shall mean CARF, JCAHO, the Department of
Health, the Pennsylvania Department of Public Welfare and all other Persons
having jurisdiction over the accreditation, certification, evaluation or
operation of the Business.
1.3 "ACCRUED EXPENSES" shall mean as of any date accrued rents,
insurance premiums, payroll and benefits (including, without limitation,
vacation, sick pay, disability pay) and other accrued expenses as would appear
on a balance sheet of Seller as of such date prepared in accordance with GAAP
consistently applied, including those described in SCHEDULE 1.3.
1.4 "AFFILIATE" shall mean any company or other entity which controls,
is controlled by or is under common control with the designated Party. For the
purpose of the foregoing, ownership, directly or indirectly, of 20% or more of
the voting stock or other equity interest shall be deemed to constitute control.
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1.5 "AGREEMENT" shall mean this Asset Purchase Agreement.
1.6 "ANCILLARY AGREEMENTS" shall mean the real property conveyances
described in Section 5.2.1, the xxxx of sale, assignment and assumption
described in Section 5.2.2, the Employment Agreement and the Escrow Agreement.
1.7 "ASSUMED LIABILITIES" shall have the meaning given to such term in
Section 4.2.
1.8 "BENEFIT PLAN" shall have the meaning given to such term in Section
6.19.
1.9 "BOOKS AND RECORDS" shall have the meaning given to such term in
Section 6.16.
1.10 "BUSINESS" shall mean the operation of a skilled nursing facility
and any other ancillary health care services owned, operated, delivered,
managed, developed, constructed, maintained, used, occupied or possessed by
Seller in connection therewith (including, without limitation, any outpatient
and contract rehab therapy services or any Alzheimer's units).
1.11 "CARF" shall mean the Commission on Accreditation of
Rehabilitation Facilities.
1.12 "CHAMPUS" shall mean the Civilian Health and Medical Program of
the Uniform Service, a program of medical benefits covering retirees and
dependents of members or former members of a uniformed service provided,
financed and supervised by the United States Department of Defense and
established by 10 U.S.C. Sections 1071 ET SEQ.
1.13 "CLOSING" shall have the meaning given to such term in Section
5.1.
1.14 "CLOSING DATE" shall have the meaning given to such term in
Section 5.1.
1.15 "CLOSING INVENTORY" shall mean all Inventory relating to the
Business on the Closing Date.
1.16 "CODE" shall mean the Internal Revenue Code of 1986, as it may be
amended from time to time, and any successor thereto. Any reference herein to a
specific section or sections of the Code shall be deemed to include a reference
to any corresponding provision of future law.
1.17 "CONTRACT" shall mean all alliance agreements, transfer
agreements, other agreements (including, without limitation, Patient's
Agreements described on SCHEDULE 1.50, Management Agreements and Provider
Agreements), contracts, contract rights, commitments, customer accounts, orders,
leases, guarantees, warranties and representations, franchises and books and
records of account benefiting, relating to the Business or the ownership,
construction, development, maintenance, repair, management, use, occupancy,
possession or operation thereof, or the operation of any of the programs or
services in conjunction with the Business and all renewals, replacements and
substitutions therefor, issued by any Governmental Authority, Accreditation Body
or Third Party Payor or maintained or used by Seller with any third Person.
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1.18 "CURRENT LIABILITIES" shall mean all liabilities classified as
current liabilities in accordance with GAAP.
1.19 "DAMAGES" shall have the meaning given to such term in Section
14.4.
1.20 "DEPARTMENT OF HEALTH" shall mean the Commonwealth of
Pennsylvania, Department of Health.
1.21 "EMPLOYEE" shall mean any individual employed by Seller in the
conduct of the Business as listed on SCHEDULE 1.21 (such Schedule being subject
to change between the date hereof and the Closing Date as a result of employee
changes in the ordinary course of business consistent with past practices).
1.22 "EMPLOYMENT AGREEMENT" shall mean the contract entered into
between Purchaser and Xxxxxx substantially in the form of EXHIBIT 1.22.
1.23 "ENCUMBRANCE" shall mean any right to, or interest in, property,
which subsists in a third-party and which constitutes a claim, lien, charge or
liability attached to and binding upon the property, including, but not limited
to, a mortgage, judgment lien, mechanic's lien, lease, security interest,
easement and right-of-way.
1.24 "ENVIRONMENTAL LAW" shall mean any federal [including but not
limited to the Federal Water Pollution Control Act (33 U.S.C. Sections 1251 ET
SEQ.), the Toxic Substances Control Act (15 U.S.C. Sections 2601 ET SEQ.), the
Clean Air Act (42 U.S.C. Sections 7401 ET SEQ.), the Comprehensive Environmental
Response, Compensation and Liability Act (42 U.S.C. Sections 9601 ET SEQ.), the
Resource Conservation and Recovery Act (42 U.S.C. Sections 6901 ET SEQ.), the
Hazardous Materials Transportation Act (49 U.S.C. Sections 1801 ET SEQ.), and
the Federal Insecticide Fungicide and Rodenticide Act (7 U.S.C. Sections 136 ET
SEQ.)], other Legal Requirements, any common law doctrine and any provision or
condition of any permit, license or other operating authorization relating to
(i) the protection of the environment or the public welfare from actual or
potential exposure (or the effects of exposure) to any actual or potential
release, discharge, disposal or emission (whether past or present) of any
Regulated Substance or (ii) the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of any Regulated Substance.
1.25 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
1.26 "ERISA PLANS" shall mean defined benefit pension plans and defined
contribution pension plans qualified under Section 401(a) of the Code.
1.27 "ESCROW AGENT" shall mean First American Title Insurance Company.
1.28 "ESCROW AGREEMENT" shall mean the escrow agreement entered into
among Escrow Agent, Purchaser and Seller in substantially the form of EXHIBIT
1.28.
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1.29 "ESCROW DEPOSIT" shall have the meaning given to such term in
Section 3.2.
1.30 "EXCLUDED ASSETS" shall mean those assets that are not included in
the sale contemplated hereby and as are further defined in Section 2.2.
1.31 "FACILITY" shall mean the facility identified in the Recitals of
this Agreement.
1.32 "FINAL ESCROW DEPOSIT" shall have the meaning given to such term
in Section 3.2.
1.33 "FINANCING COMMITMENT" shall have the meaning given to such term
in Section 10.16.
1.34 "GAAP" shall mean generally accepted accounting principles in the
United States of America.
1.35 "GETHSEMANE AL ASSET PURCHASE AGREEMENT" shall mean the asset
purchase agreement entered into between Purchaser and Gethsemane Assisted
Living, Inc. concurrently herewith.
1.36 "GOVERNMENTAL AUTHORITIES" shall mean all agencies, authorities,
bodies, boards, commissions, courts, instrumentalities, legislatures and offices
of any nature whatsoever of any government, quasi-governmental unit or political
subdivision, whether with a federal, state, county, district, municipality, city
or otherwise.
1.37 "INDEMNIFYING PARTY" shall have the meaning given to such term in
Section 14.4.
1.38 "INDEMNIFIED PARTY" shall have the meaning given to such term in
Section 14.4.
1.39 "INITIAL ESCROW DEPOSIT" shall have the meaning given to such term
in Section 3.2.
1.40 "INVENTORY" shall mean the inventory of Seller, including, without
limitation, dry storage goods, janitorial supplies, food and beverage supplies,
office supplies, medical supplies and pharmaceutical supplies.
1.41 "JCAHO" shall mean the Joint Commission on Accreditation of
Healthcare Organizations.
1.42 "XXXXXX" shall mean Xxxxx X. Xxxxxx, an individual.
1.43 "KNOWLEDGE" and words of similar import shall mean, with respect
to any Party, actual knowledge of a particular fact or other matter being
possessed by an individual, and the knowledge that reasonably could be expected
to be obtained in the course of the reasonable conduct of such Party's business,
but shall not be construed to require a comprehensive investigation concerning
the subject matter.
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1.44 "LEGAL REQUIREMENTS" shall mean all statutes, ordinances, by-laws,
codes, rules, regulations, restrictions, orders, judgments, decrees and
injunctions (including, without limitation, all applicable building, health
code, zoning, subdivision and other land use and health care licensing statutes,
ordinances, by-laws, codes, rules and regulations), promulgated or issued by any
Governmental Authority, Accreditation Body or Third Party Payor. Without
limiting the foregoing, the term Legal Requirements includes all Environmental
Laws and all Permits and Contracts issued or entered into by any Governmental
Authority, any Accreditation Body and/or any Third Party Payor and all Permitted
Encumbrances.
1.45 "MANAGED CARE PLANS" shall mean all health maintenance
organizations, preferred provider organizations, individual practice
associations, competitive medical plans and similar arrangements.
1.46 "MANAGEMENT AGREEMENT" shall mean any agreement, whether written
or oral, between Seller and any other Person pursuant to which Seller provides
any payment, fee or other consideration to any other Person to operate or manage
the Business (except any employment agreements).
1.47 "MEDICAID" shall mean the medical assistance program established
by Title XIX of the Social Security Act (42 U.S.C. Sections 1396 ET SEQ.) and
any statute succeeding thereto.
1.48 "MEDICARE" shall mean the health insurance program for the aged
and disabled established by Title XVIII of the Social Security Act (42 U.S.C.
Sections 1395 ET SEQ.) and any statute succeeding thereto.
1.49 "PARTY" shall mean either Seller or Purchaser, individually, as
the context so requires, and the term "PARTIES" shall mean Seller and Purchaser
together.
1.50 "PATIENT'S AGREEMENTS" shall mean copies of all contracts,
agreements and consents executed by or on behalf of any patient or other Person
seeking services at the Facility as more fully described in SCHEDULE 1.50
hereto, including, without limitation, assignments of benefits and guarantees,
and such patient's related medical and/or other records.
1.51 "PAYABLES" as of any date shall mean any of the trade accounts
payable of Seller with respect to the Purchased Assets or the Business as of
such date in accordance with GAAP consistently applied.
1.52 "PERMITS" shall mean all permits, licenses, approvals,
qualifications, rights, variances, permissive uses, accreditations,
certificates, certifications, consents, contracts, interim licences, permits and
other authorizations of every nature whatsoever required by, or issued to or on
behalf of Seller under any Legal Requirements benefiting, relating or effecting
the Business or the construction, development, maintenance, management, use or
operation thereof, or the operation of any programs or services in conjunction
with the Business and all renewals, replacements and substitutions therefor, now
or hereafter required or issued by any Governmental Authority, Accreditation
Body or Third Party Payor.
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1.53 "PERMITTED ENCUMBRANCES" shall mean those Encumbrances as
specifically set forth on SCHEDULE 1.53 hereto.
1.54 "PERSON" shall mean any individual, corporation, company, limited
or general partnership, trust or estate, joint venture, association or other
entity.
1.55 "PREPAID EXPENSES" as of any date shall mean payments made by
Seller with respect to the Purchased Assets or the Business, which constitute
prepaid expenses in accordance with GAAP consistently applied.
1.56 "PROPRIETARY RIGHTS" shall have the meaning given to such term in
Section 6.10.1.
1.57 "PROVIDER AGREEMENTS" shall mean all participation, provider and
reimbursement agreements or arrangements for the benefit of Seller in connection
with the operation of the Business relating to any right to payment or other
claim arising out of or in connection with Seller's participation in any Third
Party Payor Program.
1.58 "PURCHASE PRICE" shall have the meaning given to such term in
Section 3.1.1.
1.59 "PURCHASED ASSETS" shall have the meaning given to such term in
Section 2.1.
1.60 "PURCHASER" shall have the meaning given to such term in the
preamble of this Agreement.
1.61 "PURCHASER DAMAGES" shall have the meaning given to such term in
Section 14.2.
1.62 "PURCHASER INDEMNITEES" shall have the meaning given to such term
in Section 14.2.
1.63 "REAL PROPERTY" shall mean the Real Property Leased and the Real
Property Owned, collectively.
1.64 "REAL PROPERTY LEASED" shall mean the real property owned by
Seller and leased to Gethsemane Assisted Living, Inc., as tenant, as more fully
described in SCHEDULE 1.64 hereto, used in connection with the operation of a
personal care home located thereon.
1.65 "REAL PROPERTY OWNED" shall mean the real property owned by
Seller, and used in connection with the Facility and the Business as more fully
described in SCHEDULE 1.65 hereto.
1.66 "REGULATED SUBSTANCE" shall mean petroleum, petroleum hydrocarbons
or petroleum products and any other chemical, material, substance or waste that
is identified (by listing or characteristic) and regulated (or the clean-up of
which can be required) by any Legal Requirement intended to protect the
environment or the public health or welfare, including but not limited to Legal
Requirements relating to clean air, clean water, hazardous and solid waste
disposal, safe drinking water, endangered species, occupational safety and
health, oil spill prevention, groundwater protection, and toxic substances
control.
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1.67 "RELATED PARTY" means (i) Seller, (ii) any Affiliate of Seller,
(iii) any officer, director, shareholder or partner of any Person identified in
clauses (i) or (ii) preceding, and (iv) any spouse, sibling, ancestor or lineal
descendant of any natural Person identified in any one of the preceding clauses.
1.68 "RETAINED LIABILITIES" has the meaning given that term in Section
4.2.
