ASSET PURCHASE AGREEMENT
Dated as of July 28, 1998
between
Capital Senior Living Properties, Inc.,
a Texas corporation
and
Xxxxxx Heights Enterprises,
a Texas general partnership
TABLE OF CONTENTS
Page
Article I. DEFINITIONS....................................................................................1
Section 1.1. Definitions................................................................................1
Section 1.2. Interpretation.............................................................................4
Article II. SALE AND PURCHASE OF ACQUIRED ASSETS...........................................................5
Section 2.1. Purchase And Sale..........................................................................5
Section 2.2. Acquired Assets and Excluded Assets........................................................5
Section 2.3. Assumption of Certain Liabilities and Obligations..........................................7
Article III. PURCHASE PRICE.................................................................................9
Section 3.1. Purchase Price.............................................................................9
Section 3.2. Allocation of Purchase Price...............................................................9
Article IV. THE CLOSING....................................................................................9
Section 4.1. Closing Date...............................................................................9
Section 4.2. Transactions To Be Effected At The Closing................................................10
Article V. REPRESENTATIONS AND WARRANTIES OF SELLER......................................................10
Section 5.1. Seller's Organization; Good Standing......................................................10
Section 5.2. Authority; Execution and Delivery.........................................................10
Section 5.3. Consents; No Violation, Etc...............................................................11
Section 5.4. Financial Statements; Undisclosed Liabilities.............................................11
Section 5.5. Title to Acquired Assets..................................................................11
Section 5.6. Real Property.............................................................................11
Section 5.7. Accounts Receivable.......................................................................11
Section 5.8. Absence of Certain Changes or Events......................................................11
Section 5.9. Employment Matters........................................................................12
Section 5.10. Employee Benefit Plans................................................................12
Section 5.11. Litigation............................................................................12
Section 5.12. Compliance with Laws..................................................................12
Section 5.13. Sufficiency of Acquired Assets........................................................12
Section 5.14. Contracts.............................................................................13
Section 5.15. Environmental Matters.................................................................13
Section 5.16. Interests in Seller...................................................................13
Section 5.17. No Brokers............................................................................13
Section 5.18. Exclusive Representations and Warranties..............................................14
Article VI. REPRESENTATIONS AND WARRANTIES OF PURCHASER...................................................14
Section 6.1. Purchaser's Organization; Good Standing...................................................14
Section 6.2. Authority; Execution and Delivery.........................................................14
Section 6.3. Consents; No Violations, Etc..............................................................14
Section 6.4. Litigation................................................................................14
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Section 6.5. No Brokers................................................................................14
Section 6.6. ERISA.....................................................................................15
Section 6.7. Availability of Funds.....................................................................15
Article VII. CERTAIN COVENANTS AND AGREEMENTS..............................................................15
Section 7.1. Covenants of Seller Relating to Conduct of Business.......................................15
Section 7.2. Purchaser's Access to Information.........................................................16
Section 7.3. Purchaser's Preservation of Records.......................................................16
Section 7.4. Legal Conditions to Closing...............................................................16
Section 7.5. Employee Matters..........................................................................17
Section 7.6. Collection of Receivables.................................................................17
Section 7.7. Expenses..................................................................................17
Section 7.8. Financial Information.....................................................................18
Section 7.9. Bulk Transfer Laws........................................................................18
Section 7.10. Actions of Purchaser..................................................................18
Section 7.11. No Additional Representations.........................................................18
Section 7.12. Maintenance; Repair; Risk of Loss.....................................................19
Section 7.13. NO REPRESENTATIONS BY SELLER..........................................................19
Section 7.14. RELEASE...............................................................................20
Section 7.15. Disclosure Supplement.................................................................20
Article VIII. CONDITIONS PRECEDENT..........................................................................21
Section 8.1. Conditions to Each Party's Obligations....................................................21
Section 8.2. Conditions to Obligations of Purchaser....................................................21
Section 8.3. Conditions to the Obligations of Seller...................................................22
Article IX. TERMINATION, AMENDMENT AND WAIVER.............................................................23
Section 9.1. Termination...............................................................................23
Section 9.2. Amendments and Waivers....................................................................25
Article X. INDEMNIFICATION...............................................................................25
Section 10.1. Indemnification by Seller.............................................................25
Section 10.2. Indemnification by Purchaser..........................................................26
Section 10.3. Losses Net of Insurance, etc..........................................................27
Section 10.4. Termination of Indemnification........................................................27
Section 10.5. Procedure.............................................................................27
Article XI. GENERAL PROVISIONS............................................................................28
Section 11.1. Notices...............................................................................28
Section 11.2. Headings..............................................................................30
Section 11.3. Survival of Representations and Warranties............................................30
Section 11.4. Severability..........................................................................30
Section 11.5. Counterparts..........................................................................30
Section 11.6. Entire Agreement; No Third Party Beneficiaries........................................30
Section 11.7. Governing Law.........................................................................30
Section 11.8. Consent to Jurisdiction...............................................................30
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Section 11.9. Publicity.............................................................................31
Section 11.10. Assignment..............................................................................31
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT, dated as of July 28, 1998 (this
"Agreement"), is by and between Capital Senior Living Properties, Inc., a Texas
corporation (or its permitted assigns as provided in Section 11.10 hereof), as
purchaser ("Purchaser"), and Xxxxxx Heights Enterprises, a Texas general
partnership, as seller ("Seller").