1.69 "SECURITY RIGHT" means, with respect to any security, any option,
warrant, subscription right, preemptive right, other right, proxy, put, call,
demand, plan, commitment, agreement, understanding or arrangement of any kind
relating to such security, whether issued or unissued, or any other security
convertible into or exchangeable for any such security. "Security Right"
includes any right relating to issuance, sale, assignment, transfer, purchase,
redemption, conversion, exchange, registration or voting and includes rights
conferred by statute, by the issuer's governing documents or by agreement.
1.70 "SELLER" shall have the meaning given to such term in the preamble
of this Agreement.
1.71 "SELLER DAMAGES" shall have the meaning given to such term in
Section 14.3.
1.72 "SELLER INDEMNITEES" shall have the meaning given to such term in
Section 14.3.
1.73 "TAXES" shall mean all taxes, duties, charges, fees, levies or
other assessments imposed by any Governmental Authority, including, without
limitation, income, gross receipts, value-added, excise, withholding, personal
property, real estate, sales, use, ad valorem, license, lease, service,
severance, stamp, transfer, payroll, employment, customs, duties, alternative,
add-on minimum, estimated and franchise taxes (including any interest, penalties
or additions attributable to or imposed on or with respect to day such
assessment).
1.74 "TAX RETURN" means any return, declaration, report, claim for
refund, or information return or statement relating to any Tax, including any
schedule or attachment thereto, and including any amendment thereof.
1.75 "THIRD PARTY PAYOR PROGRAMS" shall mean all third party payor
programs which Seller participates, including, without limitation, Medicare,
Medicaid, Champus, Blue Cross and/or Blue Shield, Managed Care Plans, other
private insurance plans and employee assistance programs.
1.76 "THIRD PARTY PAYORS" shall mean Medicare, Medicaid, Blue Cross
and/or Blue Shield, private insurers and any other Person which maintains Third
Party Payor Programs.
ARTICLE II. TRANSFER OF ASSETS AND PROPERTIES
2.1 PURCHASED ASSETS. Subject to the terms and conditions of this
Agreement, Seller shall sell and convey to Purchaser, free and clear of all
Encumbrances whatsoever (other than Permitted Encumbrances and except as
expressly provided herein), and Purchaser shall purchase
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from Seller, all of Seller's's right, title and interest in and to the assets,
properties and rights of every kind and description, real, personal and mixed,
tangible and intangible, wherever situated owned by Seller and used or useful in
connection with the Business (the "Purchased Assets") as the same shall exist on
the Closing Date (other than the Excluded Assets), including, without
limitation, the following:
2.1.1 REAL PROPERTY OWNED. The Real Property Owned, together
with the buildings, structures, improvements and fixtures located
thereon, and all rights, privileges, easements, licenses, hereditaments
and other appurtenances relating thereto;
2.1.2 REAL PROPERTY LEASED. The Real Property Leased, together
with the buildings, structures, improvements and fixtures located
thereon, and all rights, privileges, easements, licenses, hereditaments
and other appurtenances relating thereto;
2.1.3 EQUIPMENT, MACHINERY AND OTHER TANGIBLE PERSONAL
PROPERTY. All machinery, equipment, leasehold improvements,
automobiles, supplies, office furniture and office equipment, computing
and telecommunications equipment and other items of personal property,
including those described in SCHEDULE 2.1.3 hereto;
2.1.4 CONTRACTS RELATING TO THE BUSINESS. All contracts
relating to the acquisition or ownership of the Purchased Assets or the
operation of the Business, including, without limitation, the Contracts
listed on SCHEDULE 2.1.4 and the Patient's Agreements listed on
SCHEDULE 1.50 HERETO, to the extent such Contracts are transferrable to
Purchaser;
2.1.5 MARKETING MATERIALS, MANUALS. All catalogs, brochures,
reference sources, suppliers' names, mailing lists, art work,
photographs, public relations and advertising material used in the
Business, whether in electronic form or otherwise;
2.1.6 PERMITS, LICENSES. All Permits relating to the
acquisition or ownership of the Purchased Assets or the operation of
the Business, including, without limitation, those permits listed in
SCHEDULE 2.1.6 hereto, to the extent such Permits are transferrable to
Purchaser;
2.1.7 TRADE SECRETS. All policies and procedures, methods of
delivery of services, trade secrets, designs, drawings and
specifications, market studies, consultants' reports, prototypes, and
all similar property of any nature, tangible or intangible, used in
connection with the Business;
2.1.8 INTELLECTUAL PROPERTY. All patents, trademarks,
trademark registrations, trade names, service marks, copyrights and
copyright registrations of used in connection with the Business,
including, without limitation, those described in SCHEDULE 2.1.8;
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2.1.9 GOODWILL. All goodwill incident to the Business,
including but not limited to the value of the names associated with the
Business and the value of good customer relations;
2.1.10 INVENTORY. All Closing Inventory;
2.1.11 PATIENT FUNDS. All prepaid rents, deposits and escrow
accounts of, or for the benefit of, the Facility's patients at the
Closing Date;
2.1.12 COMPUTER SOFTWARE. All computer applications software,
owned or licensed, whether for general business usage (e.g.,
accounting, word processing, graphics, spreadsheet analysis, etc.), or
specific, unique-to-the-business usage, and all computer operating,
security or programming software, owned or licensed and used in the
operation of the Business; and
2.1.13 OTHER INTANGIBLE ASSETS. All other intangible assets
(including all causes of action, rights of action, contract rights and
warranty and product liability claims against third parties) relating
to the Purchased Assets or the Business.
2.2 EXCLUDED ASSETS. Notwithstanding Section 2.1, the following assets
(collectively, the "Excluded Assets") shall be excluded from this Agreement, and
shall not be assigned or transferred to Purchaser:
2.2.1 CASH. All other cash, cash equivalents on hand or in
bank accounts, short-term notes receivable and unbilled costs and fees
up through and including the Closing Date;
2.2.2 CONSIDERATION. The consideration paid to Seller pursuant
to this Agreement;
2.2.3 PENSIONS. Assets constituting any pension or other funds
for the benefit of Employees existing on the Closing Date;
2.2.4 CORPORATE BOOKS. Corporate minute book and stock book of
Seller;
2.2.5 THIRD PARTY CLAIMS. Any claims and rights against third
parties (including, without limitation, insurance carriers) to the
extent they relate to liabilities or obligations that are not assumed
by Purchaser hereunder (except the amount of costs and expenses
Purchaser shall have incurred with respect to such claims and rights);
2.2.6 TAXES. Claims for refunds of Taxes and other charges
imposed by any Governmental Authority;
2.2.7 ACCOUNTS RECEIVABLE. All Accounts Receivable existing on
the Closing Date;
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2.2.8 PREPAID EXPENSES. All Prepaid Expenses of, or for the
benefit of, the Purchased Assets or the Business at the Closing Date;
and
2.2.9 OTHER ASSETS. Assets listed on SCHEDULE 2.2.9.
2.3 LICENSE TO USE CERTAIN ASSETS. To the extent that there are any
tangible or intangible assets used by Seller in connection with the Purchased
Assets or the Business that are not specifically designated as Excluded Assets
by Section 2.2 (without reference to this Section), the Purchased Assets shall
include an irrevocable, nonexclusive, perpetual, paid-up, royalty-free,
transferrable license to utilize such assets in connection with the operation of
the Business after the Closing Date. To the extent that any such assets may not
be licensed, Seller shall take all steps required to assure that Purchaser
obtains the benefit of such assets.
ARTICLE III. CONSIDERATION AND TERMS
3.1 CONSIDERATION FOR PURCHASED ASSETS.
3.1.1 PURCHASE PRICE. The aggregate consideration to be paid
by Purchaser for the Purchased Assets and the Business (the "Purchase
Price") shall be $5,358,250.
3.1.2 OTHER CONSIDERATION. As additional consideration,
Purchaser shall also assume the Assumed Liabilities at the time of
Closing.
3.2 PAYMENT. The Purchase Price shall be paid as follows:
3.2.1 INITIAL DEPOSIT. Upon the execution of this Agreement
and the Escrow Agreement, Purchaser shall deliver to Escrow Agent by
wire transfer of federal funds an initial good faith deposit towards
the Purchase Price in the amount of $12,500 (the "Initial Escrow
Deposit") to be held pursuant to the Escrow Agreement.
3.2.2 FINAL DEPOSIT. Upon satisfaction or waiver of
Purchaser's condition precedent set forth in Section 10.19, Purchaser
shall deliver to Escrow Agent by wire transfer of federal funds a final
good faith deposit towards the Purchase Price in the amount of $12,500
(the "Final Escrow Deposit") to be held pursuant to the Escrow
Agreement (together, the Initial Escrow Deposit and the Final Escrow
Deposit shall be referred to as the "Escrow Deposit").
3.2.3 CASH. At Closing, Purchaser shall deliver to Seller by
wire transfer the Purchase Price less the amount of the Escrow Deposit.
3.2.4 ESCROW DEPOSIT. At Closing, provided this Agreement has
not been terminated pursuant to Article XIII and Seller is not
otherwise is default hereunder, the Escrow Deposit shall be released by
Escrow Agent in favor of Seller in accordance with the terms of this
Agreement and the Escrow Agreement.
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3.3 ALLOCATION OF PURCHASE PRICE. Within two weeks from the date of
this Agreement, the Purchase Price shall be allocated among the Purchased Assets
and the Business as mutually agreed by the Parties and shall be consistent with
Purchaser's appraisal. Upon the parties reaching an agreement with respect to
such allocation, it shall be set forth in SCHEDULE 3.3. Purchaser and Seller
shall report the federal, state and local income and other tax consequences of
the purchase and sale contemplated hereby in a manner consistent with such
allocation, and shall not take any position inconsistent therewith upon
examination of any tax return, in any refund claim, in any litigation or
otherwise.
ARTICLE IV. ASSUMPTION OF LIABILITIES; EMPLOYEE MATTERS
4.1 GENERAL LIMITATION ON ASSUMPTION OF LIABILITIES. Except for
Permitted Encumbrances and as otherwise provided in Sections 4.2, 4.3 and 4.4
below, Seller shall transfer the Purchased Assets to Purchaser free and clear of
all Encumbrances, and without any assumption of liabilities and obligations, and
Purchaser shall not, by virtue of its purchase of the Purchased Assets, assume
or become responsible for any liabilities or obligations of Seller or any other
Person. For purposes of this Section 4.1 the phrase "liabilities and
obligations" shall include, without limitation, any direct or indirect
indebtedness, guaranty, endorsement, claim, loss, damage, deficiency, cost,
expense, obligation or responsibility, fixed or unfixed, known or unknown,
asserted or unasserted, xxxxxx or inchoate, liquidated or unliquidated, secured
or unsecured.
4.2 ASSUMED LIABILITIES AND OBLIGATIONS OF SELLER. On the Closing Date,
Purchaser shall acquire the Purchased Assets subject only to, and shall
undertake, assume, perform and otherwise pay, satisfy and discharge, and hold
Seller harmless from the following liabilities and obligations, excluding any
liabilities and obligations to Affiliates of Seller (collectively, the "Assumed
Liabilities"):
(i) all obligations of Seller accruing subsequent to the Closing
Date under the Contracts contemplated by Section 2.1.4,
provided that the rights thereunder have been duly and
effectively assigned to Purchaser; and
(ii) all obligations of Seller accruing after the Closing Date
under the Permits described in Section 2.1.6, provided that
the rights thereunder have been duly and effectively assigned
to Purchaser.
Except for the Assumed Liabilities, Purchaser does not and shall not
assume or in any way undertake to pay, perform, satisfy or discharge any other
liability of Seller existing on the Closing Date or arising out of any
transactions entered into, or any state of facts existing, prior to the Closing
Date (the "Retained Liabilities"), and Seller agrees to pay and satisfy when due
all of Seller's Retained Liabilities. Except for the obligations and liabilities
included in the Assumed Liabilities, the term "Retained Liabilities" shall
include, without limitation, liabilities:
(i) for or in connection with any dividends, distributions,
redemptions, or Security Rights with respect to any security
of Seller;
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(ii) arising out of any transaction affecting Seller or obligations
incurred by Seller after Closing;
(iii) for expenses or fees incident to or arising out of the
negotiation, preparation, approval or authorization of this
Agreement and the consummation of the transactions
contemplated hereby, including, without limitation, all legal
and accounting fees and all brokers or finders fees or
commissions payable by Seller;
(iv) under or arising out of this Agreement;
(v) against which Seller is insured or otherwise indemnified or
which would have been covered by insurance (or
indemnification) but for a claim by the insurer (or the
indemnitor) that the insured (or the indemnities) had breached
its obligations under the policy of insurance (or the contract
of indemnity) or had committed fraud in the insurance
application;
(vi) to any Related Party;
(viii) to indemnify Seller's officers, directors, shareholders,
Employees or agents;
(ix) federal, state or local tax liabilities or obligations of
Seller in respect to periods prior to Closing, and the
transactions contemplated hereunder, including, without
limitation, income taxes payable under the Code, any income
tax, any franchise tax, any tax recapture, any FICA, workers'
compensation, vacation liability and other employee benefits,
any insurance premiums, rents, or other accruals and any and
all other taxes or amounts due or payable for a period prior
to Closing; notwithstanding the foregoing, all transfer taxes,
and all other impositions of tax arising solely by reason of
the transfers contemplated by this Agreement (excluding all
federal, state and local income and gross receipt taxes on the
earnings or gross receipts of Seller prior to the Closing
Date, which shall remain the sole responsibility of Seller,
and sales tax assessed on the transfer of vehicles which shall
be the sole responsibility of Purchaser) shall be the
responsibility of and shall be borne equally by Seller and
Purchaser (any real estate and personal property taxes for the
year in which Closing occurs shall be pro-rated to the Closing
Date [based on a calendar year or fiscal year for which such
taxes are levied basis], if the tax rates for the year in
which Closing occurs shall not be fixed prior to the Closing
Date for a particular item of the Purchased Assets, the
pro-ration of taxes thereon shall be based upon the tax rate
for the year prior to Closing applied to the latest assessment
valuation; however, in the event that any such taxes are
increased or decreased for the year in which Closing occurs,
Seller or Purchaser shall then reimburse the other party for
amounts in excess of or less than the proration as determined
as of the Closing Date);
(x) for long term indebtedness and other obligations or guarantees
of Seller;
(xi) for Current Liabilities of Seller at the Closing Date;
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(xii) if applicable, for or in connection with any cost reports
required to be filed by Seller with respect to periods prior
to Closing; and
(xiii) for Accrued Expenses and Payables of Seller at the Closing Date.
4.3 OFFER OF EMPLOYMENT. Purchaser shall offer employment on and as of
Closing, on an at-will basis, to substantially all Employees actively at work in
substantially similar jobs, at substantially the same base salaries or wages and
substantially the same benefits as were paid or provided by Seller immediately
prior to the Closing Date.
4.4 VACATION, WORKERS' COMPENSATION AND DISABILITY CLAIMS.
4.4.1 SELLER'S LIABILITY. Seller shall remain liable for all
liability for all accrued vacation entitlements, workers' compensation,
disability and occupational diseases of or with respect to the
Employees attributable to entitlements, injuries, claims, conditions,
events and occurrences occurring on or before the Closing Date,
regardless of the date on which the actual claim is made.
4.4.2 PURCHASER'S LIABILITY. Purchaser shall be liable for all
liability for all vacation entitlements, workers' compensation,
disability and occupational diseases of or with respect to the
Employees hired by Purchaser attributable to entitlements, injuries,
claims, conditions, events and occurrences first occurring after the
Closing Date.
4.4.3 WORKERS' COMPENSATION; UNEMPLOYMENT COMPENSATION.
SCHEDULE 4.4.3 attached hereto sets forth a true and correct summary of
the following with respect to Seller and the Employees:
(i) a listing of all workers' compensation contracts;
(ii) the workers' compensation loss experience for the past
three years;
(iii) a summary report and experience rating for unemployment
compensation; and
(iv) the turnover rates for the Facility.
ARTICLE V. CLOSING
5.1 TIME; LOCATION. The consummation of the purchase and sale of the
Purchased Assets shall take place on or before January 2, 1998 (the "Closing"),
unless extended by mutual agreement of the Parties hereto. The date of the
Closing shall be referred to as the "Closing Date." The Closing shall take place
at such time, date and place as may be mutually agreed upon by the Parties.
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5.2 DOCUMENTS. At Closing, Seller shall execute and deliver the
following instruments of transfer and assignment:
5.2.1 DEEDS. Duly executed special warranty deeds in favor of
Purchaser or Purchaser's designee, in recordable form, transferring
good and marketable fee simple title to the Real Property Owned,
subject only to Permitted Encumbrances, and such affidavits or other
instruments as Purchaser's title insurance company may reasonably
request, including, but not limited to, (i) exceptions for (A)
judgments, bankruptcies, taxes and municipal claims, (B) parties in
possession other than current occupants pursuant to agreements with
Seller, (C) mechanics' or materialmens' liens and (D) encroachments or
survey discrepancies of any nature; (ii) payoff letters, lien releases
and satisfaction pieces and (iii) gap indemnities;
5.2.2 XXXX OF SALE. A general xxxx of sale, assignment and
assumption substantially in the form of EXHIBIT 5.2.2 hereto,
transferring to Purchaser good and indefeasible title to all of the
tangible personal property included in the Purchased Assets, subject
only to Permitted Encumbrances and the Assumed Liabilities and
assigning to Purchaser, to the extent assignable, Seller's right, title
and interest in each of the contracts, permits and other agreements
included in the Purchased Assets, together with all consents of third
parties that are required to make each such assignment effective to
such third parties;
5.2.3 TITLE CERTIFICATES. Certificates of title to all
vehicles included in the Purchased Assets with assignments to
Purchaser;
5.2.4 PROPERTY TAX STATEMENTS. To the extent not delivered
prior to Closing, all real estate and personal property tax statements
or bills for or relating to the Real Property or any of the other
Purchased Assets for the applicable current tax year or years, and all
tax assessments or notices thereof upon which such taxes are based;
5.2.5 PLANS AND SPECIFICATIONS. To the extent not delivered
prior to Closing, all plans, specifications and other drawings used in
the construction of the Facility or any renovations thereof (including,
without limitation, any as-built plans and architectural
specifications) and all guarantees and warranties made by third parties
with respect to the improvements, buildings, personalty or any of the
other Purchased Assets;
5.2.6 PERMITS; SURVEYS; STUDIES. To the extent not delivered
prior to Closing, all building permits, zoning permits, occupancy
permits, subdivision plans, surveys, engineering reports, geotechnical
reports, soils studies and hazardous waste or other environmental
studies prepared within two years before the date hereof, for or
relating to the Facility;
5.2.7 CONTRACTS AND OTHER PERMITS. To the extent not delivered
prior to Closing, all Contracts, Permits, or other instruments or
agreements relating to the ownership, operation, use, occupancy,
licensure, accreditation or maintenance of the Business;
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5.2.8 CLOSING DOCUMENTS. To the extent not delivered prior to
Closing, the documents referred to in Section 8.1.2 and Section 8.1.8;
and
5.2.9 OTHER DOCUMENTS. The Ancillary Agreements, and such
additional instruments of conveyance and transfer as Purchaser may
reasonably require in order to more effectively vest in it, and put it
in possession of, the Purchased Assets.
5.3 REASONABLE STEPS. Seller shall make such reasonable efforts as may
be appropriate so that on the Closing Date, Purchaser shall be placed in actual
possession and control of all of the Purchased Assets.
ARTICLE VI. REPRESENTATIONS AND WARRANTIES OF SELLER
As an inducement to Purchaser to enter into this Agreement and to
consummate the transactions contemplated hereby, Seller represents and warrants
to Purchaser, that each of the following representations and warranties is true
and correct as of the date hereof:
6.1 ORGANIZATION, GOOD STANDING AND POWER. Seller is a corporation duly
organized, validly existing and in good standing under the laws of its state of
incorporation, and has all requisite corporate power and authority to execute
and deliver this Agreement and the Ancillary Agreements to which it is a party,
to consummate the transactions contemplated hereby and thereby and to perform
all the terms and conditions hereof and thereof and to be performed by it.
6.2 AUTHORIZATION OF AGREEMENT. Seller has taken all necessary
corporate action to authorize the execution and delivery of this Agreement and
the Ancillary Agreements to which it is a party, the performance by it of all
terms and conditions hereof and thereof to be performed by it and the
consummation of the transactions contemplated hereby and thereby.
6.3 ENFORCEABILITY. This Agreement constitutes, and the Ancillary
Agreements to which Seller is party, upon Seller's execution and delivery
thereof, will constitute the legal, valid and binding obligations of Seller,
enforceable in accordance with their terms except to the extent that
enforceability may be limited by bankruptcy, insolvency, moratorium or other
similar laws presently or hereafter in effect relating to or affecting the
enforcement of creditors' rights generally and by general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law).
6.4 NO VIOLATION; CONSENTS. The execution, delivery and performance by
Seller of this Agreement and the Ancillary Agreements to which Seller is a
party, and the consummation of the transactions contemplated hereby and thereby
will not (with or without the giving of notice or the lapse of time, or both)
(i) violate any provision of the charter or bylaws of Seller; (ii) except with
respect to notices and consents (if any) required to be given by Seller to any
Accreditation Body or Governmental Authority in connection with the sale and
change of ownership of the Purchased Assets and the Business, violate or require
any consent, authorization or approval of, or exemption by, or filing under any
provision of any law, statute, rule or regulation to which Seller, the Business
or the Purchased Assets are subject; (iii) violate any judgment, order, writ or
decree of any court applicable to Seller, the Business or the Purchased
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Assets; (iv) except as identified on SCHEDULE 2.1.4, conflict with, result in a
breach of, constitute a default under (or a default that might, with the passage
of time or the giving of notice or both, constitute a default), or accelerate or
permit the acceleration of the performance required by, or require any consent,
authorization or approval under any contract or other instrument, document or
undertaking to which Seller is a party or any of the Purchased Assets is bound
or (v) result in the creation or imposition of any Encumbrances upon the
Purchased Assets.
6.5 FINANCIAL STATEMENTS. Seller has delivered to Purchaser true and
complete copies of the reviewed (i) balance sheets of the Business at June 30,
1997, 1996 and 1995, and the related statements of income and cash flows for the
years then ended and (ii) monthly statements of profit and loss for the first
four months of fiscal year 1998 with respect to the operation of the Facility
and, in addition, Seller shall provide Purchaser, as promptly as the same become
available through the Closing Date, but no later than 15 days after the last day
of each month, monthly statements of profit and loss of Seller for the Facility.
In the event that the Closing Date occurs within the first 15 days of a month,
notwithstanding anything to the contrary herein, Seller shall furnish Purchaser
statements of profit and loss for the then immediately preceding month no later
than three days prior to the Closing Date. True and correct copies of such
financial statements are attached hereto as SCHEDULE 6.5. The foregoing
financial statements have been prepared from the Books and Records of Seller in
accordance with GAAP consistently applied throughout the periods involved except
as may be noted therein. Such financial statements, including the related notes,
are true and correct and fairly present the financial position of the Business
at the dates indicated and the results of operations and cash flows of the
Business for the periods then ended in accordance with GAAP.
6.6 RESERVED.
6.7 INVENTORY. The Inventory was or will be acquired and maintained in
accordance with the regular business practices of Seller, consists or will
consist of new and unused items of a quality and quantity usable or salable in
the ordinary course of business consistent with past practice, and is or will be
valued in accordance with GAAP consistently applied.
6.8 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in
SCHEDULE 6.8 hereto, since June 30, 1997 in connection with the Business, Seller
has not:
(i) amended in any material respect or terminated any
Contract or Permit other than in the ordinary course
of business consistent with past practice;
(ii) suffered the occurrence of any events that,
individually or in the aggregate, have had, or could
reasonably be expected to have, a material adverse
effect on results of operations of the Business,
including any damage or destruction by fire, storm or
similar casualty, whether or not covered by
insurance;
(iii) sold, transferred, replaced or leased any of the
Purchased Assets, except for transactions in the
ordinary course of business consistent with past
practice;
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(iv) waived or released any material rights with respect
to the Purchased Assets or the Business;
(v) transferred or granted any rights to any Proprietary
Rights;
(vi) entered into any transaction or made any commitments
(for capital expenditures or otherwise) other than in
the ordinary course of business consistent with past
practice;
(vii) changed its methods of accounting;
(viii) increased the compensation of any of the Employees,
except following normal review procedures or as
reasonably deemed necessary in the ordinary course of
business consistent with past practice;
(ix) suffered any major or key personnel changes;
(x) materially altered its conduct in its relations with
suppliers and patients; or
(xi) materially altered its marketing efforts with respect
to the Business.
6.9 REAL PROPERTY.
6.9.1 TITLE TO PROPERTIES; ABSENCE OF LIENS AND ENCUMBRANCES.
Seller owns and will transfer to Purchaser at Closing good, marketable
and indefeasible title to all of the Purchased Assets owned by Seller
subject to Closing, including, without limitation, the Real Property,
free and clear of all Encumbrances, other than Permitted Encumbrances.
Seller has the right to quiet enjoyment of all Real Property Leased in
which Seller holds a leasehold interest for the full term, including
all renewal rights, of the lease or similar agreement relating thereto.
Copies of all title insurance policies and surveys written in favor of
Seller relating to the Real Property have been delivered to Purchaser.
6.9.2 STRUCTURES AND IMPROVEMENTS. To Seller's Knowledge,
Seller represents and warrants that all structures and other
improvements on the Real Property are in good order and repair and free
from any structural defects.
6.9.3 BOUNDARIES; LOCATION. Seller represents and warrants
that the structures and other improvements on the Real Property are
within the lot lines and do not encroach on the properties of any other
Person. Seller further represents and warrants that each parcel of Real
Property is considered a separate parcel of land for taxing and
conveyancing purposes.
6.9.4 FLOOD HAZARD AREA. Xxxxxx represents and warants that no
portion of the Real Property Owned is located in a flood plain, flood
hazard area or designated wetlands area. Seller has disclosed that the
Real Property Leased is in a flood hazard area. Selr
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represents and warrants that it maintains folld insureance equal to or
greater than the value of the Real Property Leased.
6.9.5 USE AND OPERATION. Seller represents and warrants that
the use and operation of the Real Property conforms to all applicable
building, zoning, safety and subdivision laws, Environmental Laws and
other Legal Requirements, and all restrictive covenants and
restrictions and conditions affecting title.