WHEREAS, Seller is engaged in the Business; and
WHEREAS, Seller desires to sell to Purchaser, and Purchaser
desires to purchase from Seller, substantially all of the assets used in
connection with the Business, all upon the terms and subject to the conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants
herein contained and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto hereby agree as
follows:
Article I. DEFINITIONS
Section 1.1. Definitions. As used in this Agreement,
the following terms shall have the meanings set forth below:
"Acquired Assets" shall have the meaning set forth in Section 2.2(a).
"Acquired Employees" shall have the meaning set forth in Section 7.5(a).
"Affiliate" shall mean, with respect to any person, any other person that
directly or indirectly Controls, is Controlled by or is under common Control
with such first person. A person shall be deemed to "Control" another person if
such first person has the power to direct or cause the direction of such other
person, whether through ownership of securities, by contract or otherwise.
"Assumed Liabilities" shall have the meaning set forth in Section 2.3(a).
"Benefit Plan" shall have the meaning set forth in Section 5.10.
"Business" shall mean the operation of the 186-unit full service retirement
community (including 128 independent living units and 58 assisted living units)
located at 00000 Xxxx Xxxx Xxxxx, Xx. Xxxxx, Xxxxxxxx.
"Business Account Payable" shall mean any account payable of Seller that
relates primarily to or arises primarily out of the operation of the Business.
"Business Account Receivable" shall mean any account receivable of Seller
that relates primarily to or arises primarily out of the operation of the
Business.
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The term "business day" shall mean any day other than a
Saturday, Sunday or other day on which banks in the City of New York are
permitted or required to close by law or regulation.
"Business Equipment" shall mean all furniture, medical and
other equipment, tools, and other tangible property (except for the Excluded
Assets) that are used or held primarily for use in the Business.
"Business Inventory" shall mean all inventory of goods and
supplies used or maintained in connection with the Business including, but not
limited to, food, cleaning materials, disposables, linens, consumables, office
supplies, drugs and medical supplies.
"Business Names" shall mean all of Seller's goodwill relating
to the Business and Seller's rights to the use in the Business of the names and
marks "Xxxxxx Heights" and any and all formative, variants and derivatives
thereof.
"Closing" and "Closing Date" shall have the respective
meanings set forth in Section 4.1 or Section 7.12(b), as applicable.
"Closing Date Undertaking" shall have the meaning set forth in
Section 8.3(d).
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Confidentiality Agreement" shall have the meaning set forth
in Section 7.2.
"Contracts" shall mean contracts, leases, indentures,
agreements, commitments, purchase orders and all other legally binding
arrangements, whether in existence on the date hereof or subsequently entered
into, including all amendments thereto.
"Disclosure Schedule" shall mean the Schedules referred to in
Article V of this Agreement.
"Environmental Law" shall mean any applicable Governmental
Rule issued, promulgated or entered into by any Governmental Entity relating to
the environment, to the preservation or reclamation of natural resources, or to
Hazardous Substances.
"Escrow Amount" shall have the meaning set forth in Section
4.2(c).