6.9.6 UTILITIES. Seller represents and warrants that all
utilities (including water, gas, electric, storm and sanitary sewage
and telephone utilities) required to operate the Facility are available
to the Facility and such utilities enter the boundaries of such
Facility through adjoining public streets, permanent easements or
rights-of-way of record in favor of Seller. To Seller's Knowledge, such
utilities are all connected pursuant to valid permits, are all in good
working order and are adequate to service the operations of the
Facility as currently conducted and permit full compliance with all
Legal Requirements. Seller has not received any written notice of any
proposed, planned or actual curtailment of service of any utility
supplied to the Facility.
6.9.7 ASSESSMENTS; NOTICES. Seller has not received any
written or oral notice of assessments for public improvements against
the Real Property or any written or oral notice or order by any
Governmental Authority, any insurance company that has issued a policy
with respect to any of such properties or any board of fire
underwriters or other body exercising similar functions that relates to
violations of building, safety or fire ordinances or regulations, that
claims any defect or deficiency with respect to any of such properties
or requests the performance of any repairs, alterations or other work
to or in any of such properties or in the streets bounding the same.
6.9.8 CONDEMNATION. Seller represents and warrants that there
is no pending condemnation, expropriation, eminent domain or similar
proceeding affecting all or any portion of the Real Property.
6.9.9 ACCESS. Seller represents and warrants that all present
driveways and other access routes to the Real Property are from public
streets and no other Person has any right to use any such driveways or
other access routes.
6.10 PROPRIETARY RIGHTS.
6.10.1 LOGOS AND TRADENAMES. SCHEDULE 2.1.8 hereto sets forth
a correct and complete list of all patents, logos, trademarks, trade
names, service marks, copyrights and applications or registrations
therefor used in and material to the Business (collectively, the
"Proprietary Rights").
6.10.2 LICENSES. Except as disclosed in SCHEDULE 2.1.8: (i)
Seller owns or possesses adequate licenses or other valid rights to use
(without the making of any payment to others or the obligation to grant
rights to others in exchange) all the Proprietary Rights; (ii) the
Proprietary Rights included in the Purchased Assets constitute
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all the material rights necessary to conduct the Business in accordance
with past practice and are being conveyed to Purchaser together with
the other Purchased Assets; (iii) the validity of the Proprietary
Rights and the rights therein of Seller have not been questioned in any
litigation to which Seller is a party, nor, to Seller's Knowledge, is
any such litigation threatened; and (iv) the conduct of the Business
does not conflict with patent rights, licenses, trademark rights, trade
name rights, copyrights or other intellectual property rights of
others.
6.10.3 INFRINGEMENT. Except as disclosed in SCHEDULE 2.1.8
hereto, Seller does not have Knowledge that any material use of any
Proprietary Rights owned by Seller has heretofore been, or is now
being, made by any Person other than Seller, and Seller has no
Knowledge of any infringement of any Proprietary Rights owned or
licensed by Seller. No present or former director, officer, Employee or
consultant of Seller has any interest in any of the Proprietary Rights.
6.11 CONTRACTS AND COMMITMENTS. Except as listed and described on
SCHEDULE 1.50 and SCHEDULE 2.1.4, Seller is not with respect to the Business a
party to any written or oral:
(i) Contract for the future purchase of, or payment for,
supplies or products, or for the performance of
services by another party, involving in any one case
$10,000 or more;
(ii) Contract to sell or supply products or to perform
services, involving in any one case $10,000 or more
(except for any Patient's Agreement);
(iii) Contract continuing over a period of more than six
months from the date hereof or exceeding $10,000 in
value (except for any Patient's Agreement);
(iv) representative, sales agency, dealer or distributor
Contract;
(v) lease under which Seller is either lessor or lessee
other than with respect to the Real Property Leased;
(vi) note, debenture, bond, conditional sale agreement,
equipment trust agreement, letter of credit
agreement, loan agreement or other Contract or for
the borrowing or lending of money (including without
limitation loans to or from Employees) or guarantee,
pledge or undertaking of the indebtedness of any
other Person;
(vii) Contract for any charitable or political
contribution;
(viii) Contract limiting or restraining Seller or any
successor or assign from engaging or competing in any
likeness of business with any Person;
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(ix) license, franchise, distributorship or other
agreement, including those that relate in whole or in
part to any patent, trademark, trade name, service
xxxx or copyright or to any ideas, technical
assistance or other know-how of or used by the
Business;
(x) Contract or commitment to assign, option, sell,
transfer or otherwise convey any right, title or
interest of Seller in and to all or any portion of
the Business; or
(xi) any other material Contract not made in the ordinary
course of business consistent with past practice.
To Seller's Knowledge, each of the contracts and other instruments,
documents and undertakings listed on SCHEDULE 1.50, SCHEDULE 2.1.4, SCHEDULE
1.64 and SCHEDULE 1.65 is valid and enforceable in accordance with its terms,
the parties thereto are in compliance with the provisions thereof, neither party
is in default in the performance, observance or fulfillment of any material
obligation, covenant or condition contained therein, and no event has occurred
that with or without the giving of notice or lapse of time, or both, would
constitute a default thereunder and (ii) except as set forth on SCHEDULE 1.50,
SCHEDULE 2.1.4, SCHEDULE 1.64 and SCHEDULE 1.65, no advance payments have been
received by Seller by or on behalf of any party to any of the contracts and
other instruments, documents and undertakings listed thereon for services to be
rendered or products to be delivered by such party after the Closing Date. Any
contracts that cannot be transferred or require consent or approval for the
transfer thereof are specifically identified on SCHEDULE 1.50, SCHEDULE 2.1.4,
SCHEDULE 1.64 and SCHEDULE 1.65 hereto as nontransferable or requiring such
consent or approval.
6.12 PERMITS, LICENSES. Seller has all Permits that are required to
operate the Business and the Facility as a skilled nursing facility as that term
is defined by the Department of Health (including without limitation those
required under any Environmental Law) and Seller is in substantial compliance
with the terms and conditions of the Permits. SCHEDULE 2.1.6 hereto sets forth a
correct and complete list of all Permits, each one of which is in full force and
effect. To Seller's Knowledge, no suspension or cancellation of any of the
Permits is threatened and no cause exists for such suspension or cancellation.
Any Permits that cannot be transferred or require consent or approval for the
transfer thereof are specifically identified on SCHEDULE 2.1.6 hereto as
nontransferable or requiring such consent or approval.
6.13 COMPLIANCE WITH LAWS. Except as described in SCHEDULE 6.13 hereto,
Seller has at all times conducted, and is presently conducting, the Business so
as to comply in all material respects with all Legal Requirements applicable to
the conduct of operation of the Business or the ownership or use of the
Purchased Assets.
6.14 LEGAL PROCEEDINGS. Except as described in SCHEDULE 6.14 hereto,
there is no claim, action, suit, proceeding, investigation or inquiry pending
before any Governmental Authority or, to Seller's Knowledge, threatened against
Seller with respect to the Business or any of the Purchased Assets owned or used
by it in connection therewith, or relating to the transactions contemplated by
this Agreement, nor to Seller's Knowledge is there any basis for
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any such claim, action, suit, proceeding, investigation, or inquiry. Except as
set forth on SCHEDULE 6.14 hereto, Seller is not a party to or subject to the
provisions of any judgment, order, writ, injunction, decree or award of any
court, arbitrator or governmental, regulatory or administrative official, body
or authority that relates to the Business or the Purchased Assets owned or used
by Seller in connection therewith that might affect the transactions
contemplated by this Agreement.
6.15 ABSENCE OF UNDISCLOSED LIABILITIES. Except as set forth in
SCHEDULE 6.15, Seller has no liabilities or obligations (as defined in Section
4.1) relating to the Business except (i) those liabilities and obligations
reserved and reflected on the financial statements of Seller previously provided
to Purchaser in the amounts shown therein and not heretofore paid or discharged;
(ii) those liabilities and obligations arising in the ordinary course of
business consistent with past practice under any Contract or commitment
specifically disclosed on SCHEDULE 2.1.4 hereto and not required to be disclosed
because of the term or amount involved; and (iii) those liabilities and
obligations incurred in the ordinary course of business consistent with past
practice since the financial statements dated June 30, 1997 provided to
Purchaser, and none of which, individually or in the aggregate, has had or will
have a material adverse effect on the Business or the financial condition of
Seller or the Facility.
6.16 BOOKS AND RECORDS. All books of account and other financial
records of Seller directly relating to the Business (the "Books and Records")
are materially complete and correct and have been made available to Purchaser.
All of the Books and Records have been prepared and maintained in accordance
with good business practices and, where applicable, in conformity with GAAP
(except as otherwise stated therein) and in compliance in all material respects
with all Legal Requirements.
6.17 EMPLOYEES. SCHEDULE 1.21 sets forth a true and correct list of the
following for the Facility: (i) all individuals employed by Seller in the
conduct of the Business; (ii) total wage costs; (iii) wage/salary grade
structure and (iv) each Employee's (A) present position and department, (B) job
description, (C) rate of compensation and (D) service credited for purposes of
vesting and eligibility under each Benefit Plan.
6.18 LABOR DISPUTES. Except as described in SCHEDULE 6.18 hereto, there
are no material discrimination complaints nor any other kind of employment or
labor related disputes against Seller in connection with the Business pending
before or, to Seller's Knowledge, threatened before any federal, state or local
court or agency, and to Seller's Knowledge, no material dispute respecting
minimum wage or overtime claims or other conditions or terms of employment
exists. The Business has not experienced any material labor disputes or any
material work stoppage due to labor disagreements within the past three years.
With respect to the Business and except to the extent set forth in SCHEDULE
6.18: (i) there is no unfair labor practice charge or complaint against Seller
pending or, to Seller's Knowledge, threatened, before the National Labor
Relations Board; (ii) there is no labor strike, slowdown or stoppage pending or,
to Seller's Knowledge, threatened against or affecting Seller; and (iii) no
question concerning representation has been raised within the past three years,
or to Seller's Knowledge, is threatened respecting the Employees.
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6.19 EMPLOYEE BENEFITS.
6.19.1 BENEFIT PLANS. SCHEDULE 6.19 contains a complete list
of each employee benefit plan (written and unwritten) subject to ERISA
and any other (written or unwritten) profit sharing, pension, savings,
deferred compensation, fringe benefit, insurance, medical, medical
reimbursement, life, disability, accident, post-retirement health or
welfare benefit, stock option, stock purchase, sick pay, vacation,
employment, severance, termination or other plan or arrangement (each,
a "Benefit Plan") maintained by or with respect to which Seller has any
liability or obligation, whether actual or contingent, funded or
unfunded, with respect to the Employees or their respective
beneficiaries.
6.19.2 PLAN LIABILITY. Seller has not taken any action that
may result in Purchaser being a party to, or bound by, an ERISA Plan,
and Purchaser shall have no liability under, or be subject to any
liability on account of, any ERISA Plan or Benefit Plan following the
consummation of the transaction contemplated hereby.
6.19.3 RETIREMENT BENEFITS. No ERISA Plan or other employee
arrangement has provided for the payment of retiree benefits by
Purchaser.
6.20 NO FINDER. Seller has not taken any action that would give to any
Person a right to a finder's fee or any type of brokerage commission in relation
to, or in connection with, the transactions contemplated by this Agreement.
6.21 CONDITION OF EQUIPMENT. To Seller's Knowledge, except as set forth
on SCHEDULE 6.21, all equipment that is part of the Purchased Assets is in good
operating condition and repair (subject only to routine maintenance and repair)
and usable in the conduct of the Business consistent with past practice.
6.22 AFFILIATE TRANSACTIONS. Except as set forth in SCHEDULE 6.22
hereto, Seller and its Affiliates provide no services or products to the
Business.
6.23 ENVIRONMENTAL MATTERS. Except as disclosed in SCHEDULE 6.23:
6.23.1 COMPLIANCE; NO LIABILITY. Seller has operated the
Business and each parcel of Real Property in material compliance with
all applicable Environmental Laws. Seller is not subject to any
liability, penalty or expense (including legal fees), and Purchaser
will not suffer or incur any loss, liability, penalty or expense
(including legal fees) by virtue of any violation of any Environmental
Law occurring prior to the Closing, any environmental activity
conducted on or with respect to any property by Seller at or prior to
the Closing or any environmental condition existing on or with respect
to any property at or prior to the Closing, in each case whether or not
Seller permitted or participated in such act or omission.
6.23.2 TREATMENT; CERCLA. Seller has not treated, stored,
recycled or disposed of any hazardous material, and to Seller's
Knowledge, no other Person has treated, stored,
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recycled or disposed of any hazardous material on any part of the Real
Property. To Seller's Knowledge, there has been no release of any
hazardous material at, on or under any Real Property. Seller has not
transported any hazardous material or arranged for the transportation
of any hazardous material to any location that is listed or proposed
for listing on the National Priorities List pursuant to Superfund, on
CERCLA or any other location that is the subject of federal, state or
local enforcement action or other investigation that may lead to claims
against Seller for cleanup costs, remedial action, damages to natural
resources, to other property or for personal injury including claims
under Superfund. None of the Real Property is listed or, to Seller's
Knowledge, proposed for listing on the National Priorities List
pursuant to Superfund, CERCLA or any state or local list of sites
requiring investigation or cleanup.
6.23.3 NOTICES; EXISTING CLAIMS; CERTAIN HAZARDOUS MATERIALS;
STORAGE TANKS. Seller has not received any request for information,
notice of claim, demand or other notification that it is or may be
potentially responsible with respect to any investigation, abatement or
cleanup of any threatened or actual release of any hazardous material.
Seller is not required to place any notice or restriction relating to
the presence of any hazardous material at any Real Property or in any
deed to any Real Property. Seller has provided to Purchaser a list of
all sites to which Seller has transported any hazardous material for
recycling, treatment, disposal, other handling or otherwise. There has
been no past, and there is no pending or contemplated, claim by Seller
under any Environmental Law or Legal Requirement based on actions of
others that may have impacted on the Real Property, and Seller has not
entered into any agreement with any Person regarding any Environmental
Law, remedial action or other environmental liability or expense. All
storage tanks located on the Real Property, whether underground or
aboveground, are disclosed on SCHEDULE 6.23, and, to Seller's
Knowledge, all such tanks and associated piping are in sound condition
and are not leaking and have not leaked.
6.24 INSURANCE. SCHEDULE 6.24 sets forth a complete list of all
insurance policies with respect to which Seller is the owner, insured or
beneficiary for the past three years and all insurance policies known by Seller
to have been maintained by any other Person which may provide any coverage for
liabilities relating in any manner to any Environmental Law. SCHEDULE 6.24 also
sets forth a true and correct summary of the loss experiences for the past three
years under each such policy. Seller will have no liability after Closing for
retrospective or retroactive premium adjustments. All of Seller's insurance
policies covering products liability and general liability have been
"occurrence" policies and not "claims made" policies. Following the Closing,
Seller shall, to the extent that coverage under its insurance policies extends
to include the Business, (i) take no action to eliminate or reduce such
coverage, other than normal elimination or reduction of coverage as they occur
by virtue of the filing of claims in the ordinary course under such insurance
policies, (ii) pay when due any premiums under such policies for periods,
including retrospective or retroactive premium adjustments and (iii) use its
best efforts to assist in filing and processing claims under and otherwise
cooperate with Purchaser to allow Purchaser, in its own name, or on behalf of
Seller, to obtain all coverage benefits applicable to the Business under such
insurance policies, including the execution of assignments or powers of attorney
for
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the benefit of Purchaser. Any proceeds of insurance paid by an insurer to Seller
for claims of Purchaser made in accordance with this Section shall be promptly
paid to Purchaser.
6.25 NO SIGNIFICANT ITEMS EXCLUDED. Except for Excluded Assets, there
are no assets, properties, contracts, permits or other items of Seller or any
Related Party that are of material importance to the ongoing operation of the
Business by Purchaser in substantially the same manner in which the Business has
been conducted by Seller prior to the date of this Agreement.
6.26. SURVEYS. Seller has provided Purchaser with copies of Seller's
federal and/or state surveys or inspections and any plans of correction for the
current year and the two immediately preceding years for the Facility. Each such
survey or inspection was prepared in material compliance with all applicable
Legal Requirements.
6.27. OCCUPANCY REPORTS. Seller has provided Purchaser with copies of
Seller's occupancy reports for the Facility for the last year. Each such
occupancy report was prepared based on the number of operational beds (i.e.,
double occupancy rooms were only counted as such when both beds were occupied).
6.28 DISCOUNTED RATES; RATE LIMITATIONS; FREE CARE. Attached hereto is
SCHEDULE 6.28 that sets forth a true and complete list of the following for the
Facility: (i) any services that are provided based on a discount factor from the
rates regularly charged at the Facility; (ii) any restrictions or limitations on
rates which may be charged to private pay patients for services provided at the
Facility; (iii) any percentage of beds or slots in any program at the Facility
that must be reserved for Medicare or Medicaid eligible patients and (iv) any
amount of welfare, free or charity care or discounted government assisted
patient care provided at the Facility.
6.29. TAX RETURNS. Seller has filed or caused to be filed, or will file
or cause to be filed, all Tax Returns that are required to be filed by it prior
to or on the Closing Date, pursuant to all Legal Requirements of each
Governmental Authority with taxing power over it. All such Tax Returns were or
will be, as the case may be, correct and complete in all material respects.
Seller has paid or will pay all Taxes that have or will become due as shown on
such Tax Returns or pursuant to any assessment received as an adjustment to such
Tax Returns, except (i) such Taxes, if any, as are being contested in good faith
and disclosed on SCHEDULE 6.29, (ii) such Taxes that are fully reserved against
on the financial statements of Seller previously provided to Purchaser and
(iii)Taxes accruing that are not yet due. Except as set forth on SCHEDULE 6.29,
Seller is not currently the beneficiary of any extension of time within which to
file any Tax Return. No claim has been made by any taxing authority of a
jurisdiction other than one in which the Facility is located. Seller has paid,
or will withhold and pay, all Taxes required to have been withheld in connection
with amounts paid or owing to any Employee, independent contractor, creditor,
stockholder or other third party.
6.30 COMPLETENESS AND ACCURACY. All information set forth on any
Schedule hereto is true, correct and complete. No representation or warranty of
Seller contained in this Agreement contains or will contain any untrue statement
of material fact, or omits or will omit to state any material fact necessary to
make the statements made therein, in light of the circumstances under which they
were made, not misleading. All Contracts, Permits and other documents and
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instruments furnished or made available to Purchaser by Seller are or will be
true, complete and accurate originals or copies of originals and include all
amendments, supplements, waivers and modifications thereto.
ARTICLE VII. REPRESENTATIONS AND WARRANTIES OF PURCHASER
As an inducement to Seller to enter into this Agreement and to
consummate the transactions contemplated hereby, Purchaser represents and
warrants to Seller, that each of the following representations and warranties is
true and correct as of the date hereof:
7.1 ORGANIZATION, GOOD STANDING, POWER. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of its state of
incorporation and has all requisite corporate power and authority to own and
lease the Purchased Assets, to carry on the Business and to execute and deliver
this Agreement and the Ancillary Agreements to which Purchaser is a party, to
consummate the transactions contemplated hereby and thereby and to perform all
the terms and conditions hereof and thereof to be performed by it.
7.2 AUTHORIZATION OF AGREEMENT AND ENFORCEABILITY. Purchaser has taken
all necessary corporate action to authorize the execution and delivery of this
Agreement and the Ancillary Agreements to which Purchaser is a party, the
performance by it of all terms and conditions hereof and thereof to be performed
by it and the consummation of the transactions contemplated hereby and thereby.
This Agreement constitutes, and the Ancillary Agreements, upon Purchaser's
execution and delivery thereof, will constitute, the legal, valid and binding
obligations of Purchaser, enforceable in accordance with their terms except to
the extent that enforceability may be limited by bankruptcy, insolvency,
moratorium or other similar laws presently or hereafter in effect relating to or
affecting the enforcement of creditors' rights generally and by general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).
7.3 NO VIOLATIONS; CONSENTS. Except as set forth on SCHEDULE 7.3, the
execution, delivery and performance by Purchaser of this Agreement and the
Ancillary Agreements to which Purchaser is a party and the consummation of the
transactions contemplated hereby and thereby will not (with or without the
giving of notice or the lapse of time, or both) (i) violate any provision of the
charter or bylaws of Purchaser, (ii) except with respect to notices and consents
required to be given by Purchaser to any Accreditation Body or Governmental
Authority in connection with the sale and change of ownership of the Purchased
Assets and the Business, violate, or require any consent, authorization or
approval of, or exemption by, or filing under any provision of any contract,
law, statute, rule or regulation to which Purchaser is subject, (iii) violate
any judgment, order, writ or decree of any court applicable to Purchaser, (vi)
conflict with, result in a breach of, constitute a default under (or a default
that might, with the passage of time or the giving of notice or both, constitute
a default), or accelerate or permit the acceleration of the performance required
by, or require any consent, authorization or approval under any agreement,
contract, commitment, lease or other instrument, document or undertaking to
which Purchaser is a party or (v) result in the creation or imposition of any
Encumbrance upon its assets.
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7.4. LEGAL PROCEEDINGS. There is no claim, action, suit, proceeding,
investigation or inquiry pending before any Governmental Authority or, to
Purchaser's Knowledge, threatened against Purchaser or any of Purchaser's
properties, assets, operations or businesses that might prevent or delay the
consummation of the transactions contemplated hereby.
7.5 NO FINDER. Purchaser has not taken any action which would give to
any Person a right to a finder's fee or any type of brokerage commission in
relation to, or in connection with, the transactions contemplated by this
Agreement.
ARTICLE VIII. COVENANTS OF SELLER PRIOR TO CLOSING DATE
8.1 REQUIRED ACTIONS. Between the date of this Agreement and the
Closing Date, Seller covenants that it will:
8.1.1 ACCESS TO INFORMATION. Give to Purchaser and its
counsel, accountants, environmental consultants, engineers, architects
and other representatives, for the purpose of audit, review and
copying, reasonable access, during normal business hours, to such of
the properties, books, accounts and records of Seller as are relevant
to the Purchased Assets and the Business, and furnish or otherwise make
available to Purchaser all such information concerning the Purchased
Assets and the Business as Purchaser may reasonably request.
8.1.2 SURVEYS; OCCUPANCY; OPERATIONS. Provide Purchaser with
the following:
(i) occupancy reports for the Facility, as soon as the
same become available through the Closing Date, but
no later than the last day of any given week (which
reports shall be prepared based on the number of
operational beds);
(ii) federal and/or state surveys or inspections and any
plans of correction for the Facility, as soon as the
same become available through the Closing Date, but
no later than 15 days after received by Seller;
(iii) Seller's cost reports for the current year and the
two immediately preceding years for the Facility, the
current year's Resource Utilization Group index
scores and quarterly case mix information, together
with the rate schedule for the Facility; and
(iv) monthly statements of profit and loss of Seller for
the Facility, as soon as the same become available
through the Closing Date, but no later than 15 days
after the last day of each month;
8.1.3 CONDUCT OF BUSINESS. Operate the Business in the usual,
regular and ordinary manner as such Business was conducted prior to the
date hereof and, to the extent consistent with such operation, use its
best efforts until the Closing Date to (i) preserve and keep intact the
Business; (ii) keep available the services of the Employees; (iii)
preserve its relationships with patients, referring physicians,
suppliers and others
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having business dealings with Seller in connection with the Business
and (iv) maintain current marketing activities.
8.1.4 MAINTENANCE OF PROPERTIES. Maintain the Purchased
Assets, whether owned or leased, in their good repair, order and
condition, in accordance with Seller's past practices, reasonable wear
and tear excepted;
8.1.5 MAINTENANCE OF BOOKS AND RECORDS. Maintain the Books and
Records in the usual, regular and ordinary manner, on a basis
consistent with past practice;
8.1.6 COMPLIANCE WITH APPLICABLE LAW. Comply in all material
respects with all Legal Requirements applicable to the Purchased Assets
and to the conduct of the Business;
8.1.7 PERFORMANCE OF OBLIGATIONS. Perform all the material
obligations of Seller relating to the Purchased Assets and the Business
in accordance with the past practices;
8.1.8 APPROVALS, CONSENTS. Use its best efforts to obtain in
writing as promptly as possible any approvals and consents as required
to be obtained by Seller in order to effectuate the transactions
contemplated hereby and deliver to Purchaser copies of such approvals
and consents. Accordingly, Seller shall cooperate with Purchaser's
efforts to obtain the necessary licenses to operate the Facility from
the appropriate Accreditation Bodies, including, without limitation,
the Department of Health. Upon execution and delivery of this
Agreement, Seller shall promptly:
(i) provide Purchaser with copies of all Permits;
(ii) notify each Accreditation Body and Third Party Payor
as required by any Legal Requirement of the pending
change of ownership of the Facility; and
(iii) provide such other notices as required by all Legal
Requirements including, if required, (i) notices to
the Facility's patients and (ii) notices to referral
or human service agencies. Prior to sending the
notices, Seller shall provide copies to Purchaser for
review and approval, which approval shall not be
unreasonably withheld;
8.1.9 NOTICE OF MATERIAL DAMAGE. Give to Purchaser prompt
notice in writing of any fact that, if known on the date hereof, would
have been required to be set forth or disclosed in or pursuant to this
Agreement, or which would result in the breach in any material respect
by Seller of any of its representations, warranties, covenants or
agreements hereunder;
8.1.10 PAY EMPLOYEES TO CLOSING DATE. Pay all wages, salaries
and other sums due Employees through the close of business on the day
prior to the Closing Date;
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8.1.11 COST REPORTS. File, or cause to be filed, all Medicare
and Medicaid cost reports that are required to be filed after the
Closing Date, without regard to any extensions, pursuant to all
applicable Legal Requirements. Any liability of Seller required to be
paid as a result of any such cost report for any period prior to the
Closing Date shall be paid by Seller. Purchaser shall cause any refund
which may be received after the Closing Date as a result of any such
cost report filed for any period prior to the Closing Date to be paid
to Seller;
8.1.12 TRANSFER OF EMPLOYEES. Take all reasonably necessary
steps to transfer to Purchaser the employment of all Employees electing
to continue their employ with Purchaser as of the Closing Date;
8.1.13 COMPLIANCE WITH AGREEMENT. Not undertake any course of
action inconsistent with satisfaction of the conditions applicable to
it set forth in this Agreement, and use all reasonable efforts to do
all such acts and take all such measures as may be reasonably necessary
to comply with the representations, agreements, conditions and other
provisions of this Agreement;
8.1.14 COMPLIANCE WITH BULK SALES LAWS. (i) Provide notice to
the Pennsylvania Department of Revenue and the Pennsylvania Department
of Labor and Industry, at least ten days prior to Closing, of the sale
of the Business and the Purchased Assets contemplated hereunder, in
accordance with 72 P.S. Section 1403 and 43 P.S. Section 788.3, and
shall provide Purchaser with a copy of said notice; and (ii) file all
State Tax reports with the Pennsylvania Department of Revenue and the
Pennsylvania Department of Labor and Industry to and including the
Closing Date, pay all taxes due to the Commonwealth in accordance
therewith, and provide Purchaser with evidence of such payment on or
before the Closing Date; and
8.1.15 UPDATE SCHEDULE. Promptly disclose to Purchaser any
information contained in the representations and warranties of Seller
contained in Article VI or in the Schedules to this Agreement which is
no longer complete or correct (including furnishing updated financial
statements); provided that no such disclosure shall be deemed to
modify, amend or supplement Seller's representations and warranties.