"Excel" shall mean Excel Retirement Communities, Inc.
"Excluded Assets" shall have the meaning set forth in Section
2.2(b).
"Excluded Liabilities" shall have the meaning set forth in
Section 2.3(b).
"Facility" shall mean the real property located in St. Louis,
Missouri on which the Business is operated, as such real property is more
specifically described in Exhibit A, together with Seller's right, title and
interest in all buildings, fixtures and improvements thereon.
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"Financial Statements" shall have the meaning set forth in
Section 5.4.
"First Six-Month Period" shall have the meaning set forth in
Section 10.1.
"General Assignment and Xxxx of Sale" shall have the meaning
set forth in Section 8.2(d).
"Governmental Entity" shall mean any court, administrative
agency or commission or other governmental authority or instrumentality, whether
domestic or foreign.
"Governmental Rule" shall mean any law, judgment, order,
decree, statute, ordinance, rule or regulation issued or promulgated by any
Governmental Entity.
"Xxxxxx Heights Limited Partnership" shall mean Xxxxxx Heights
Limited Partnership, a Missouri limited partnership and the owner of a majority
of the partnership interests in Seller.
"Hazardous Substance" means any materials listed in 49 C.F.R.
_ss._172.101 and any materials defined as toxic or hazardous pursuant to 42
U.S.C.A. ss. 9601 (14) or any other Environmental Law.
"HSR Act" shall mean Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended.
"Lien" shall mean any mortgage, claim, charge, lien, security
interest, easement, right of way, pledge, covenant, restriction or encumbrance
of any nature whatsoever.
"Loss" shall mean any loss, liability, claim, damage or
expense, including reasonable legal fees and expenses.
"Management Contract" shall mean the management contract
between Excel and Seller pursuant to which Excel manages the Facility.
"Marketing Materials" shall mean all advertising materials,
customer lists, training materials and market research materials.
"Material Adverse Effect" shall mean an effect which,
individually or together with other adverse effects, is materially adverse to
the business, assets, financial condition or results of operations of the
Business taken as a whole, other than an effect relating to the economy in
general or changes relating to the Business' industry in general.
"Partnership Agreement" shall mean the Amended and Restated
Partnership Agreement of Xxxxxx Heights Enterprises dated as of December 30,
1985.
"Partnership Consent" shall have the meaning set forth in
Section 5.2.
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"Permitted Lien" shall mean (i) any Lien disclosed in Schedule
1, (ii) any Lien for Taxes, assessments and other governmental charges that are
not yet due and payable or that may thereafter be paid without penalty, or that
are being contested in good faith by appropriate proceedings and (iii) any
imperfection of title or other covenants, restrictions or encumbrance that,
individually or in the aggregate with other such imperfections, covenants,
restrictions and encumbrances, is not substantial in character or amount and
does not materially interfere with the use of the Acquired Assets in the
Business as presently conducted.
The term "person" shall mean any individual, corporation,
partnership, limited liability company, joint venture, trust, business
association, organization, Governmental Entity or other entity.
"Personal Property" shall mean all of the Acquired Assets
other than the Facility.
"Purchase Price" shall have the meaning set forth in Section
"Purchaser" shall mean Capital Senior Living Properties, Inc.,
a Texas corporation.
"Purchaser Indemnified Parties" shall have the meaning set
forth in Section 10.1.
"Xxxxxxx Xxxxx Barney" shall mean Salomon Brothers Inc and
Xxxxx Xxxxxx Inc., collectively.
"Second Six-Month Period" shall have the meaning set forth in
Section 10.1.
"Seller" shall mean Xxxxxx Heights Enterprises, a Texas
general partnership.
"Seller Indemnified Parties" shall have the meaning set forth
in Section 10.2.
"Tax" shall mean all Federal, state, local and foreign taxes
and assessments, including all interest, penalties and additions with respect
thereto.
"Tax Return" shall have the meaning set forth in Section 3.2.
"Termination Date" shall have the meaning set forth in Section
11.3.
"Third Party Claim" shall have the meaning set forth in
Section 10.5(b).
"WARN Act" shall have the meaning set forth in Section 7.5.
Section 1.2. Interpretation.
(a) When used in this Agreement the words "include",
"includes" and "including" shall be deemed to be followed by
the words "without limitation".