8.2 PROHIBITED ACTIONS. Between the date of this Agreement and the
Closing Date, Seller shall not, except as otherwise agreed by Purchaser in
writing:
8.2.1 SALE OF PURCHASED ASSETS. Sell, transfer, assign, lease,
encumber or otherwise dispose of any of the Purchased Assets other than
in the ordinary course of business consistent with past practices;
8.2.2 BUSINESS CHANGES. Change in any material respect the
character of the Business;
8.2.3 INCURRENCE OF MATERIAL OBLIGATIONS. Incur any material
fixed or contingent obligation or enter into any material agreement,
commitment or other transaction or
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arrangement, commitment or other transaction or arrangement that is not
the ordinary course of business consistent with past practices and with
respect to which Purchaser will be bound subsequent to Closing;
8.2.4 INCURRENCE OF LIENS. Subject to lien, security interest
or any other Encumbrance, other than Permitted Encumbrances, any of the
Purchased Assets;
8.2.5 CHANGE IN EMPLOYEE COMPENSATION AND BENEFITS. Increase
the rate of compensation paid, or pay any bonus, to anyone connected
with the Business, or enter into any employment or consulting agreement
that is not terminable at will and without penalty, except in the
ordinary course of business consistent with past practices, or
establish or adopt any new Benefit Plan or other employee benefit
arrangement of any kind whatsoever covering or affecting Employees;
8.2.6 PUBLICITY; ADVERTISEMENT. Except as required by law,
publicize, advertise or announce to any third-party, except as required
pursuant to this Agreement to obtain the consent of such third-party,
the entering into of this Agreement, the terms of this Agreement or the
transactions contemplated hereby;
8.2.7 NO RELEASE. Except in the ordinary course of business
consistent with past practices, cancel, release or relinquish any
material debts of or claims against others held by Seller with respect
to the Business or waive any material rights relating to the Business;
and
8.2.8 NO TERMINATION OR MODIFICATION. Terminate or materially
modify any material contract or permit (including, without limitation,
those items listed on SCHEDULE 1.50, SCHEDULE 2.1.4, SCHEDULE 1.64 and
SCHEDULE 1.65) or other authorization or agreement affecting the
Purchased Assets or the Business or the operation thereof.
ARTICLE IX. COVENANTS OF PURCHASER PRIOR TO CLOSING DATE
9.1 REQUIRED ACTIONS. Between the date of this Agreement and the
Closing Date, Purchaser shall, except as otherwise agreed by Seller in writing:
9.1.1 ADVISE OF CHANGES. Advise Seller promptly in writing of
any fact that, if known at the Closing Date, would have been required
to be set forth or disclosed in or pursuant to this Agreement, or which
would result in the breach by Purchaser of any of its representations,
warranties, covenants or agreements hereunder;
9.1.2 COMPLIANCE WITH AGREEMENT. Not undertake any course of
action inconsistent with satisfaction of the conditions applicable to
it set forth in this Agreement, and Purchaser shall use its best
efforts to do all such acts and take all such measures as may be
reasonably necessary to comply with the representations, agreements,
conditions and other provisions of this Agreement;
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9.1.3 EXAMINATIONS. Promptly undertake all examinations,
inspections, surveys and audits, including, without limitation, title
searches and surveys of the Real Property, environmental assessments
and audits and engineering surveys, as Purchaser deems necessary in
connection with the acquisition of the Purchased Assets or the
Business; and
9.1.4 SELLER'S EMPLOYEES. Take all reasonable steps to ensure
that the transfer of employment of all of the Employees electing to
continue their employ with Purchaser as are able to be accomplished
prior to or on the Closing Date.
9.2 INVESTIGATION. Purchaser shall use reasonable efforts to conduct an
investigation of the Business of Seller in such a manner as to prevent
disruption of relations with the Employees, patients and suppliers of Seller,
which investigation shall include such due diligence as is customary for
transactions of the type contemplated herein.
9.3 APPROVALS, CONSENTS. Purchaser shall use its best efforts to obtain
in writing as promptly as possible any approvals and consents as required to be
obtained by Purchaser in order to effectuate the transactions contemplated
hereby and deliver to Purchaser copies of such approvals and consents.
Accordingly, Purchaser take all reasonable action to obtain the necessary
licenses to operate the Facility from the Department of Health, including:
(i) providing notice to each Accreditation Body and Third
Party Payor as required by any Legal Requirement of
the pending change of ownership of the Facility; and
(ii) providing such other notices as required by all Legal
Requirements including, if required, (i) notices to
the Facility's patients and (ii) notices to referral
and human service agencies. Prior to sending the
notices, Purchaser shall provide copies to Seller for
review and approval, which approval shall not be
unreasonably withheld.
9.4 PUBLICITY; ADVERTISEMENT. Except as required by law, Purchaser
shall not publicize, advertise or announce to any third-party, except as
required pursuant to this Agreement to obtain the consent of such third-party,
the entering into of this Agreement, the terms of this Agreement or the
transactions contemplated hereby; provided, however, the foregoing shall not be
applicable to disclosures made by Purchaser to Purchaser's lender in response to
such lender's reasonable requests.
ARTICLE X. CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER
The obligation of Purchaser to proceed with Closing under this
Agreement is subject to the fulfillment prior to the specified date or at the
time of Closing of the following conditions with respect to Seller, any one or
more of which may be waived in whole or in part by Purchaser:
10.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties of Seller contained in this Agreement and the Ancillary Agreement
to which Seller is a party shall have been true in all material respects on the
date hereof and shall be true in all material
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respects on and as of the Closing Date with the same force and effect as though
made on and as of the Closing Date.
10.2 PERFORMANCE OF AGREEMENT. Seller shall have performed in all
material respects all obligations and agreements and complied in all material
respects with all covenants and conditions contained in this Agreement and the
Ancillary Agreements to which Seller is a party to be performed or complied with
by it at or prior to the Closing Date.
10.3 SELLER'S CERTIFICATE. Purchaser shall have received a certificate
from Seller, dated as of the Closing Date, reasonably satisfactory in form and
substance to Purchaser and its counsel, certifying as to the matters specified
in Section 10.1 and Section 10.2 hereof. The matters set forth in such
certificate shall constitute representations and warranties of Seller hereunder.
10.4 SECRETARY'S CERTIFICATE. Purchaser shall have received a
certificate, dated as of the Closing Date, of the Secretary or any Assistant
Secretary of Seller with respect to:
(i) the resolutions of the board of directors of Seller
and, if necessary, the stockholders of Seller,
authorizing the execution and delivery of this
Agreement and the Ancillary Agreements to which
Seller is a party and the performance by Seller of
the transactions contemplated hereby and thereby;
(ii) the incumbency and specimen signature of each officer
or representative of Seller executing this Agreement,
the certificate referred to in Section 10.3 and the
Ancillary Agreements to which Seller is a party; and
(iii) the effect that the governing documents of Seller
delivered pursuant to Section 10.6 were in effect at
the date of adoption of such resolutions, the date of
execution of this Agreement and the Closing Date.
10.5 INJUNCTION. On the Closing Date, there shall be no injunction,
writ, preliminary restraining order or any order of any nature in effect issued
by a court of competent jurisdiction directing that the transactions provided
for herein, or any of them, not be consummated as herein provided and no suit,
action, investigation, inquiry or other legal or administrative proceeding by
any Governmental Authority or other Person shall have been instituted or
threatened which questions the validity or legality of the transactions
contemplated hereby or which if successfully asserted might otherwise have a
material adverse effect on the conduct of the Business or impose any additional
material financial obligation on, or require the surrender of any material right
by, Purchaser.
10.6 ACTIONS AND PROCEEDINGS. All corporate actions, proceedings,
instruments and documents required to carry out the transactions contemplated by
this Agreement or incidental hereto and all other related legal matters shall be
reasonably satisfactory to counsel for Purchaser, and such counsel shall have
been furnished with such certified copies of such corporate actions
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and proceedings and such other instruments and documents as it shall have
reasonably requested, including, without limitation:
(i) certificates of the appropriate public officials to
the effect that Seller is a validly existing
corporation in good standing in its state of
incorporation as of a date not more than 10 days
prior to the Closing Date;
(ii) incumbency and specimen signature certificates dated
the Closing Date, signed by the officers of Seller
and certified by its Secretary; and
(iii) true and correct copies of (A) the charter documents
of Seller as of a date not more than 10 days prior to
the Closing Date, certified by the Secretary of State
of its state of incorporation and (B) the bylaws of
Seller as of the Closing Date, certified by the
Secretary of Seller.
10.7 CONSENTS. Any third-party consents, approvals, authorizations or
Permits (including, without limitation, those required by any Governmental
Authorities) necessary for the conveyance of the Purchased Assets or valid
consummation of the transactions contemplated hereby shall have been obtained.
10.8 ARRANGEMENTS WITH EMPLOYEES. Substantially all of Seller's
Employees shall have accepted employment with Purchaser effective as of the
Closing Date and Purchaser shall have entered into arrangements with key
Employees of Seller satisfactory to Purchaser in its sole discretion.
10.9 BUSINESS INVESTIGATION. Purchaser shall have completed its
investigation as contemplated in Section 9.2, the results of which shall be
satisfactory to Purchaser in its sole discretion.
10.10 PHYSICAL INSPECTION. At its own cost and expense, Purchaser shall
have inspected and approved the physical condition of the Real Property
including the improvements and the HVAC, electrical, plumbing and other systems,
and shall receive the written report in form and substance satisfactory to
Purchaser from a qualified engineering firm approved by Purchaser or any
engineer employed by Purchaser to the effect that the improvements on the Real
Property have been constructed in compliance with, and currently are in
compliance with, all governmental requirements, including without limitation the
Americans With Disabilities Act, and with all restrictions of record applicable
thereto which materially affect the Purchaser's intended use of the Real
Property.
10.11 ENVIRONMENTAL REPORT. At its own cost and expense, Purchaser
shall have obtained a written report from a qualified geotechnical or
engineering firm, in a form and substance, satisfactory to Purchaser, concerning
the presence, handling, treatment and disposal of Regulated Substances on, in or
under the Real Property and disclosing (i) the results of a review of prior uses
of the Real Property disclosed by local public records, including the chain of
title; (ii) contacts with local officials to determine whether any records exist
with respect to the
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disposal of Regulated Substances on the Real Property; and (iii) if recommended
to or required by Purchaser, soil samples and groundwater samples consistent
with good engineering practice.
10.12 TITLE INSURANCE. Purchaser shall have obtained for all Real
Property final marked commitments to issue to Purchaser ALTA (1990-Form B with
appropriate state endorsements) owner's or leasehold policies of title insurance
in coverage amounts equal to the fair market values of such Real Property,
insuring good and marketable title to such Real Property with mechanic's liens
coverage and such endorsements as Purchaser may reasonably request and with
exceptions only for ALTA standard printed exceptions (other than mechanic's and
materialmen's liens and rights of possession) and Permitted Encumbrances.
10.13 ESTOPPEL CERTIFICATES. Purchaser shall have received estoppel
certificates from the Seller and any other lessor of the Real Property Leased,
in form and substance satisfactory to Purchaser.
10.14 CLOSING DOCUMENTS. Purchaser shall have received the other
documents referred to in Section 5.2 which shall be in form and substance
satisfactory to Purchaser in its reasonable discretion.
10.15 OTHER DELIVERIES. At its own cost and expense, Purchaser shall
have received with respect to the Real Property:
10.15.1 SURVEYS. Surveys of such property which conform to the
standards set forth in the ALTA/American Congress on Surveying and
Mapping Minimum Standard Detail Requirements for Land Title Surveys and
which disclose no state of facts inconsistent with the representations
and warranties of Seller set forth in Section 6.9 hereof and are
otherwise acceptable to Purchaser;
10.15.2 AFFIDAVITS. ALTA extended coverage
statements/affidavits in form and substance satisfactory to Purchaser's
title insurer regarding title, mechanic's liens and such other
customary matters as may be reasonably requested by Purchaser or
Purchaser's title insurer; and
10.15.3 FIRPTA CERTIFICATES. A certificate, duly executed and
acknowledged by Seller under penalties of perjury, in the form
prescribed by Treasury Regulation Section 1.1445-2(b)(2)(iii), stating
Seller's name, address and Federal tax identification number, and that
Seller is not a "foreign person" within the meaning of Section 1445 of
the Code.
10.16 FINANCING. Purchaser shall have received, on terms that shall be
satisfactory to Purchaser in its sole discretion, a written binding commitment
from a real estate investment trust or other financing source in an amount
sufficient to enable Purchaser to pay the Purchase Price in full (the "Financing
Commitment").
10.17 AL ASSET PURCHASE AGREEMENT. All conditions to the closing set
forth in Article X of the Gethsemane AL Asset Purchase Agreement shall have been
satisfied in full.
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10.18 OPINION OF COUNSEL. Purchaser shall have received the favorable
opinion of Xxxxxx Xxxxx & Xxxx, counsel for Seller, addressed to Purchaser and
Purchaser's lender, reasonably satisfactory to Purchaser and its counsel as to
the matters set forth in Sections 6.1, 6.2 and 6.3 hereof.
10.19 AUTHORIZATION. On or before October 31, 1997, Purchaser shall
have obtained final approval of the transactions contemplated herein by its
board of directors and shareholders (if necessary).
ARTICLE XI. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER
The obligation of Seller to proceed with the Closing under this
Agreement is subject to the fulfillment prior to the specified date or at the
time of Closing of the following conditions with respect to Purchaser, any one
or more of which may be waived in whole or in part by Seller:
11.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties of Purchaser contained in this Agreement shall have been true in
all material respects on the date hereof and shall be true in all material
respects on and as of the Closing Date with the same force and effect as though
made on and as of the Closing Date.
11.2 PERFORMANCE OF AGREEMENT. Purchaser shall have performed in all
material respects all obligations and agreements and complied in all material
respects with all covenants and conditions contained in this Agreement to be
performed or complied with by it at or prior to the Closing Date.
11.3 PURCHASER'S CERTIFICATE. Seller shall have received a certificate
from Purchaser, dated as of the Closing Date, reasonably satisfactory in form
and substance to Seller and their counsel, certifying as to the fulfillment of
all matters specified in Section 11.1 and Section 11.2 hereof. The matters set
forth in such certificate shall constitute representations and warranties of
Purchaser hereunder.
11.4 SECRETARY'S CERTIFICATE. Seller shall have received a certificate,
dated as of the Closing Date, of the Secretary or any Assistant Secretary of
Purchaser with respect to:
(i) the resolutions of the board of directors of
Purchaser and, if necessary, the stockholders of
Purchaser, authorizing the execution and delivery of
this Agreement and the Ancillary Agreements to which
Purchaser is a party and the performance by Purchaser
of the transactions contemplated hereby and thereby;
(ii) the incumbency and specimen signature of each officer
or representative of Purchaser executing this
Agreement, the certificate referred to in Section
11.3 and the Ancillary Agreements to which Purchaser
is a party; and
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(iii) the effect that the governing documents of Purchaser
delivered pursuant to Section 11.6 were in effect at
the date of adoption of such resolutions, the date of
execution of this Agreement and the Closing Date.
11.5 INJUNCTION. On the Closing Date, there shall be no injunction,
writ, preliminary restraining order or any order of any nature in effect issued
by a court of competent jurisdiction directing that the transactions provided
for herein, or any of them, not be consummated as herein provided and no suit,
action, investigation, inquiry or other legal or administrative proceeding by
any Governmental Authority or other Person shall have been instituted,
threatened or anticipated which questions the validity or legality of the
transactions contemplated hereby.
11.6 ACTIONS AND PROCEEDINGS. All corporate actions, proceedings,
instruments and documents required to carry out the transactions contemplated by
this Agreement or incidental hereto and all other related legal matters shall be
reasonably satisfactory to counsel for Seller, and such counsel shall have been
furnished with such certified copies of such corporate actions and proceedings
and such other instruments and documents as it shall have reasonably requested,
including, without limitation:
(i) certificates of the appropriate public officials to
the effect that Purchaser is a validly existing
corporation in good standing in its state of
incorporation as of a date not more than 10 days
prior to the Closing Date;
(ii) incumbency and specimen signature certificates dated
the Closing Date, signed by the officers of Purchaser
and certified by its Secretary; and
(iii) true and correct copies of (A) the charter documents
of Purchaser as of a date not more than 10 days prior
to the Closing Date, certified by the Secretary of
State of its state of incorporation and (B) the
bylaws of Purchaser as of the Closing Date, certified
by the Secretary of Purchaser.
11.7 FINANCING COMMITMENT. Purchaser shall have received the Financing
Commitment or shall have otherwise demonstrated, to the reasonable satisfaction
of Seller, that Purchaser has the ability to pay the Purchase Price in full as
evidenced at Closing by (i) Purchaser's balance sheet, (ii) other firm lending
commitments or (iii) a combination of items (i) and (ii).
11.8 AL ASSET PURCHASE AGREEMENT. All conditions to the closing set
forth in Article XI of the Gethsemane AL Asset Purchase Agreement shall have
been satisfied in full.
ARTICLE XII. OBLIGATIONS AFTER THE CLOSING DATE
12.1 COVENANT NOT TO INTERFERE. Seller covenants and agrees that for a
period of three years after the Closing Date, Seller will not solicit for
employment by Seller or any Affiliates any Person who is an Employee of the
Business as of the Closing Date.
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12.2 NONCOMPETITION. For a period of three years following the Closing
Date, Seller will not, directly or indirectly, unless acting in accordance with
Purchaser's written consent, own, manage, operate, finance or participate in the
ownership, management, operation or financing of or permit its name to be used
by or in connection with any business or enterprise engaged in the Business
acquired by Purchaser hereunder and located within a 25-mile radius of the
Facility. Seller acknowledges that the provisions of this Section are reasonable
and necessary to protect the interests of Purchaser, that any violation of this
Section will result in an irreparable injury to Purchaser and that damages at
law would not be reasonable or adequate compensation to Purchaser for violation
of this Section and that, in addition to any other available remedies, Purchaser
shall be entitled to have the provisions of this Section specifically enforced
by preliminary and permanent injunctive relief without the necessity of proving
actual damages or posting a bond or other security to an equitable accounting of
all earnings, profits and other benefits arising out of any violation of this
Section. In the event that the provision of this Section shall ever be deemed to
exceed the time, geographic scope or other limitations permitted by applicable
law, then the provisions shall be deemed reformed to the maximum extent
permitted by applicable law.
12.3 TRANSITION OF EMPLOYEES. From and after the Closing Date,
Purchaser and Seller shall cooperate to ensure an orderly transition of the
Employees who accept employment with Purchaser.
12.4 CERTAIN TRANSITIONAL MATTERS.
12.4.1 TRANSFER OF ASSETS. Seller agrees that Purchaser, from
and after the Closing Date, shall have the right and authority to
collect for Purchaser's own account all items which shall be
transferred to Purchaser as provided herein.
12.4.2 ENDORSEMENT OF CHECKS. From and after the Closing Date,
Purchaser shall have the right and authority to retain and endorse
without recourse the name of Seller on any check or any other evidence
of indebtedness relating to a period on or after Closing, received by
Purchaser on account of any of the Purchased Assets and the Business
transferred to Purchaser hereunder.
12.4.3 SELLER'S REMITTANCE OF FUNDS. After the Closing Date,
Seller shall promptly transfer and deliver to Purchaser any cash or
other property, if any, that Seller may receive related to the
Purchased Assets other than the Excluded Assets and the Business.
12.4.4 PURCHASER'S REMITTANCE OF FUNDS. After the Closing
Date, Purchaser shall promptly transfer and deliver to the appropriate
Seller any cash or other property, if any, that Purchaser may receive
related to the Excluded Assets.
12.4.5 ASSUMED LIABILITIES CONTROLLED BY PURCHASER. From and
after the Closing, Purchaser shall have complete control over the
payment, settlement or other disposition of, or any dispute involving
any Assumed Liability, and Purchaser shall have the right to conduct
and control all negotiations and proceedings with respect thereto.
Seller shall
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notify Purchaser promptly of any claim made with respect to any Assumed
Liability and shall not, except with the prior written consent of
Purchaser, voluntarily make any payment of, or settle or offer to
settle, or consent to any compromise with respect to, any such Assumed
Liability. Seller shall cooperate with Purchaser in connection with any
negotiations or proceedings involving any Assumed Liability.
12.5 AUDITS. To the extent reasonably requested by Purchaser, following
the Closing Date, at Purchaser's cost and expense, Seller shall cooperate and
request Seller's accountants to cooperate, with Purchaser and its auditors in
the preparation of audited financial statements of the Facility for the years
ended June 30, 1997, 1996 and 1995 prepared in accordance with GAAP or, to the
extent required, in connection with any registration statement or other form
filed by Purchaser with the Securities and Exchange Commission under the
Securities Act of 1933 for a public offering and sale of securities of
Purchaser.
12.6 ACCESS TO RECORDS. To the extent required by any applicable Legal
Requirement, Seller agrees to make available to the Comptroller General of the
United States, the Department of Health and Human Services and their duly
authorized representatives, the books, documents and records of Seller and such
other information as may be required by the Comptroller General or Secretary of
Health and Human Services to verify the nature and extent of the costs of
services provided by Seller under the Contracts in connection with the Business.
If Seller carries out the duties of any Contract through a subcontract worth
$10,000 or more over a twelve (12) month period with a related organization, the
subcontract will also contain an access clause to permit access by the
Secretary, Comptroller General and their representatives to the related
organization's books and records.
12.7 FURTHER ASSURANCES OF SELLER. From and after the Closing Date,
Seller shall, at the request of Purchaser, execute, acknowledge and deliver to
Purchaser, without further consideration, all such further assignments,
conveyances, endorsements, deeds, special powers of attorney, consents and other
documents, and take such other action, as Purchaser may reasonably request (i)
to transfer to and vest in Purchaser, and protect its rights, title and interest
in, all the Purchased Assets and (ii) otherwise to consummate the transactions
contemplated by this Agreement. In addition, from and after the Closing Date,
Seller shall afford Purchaser and its attorneys, accountants and other
representatives access, during normal business hours, to any Books and Records
relating to the Business that Seller may retain as may reasonably be required in
connection with the preparation of financial information or tax returns of
Purchaser.
12.8 FURTHER ASSURANCES OF PURCHASER. From and after the Closing Date,
Purchaser shall afford to Seller and its attorneys, accountants and other
representatives access, during normal business hours, to such Books and Records
relating to the Business as may reasonably be required in connection with the
preparation of financial information or Tax Returns for periods concluding on or
prior to the Closing Date. Purchaser shall cooperate in all reasonable respects
with Seller with respect to its former interest in the Business and in
connection with financial account closing and reporting and claims and
litigation asserted by or against third parties, including, but not limited to,
making Purchaser's employees available at reasonable times to assist with, or
provide information in connection with financial account closing and reporting
and
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claims and litigation, provided that Seller reimburses Purchaser for its
reasonable out-of-pocket expenses (including costs of employees so assisting) in
connection therewith.
ARTICLE XIII. TERMINATION
13.1 TERMINATION OF AGREEMENT. This Agreement may be terminated:
(i) by the mutual consent of Seller and Purchaser;
(ii) by Purchaser upon notice to Seller if any of the
conditions set forth in Article X hereof have not
been satisfied or become impossible to satisfy by the
specified date or the Closing Date, as the case may
be (other than by reason of the material failure of
Purchaser to fulfill its obligations under this
Agreement);
(iii) by Seller upon notice to Purchaser if any of the
conditions set forth in Article XI hereof have not
been satisfied or become impossible to satisfy by the
Closing Date (other than by reason of the material
failure of Seller to fulfill its obligations under
this Agreement);
(iv) by Seller if Purchaser materially breaches or fails
to fulfill its obligations under this Agreement,
which failure continues and remains uncured for 30
consecutive calendar days after Seller gives written
notice of such failure to Purchaser;
(v) by Purchaser if Seller materially breaches or fails
to fulfill its obligations under this Agreement,
which failure continues and remains uncured for 30
consecutive calendar days after Purchaser gives
written notice of such failure to Seller; and
(vi) by Purchaser or Seller if Closing has not taken place
on or before January 2, 1998 and the Closing Date has
not been extended upon mutual agreement of the
Parties; provided, no Party then in material breach
of any of its obligations hereunder shall have the
right to terminate.
13.2 RELEASE OF ESCROW DEPOSIT. If this Agreement is terminated, the
Escrow Deposit shall be disbursed as follows and in accordance with the terms
and conditions of the Escrow Agreement:
13.3.1 TO BUYER. If this Agreement is terminated pursuant to
Section 13.1(i), Section 13.1(ii) or Section 13.1(v), the Parties agree
to instruct Escrow Agent to release the Escrow Deposit to Purchaser;
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13.3.2 TO SELLER. If this Agreement is terminated pursuant to
Section 13.1(iii) or Section 13.1(iv), the Parties agree to instruct
Escrow Agent to release the Escrow Deposit to Seller; and
13.3.3 TO BUYER AND SELLER. If this Agreement is terminated
pursuant to Section 13.1(vi), the Parties agree to instruct Escrow
Agent to release the one-half of the Escrow Deposit to Purchaser and
one-half of the Escrow Deposit to Seller.
13.3 RETURN OF DOCUMENTS. If this Agreement is terminated for any
reason pursuant to this Article XIII, each Party shall return to the other Party
all documents and copies thereof which shall have been furnished to it by such
other Party or, with the agreement of the other Party, shall destroy all such
documents and copies thereof.
13.4 REMEDIES. If this Agreement is terminated by Purchaser or Seller
as permitted under Section 13.1 and not as a result of a breach of a
representation or warranty or the failure of any Party to perform its
obligations hereunder, except for the return of the Escrow Deposit pursuant to
Section 13.3, such termination shall be without liability of any Party. If a
Party terminates this Agreement as a result of a breach of a representation or
warranty by the other Party or the failure of the other Party to perform its
obligations hereunder, the nonbreaching Party, in addition to any other legal
remedies that may be available, shall be entitled to a return of the Escrow
Deposit pursuant to Section 13.3 and reimbursement from the breaching Party for
all
ARTICLE XIV. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION
14.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties of the Parties shall survive for two (2) years after the Closing
Date; provided that there shall be no termination of any such representation or
warranty as to which a claim has been asserted prior to the termination of such
survival period. Except as otherwise expressly provided in this Agreement, all
covenants, agreements, undertakings and indemnities set forth in this Agreement
shall survive indefinitely. Any Party's right to the indemnification or other
remedies based upon the representations and warranties, covenants, agreements
and undertakings of any other Party will not be affected by any investigation,
knowledge or waiver of any condition by such Party. Any investigation by such
Party shall be for its own protection only and shall not affect or impair any
right or remedy hereunder.
14.2 INDEMNIFICATION BY SELLER. Seller shall indemnify, defend, save
and hold Purchaser and its officers, directors, employees, agents and Affiliates
(collectively, "Purchaser Indemnitees") harmless from and against all demands,
claims, allegations, assertions, actions or causes of action, assessments,
losses, damages, deficiencies, liabilities, costs and expenses (including
reasonable legal fees, interest, penalties, and all reasonable amounts paid in
investigation, defense or settlement of any of the foregoing and whether or not
any such demands, claims, allegations, etc., of third parties are meritorious;
collectively, "Purchaser Damages") asserted against, imposed upon, resulting to,
required to be paid by, or incurred by any Purchaser Indemnitees, directly or
indirectly, in connection with, arising out of, which could
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result in, or which would not have occurred but for, a breach of any
representation or warranty made by Seller in this Agreement, in any certificate
or document furnished pursuant hereto by Seller or any Ancillary Agreement to
which Seller is or is to become a party, a breach or nonfulfillment of any
covenant or agreement made by Seller in or pursuant to this Agreement and in any
Ancillary Agreement to which Seller is or is to become a party, and any Retained
Liability.
14.3 INDEMNIFICATION BY PURCHASER. Purchaser shall indemnify, defend,
save and hold Seller and its officers, directors, Employees, Affiliates and
agents, as the case may be (collectively, "Seller Indemnitees") harmless from
and against any and all demands, claims, actions or causes of action,
assessments, losses, damages, deficiencies, liabilities, costs and expenses
(including reasonable legal fees, interest, penalties, and all reasonable
amounts paid in investigation, defense or settlement of any of the foregoing and
whether or not any such demands, claims, allegations, etc., of third parties are
meritorious; collectively, "Seller Damages") asserted against, imposed upon,
resulting to, required to be paid by, or incurred by any Seller Indemnitees,
directly or indirectly, in connection with, arising out of, which could result
in, or which would not have occurred but for, a breach of any representation or
warranty made by Purchaser in this Agreement or in any certificate or document
furnished pursuant hereto by Purchaser or any Ancillary Agreement to which
Purchaser is a party, a breach or nonfulfillment of any covenant or agreement
made by Purchaser in or pursuant to this Agreement and in any Ancillary
Agreement to which Purchaser is a party, and, with respect to Seller, any
Assumed Liability.
14.4 NOTICE OF CLAIMS. If any Purchaser Indemnitee or Seller Indemnitee
(an "Indemnified Party") believes that it has suffered or incurred or will
suffer or incur any Purchaser Damages or Seller Damages, as the case may be
("Damages") for which it is entitled to indemnification under this Article XIV,
such Indemnified Party shall so notify the party or parties from whom
indemnification is being claimed (the "Indemnifying Party") with reasonable
promptness and reasonable particularity in light of the circumstances then
existing. If any action at law or suit in equity is instituted by or against a
third party with respect to which any Indemnified Party intends to claim any
Damages, such Indemnified Party shall promptly notify the Indemnifying Party of
such action or suit. The failure of an Indemnified Party to give any notice
required by this Section shall not affect any of such party's rights under this
Article XIV or otherwise except and to the extent that such failure is actually
prejudicial to the rights or obligations of the Indemnified Party.
14.5 THIRD PARTY CLAIMS. The Indemnified Party shall have the right to
conduct and control, through counsel of its choosing, the defense of any third
party claim, action or suit, and the Indemnified Party may compromise or settle
the same, provided that the Indemnified Party shall give the Indemnifying Party
advance notice of any proposed compromise or settlement. The Indemnified Party
shall permit the Indemnifying Party to participate in the defense of any such
action or suit through counsel chosen by the Indemnifying Party, provided that
the fees and expenses of such counsel shall be borne by the Indemnifying Party.
If the Indemnified Party permits the Indemnifying Party to undertake, conduct
and control the conduct and settlement of such action or suit, the Indemnifying
Party shall not thereby permit to exist any Encumbrance upon any asset of the
Indemnified Party; the Indemnifying Party shall not consent to any settlement
that does not include as an unconditional term thereof the giving of a complete
release
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from liability with respect to such action or suit to the Indemnified Party; the
Indemnifying Party shall permit the Indemnified Party to participate in such
conduct or settlement through counsel chosen by the Indemnified Party (at its
own cost and expense); and the Indemnifying Party shall agree promptly to
reimburse the Indemnified Party for the full amount of any Damages including
fees and expenses of counsel for the Indemnified Party incurred after giving the
foregoing notice to the Indemnifying Party and prior to the assumption of the
conduct and control of such action or suit by the Indemnifying Party.
14.6 OTHER REMEDIES. The indemnification rights of any Indemnified
Party under this Article XIV are independent of and in addition to such rights
and remedies as such Indemnified Party may have at law, in equity or otherwise
for any misrepresentation, breach of warranty or failure to fulfill any covenant
or agreement under or in connection with this Agreement on the part of any
Party, none of which rights or remedies shall be affected or diminished hereby.
ARTICLE XV. GENERAL
15.1 EXPENSES. Except as otherwise provided in this Agreement, and
whether or not the transactions herein contemplated shall be consummated,
Purchaser and Seller shall pay their own fees, expenses and disbursements,
including the fees and expenses of their respective counsel, accountants and
other experts in connection with the subject matter of this Agreement and all
other costs and expenses incurred in performing and complying with all
conditions to be performed under this Agreement.
15.2 PUBLICITY. All notices to third-parties and all other publicity
concerning the transactions contemplated by this Agreement shall be jointly
planned and coordinated by and among Purchaser and Seller. Except as may be
required by law, no Party shall act unilaterally in this regard without prior
written approval of every other Party, such approval not be unreasonably
withheld.
15.3 WAIVERS. The waiver by any Party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach.
15.4 BINDING EFFECT; BENEFITS. This Agreement shall inure to the
benefit of the Parties hereto, and shall be binding upon the Parties hereto and
their respective successors, assigns, heirs, executors, administrators and legal
representatives. Nothing in this Agreement, express or implied, is intended to
confer on any Person other than the Parties hereto, or their respective
successors, assigns, heirs, executors, administrators and legal representatives
any rights, remedies, obligations or liabilities under or by reason of this
Agreement.
15.5 NOTICES. All notices, requests, demands, elections and other
communications which any Party to this Agreement may be required to give
hereunder shall be in writing and shall be deemed to have been duly given if
delivered personally, by a reputable courier service which requires a signature
upon delivery, by mailing the same by registered or certified first class mail,
postage prepaid, return receipt requested, or by telecopying with receipt
confirmation (followed by a first class mailing of the same) to the Party to
whom the same is so given or made. Such notice, request, demand, waiver,
election or other communication will be deemed to have
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been given as of the date so delivered or electronically transmitted or two days
after mailing thereof.
15.5.1 NOTICE TO SELLER.
If to Seller, to:
Gethsemane Retirement Community and
Rehabilitation Center, Inc.
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx, President
With a required copy to:
Xxxxxx Xxxxx & Xxxx, P.C.
X.X. Xxx 000
Xxxxxxxxxx, XX 00000-0000
Fax: (000) 000-0000
Attn: Xxxx Xxxx, Esq.
15.5.2 NOTICE TO PURCHASER.
If to Purchaser, to:
Balanced Care Corporation
0000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxxxx, XX 00000
Fax: (000) 000-0000
Attn: Xxxxx Xxxxxx, Esq.
With a required copy to:
Xxxxxxxxxxx & Xxxxxxxx LLP
0000 Xxxxxx Xxxxxxxx
Xxxxxxxxxx, XX 00000
Fax: (000) 000-0000
Attn: Xxxx X. Xxxxxx, Esq.
Or to such other addresses as such Party shall have specified by notice to every
other Party hereto.
15.6 ENTIRE AGREEMENT. This Agreement (including the Exhibits and
Schedules hereto) and the Ancillary Agreements and documents delivered at
Closing pursuant hereto and thereto
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constitute the entire agreement and understanding between the Parties hereto as
to the matters set forth herein and therein and supersede and revoke all prior
agreements and understandings, oral and written, between the Parties hereto or
thereto or otherwise with respect to the subject matter hereof or thereof. No
change, amendment, termination or attempted waiver of any of the provisions
hereof or thereof shall be binding upon any Party unless set forth in an
instrument in writing signed by the Party to be bound or their respective
successors in interest.
15.7 COUNTERPARTS. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
15.8 HEADINGS. The article, section and other headings contained in
this Agreement are for reference purposes only and shall not be deemed to be a
part of this Agreement or to affect the meaning or interpretation of this
Agreement.
15.9 CONSTRUCTION. Within this Agreement, the singular shall include
the plural and the plural shall include the singular, and any gender shall
include all other genders, all as the meaning and the context of this Agreement
shall require.
15.10 GOVERNING LAW AND CHOICE OF FORUM. The validity and
interpretation of this Agreement shall be construed in accordance with, and
governed by the internal laws of the Commonwealth of Pennsylvania. All claims,
disputes or causes of action relating to or arising out of this Agreement shall
be brought, heard and resolved solely and exclusively by and in the federal or
state courts situated in Dauphin County and Cumberland, County, Pennsylvania,
respectively. The Parties hereto agree to submit to the jurisdiction of such
courts and agree that such jurisdiction shall be proper for all purposes of this
Agreement.
15.11 COOPERATION. The Parties hereto shall cooperate fully at their
own expense, except as otherwise provided in this Agreement, with each other and
their respective counsel and accountants in connection with all steps to be
taken as part of their obligations under this Agreement.
15.12 SEVERABILITY. If any term, covenant, condition or provision of
this Agreement or the application thereof to any circumstance shall be invalid
or unenforceable to any extent, the remaining terms, covenants, conditions and
provisions of this Agreement shall not be affected thereby and each remaining
term, covenant, condition and provision of this Agreement shall be valid and
shall be enforceable to the fullest extent permitted by law. If any provision of
this Agreement is so broad as to be unenforceable, such provision shall be
interpreted to be only as broad as is enforceable.
15.13 ATTORNEYS' FEES. If a dispute arises among the Parties as a
result of which an action is commenced to interpret or enforce any of the terms
of this Agreement, the non-prevailing Parties shall pay the prevailing Party's
reasonable out-of-pocket attorneys' fees, costs and expenses incurred in
connection with the prosecution or defense of such action.
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15.14 SUCCESSORS AND ASSIGNS. The covenants, agreements, and conditions
contained herein or granted hereby shall be binding upon and shall inure to the
benefit of Purchaser and Seller, and each of their respective permitted
successors, assigns, heirs, executors, administrators and legal representatives.
Seller shall not assign, or otherwise transfer any interest in this Agreement to
any other Person without the prior written consent of Purchaser, which consent
shall not unreasonably be withheld. Purchaser may assign and transfer its
interest in this Agreement without Seller's consent to any of Purchaser's
Affiliates or to any lender providing financing for the transactions
contemplated hereby. In addition, Purchaser anticipates financing the
transactions contemplated hereby with a real estate investment trust. Purchaser
shall have the right to assign this Agreement, in whole or in part, in such
manner as Purchaser may desire in order to facilitate such financing. Purchaser
will promptly provide Seller with a copy of any such assignment, and Seller
agrees to execute and deliver any consents reasonably required by Purchaser's
lender in connection therewith, provided such assignment does not expand either
of Seller's obligations and liabilities hereunder. Notwithstanding any permitted
assignment of this Agreement by Purchaser, Purchaser shall remain liable to
Seller for all obligations and liabilities to be performed by or on behalf of
Purchaser hereunder with respect to Seller.
[NEXT FOLLOWING PAGE IS THE SIGNATURE PAGE]
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IN WITNESS WHEREOF, intending to be legally bound hereby, the Parties
have caused this Agreement to be signed in their respective names by an officer
thereof duly authorized as of the date first above written.
PURCHASER:
BALANCED CARE CORPORATION
By: /s/ XXXXX X. XXXXX
------------------------------------
Xxxxx X. Xxxxx
Vice President
SELLER:
GETHSEMANE RETIREMENT COMMUNITY AND
REHABILITATION CENTER, INC.
By: /s/ XXXXX X. XXXXXX
------------------------------------
Xxxxx X. Xxxxxx
President
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