(b) When used in this Agreement, the word "primarily"
shall be deemed to be followed by the words "or exclusively".
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(c) Any terms defined in the singular shall have a
comparable meaning when used in the plural, and vice versa.
(d) When used in this Agreement, the word "or" is not
exclusive.
(e) All references to Articles, Sections, Exhibits,
Schedules and Appendices shall be deemed references to
Articles, Sections, Exhibits, Schedules and Appendices to this
Agreement.
(f) This Agreement shall be deemed drafted jointly by
all the parties hereto and shall not be specifically construed
against any party hereto based on any claim that such party or
its counsel drafted this Agreement.
Article II. SALE AND PURCHASE OF ACQUIRED ASSETS
Section 2.1. Purchase And Sale. Upon the terms
and subject to the conditions of this Agreement, on the Closing Date, Seller
shall sell, assign, transfer, convey and deliver to Purchaser, and Purchaser
shall purchase, acquire and accept, all of Seller's right, title and interest
in, to and under the Acquired Assets.
Section 2.2. Acquired Assets and Excluded Assets.
(a) The term "Acquired Assets" shall mean the properties, assets, goodwill and
rights of whatever kind and nature, real or personal, tangible or intangible,
other than the Excluded Assets, of Seller existing on the Closing Date that
relate primarily to or arise primarily out of the operation of the Business,
including:
(i) the Facility;
(ii) all Business Equipment;
(iii) all Business Inventory;
(iv) all Business Accounts Receivable;
(v) all Business Names;
(vi) all right, title and interest of Seller in and to the
Contracts to which Seller is a party or by which Seller
is bound that are listed in Schedule 5.14 (other than
those Contracts which are 1 identified on Schedule 5.14
as Contracts not being assumed by Purchaser), and all
other Contracts to which Seller is a party on the
Closing Date that relate primarily to or arise
primarily out of the operation of the Business that are
not required to be listed in such Schedule 5.14 and
which were entered into in the ordinary course of the
Business, in each case, to the extent such Contracts
are assignable;
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(vii)all Marketing Materials that relate primarily to or
arise primarily out of the operation of the Business
that are in the possession of Seller;
(viii) all records and lists pertaining to residents,
accounts and suppliers, personnel records, books,
ledgers, files and other printed and written materials
reasonably necessary for Purchaser's continuing
operation of the Business, other than books, records
and other data relating to the Excluded Assets and the
Excluded Liabilities and other books and records
reasonably retained by Seller; and
(ix) all of Seller's rights against third parties pursuant
to the warranties and guarantees identified on Schedule
2.2(a).
(b) The term "Excluded Assets" shall mean the following:
(i) cash on hand or in banks (except security deposits
and other deposits from tenants) and cash equivalents
owned by Seller relating to the operations of the
Business;
(ii) all rights of Seller under this Agreement and the
agreements, instruments and certificates delivered in
connection with this Agreement;
(iii) all records prepared in connection with the sale of
the Business, including the bids and other
information received from third persons in respect of
the Business and analyses relating to the Business;
(iv) any assets under any Benefit Plan;
(v) all rights relating to the Excluded Liabilities;
(vi) business records reasonably retained by Seller;
provided, however, that Purchaser may retain copies
of such records that are reasonably required in the
operation of the Business by Purchaser;
(vii) any tax refunds, insurance refunds from prepaid
insurance, insurance deposits or recoveries from
claims with respect to periods (or portions thereof)
ending prior to the Closing Date, except as provided
in Section 7.12(b) hereof;
(viii) manuals developed by Excel relating to personnel,
marketing and accounting policies and procedures;
(ix) the Management Contract;
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(x) furniture, computers and similar tangible property
not located at the Facility and identified on
Schedule 2.2(b); and
(xi) all of Seller's rights, claims, causes of action or
rights of set-off against third parties relating to
the Business or Acquired Assets with respect to
periods (or portions thereof) ending on or prior to
the Closing Date.
(c) Nothing in this Agreement shall be construed as an attempt
by Seller to assign any Contract to the extent that such Contract is not
assignable without the necessary consent of the other party or parties thereto.
Seller shall use reasonable efforts, in cooperation with Purchaser, to secure
any necessary consent to assignment of those Contracts indicated with an
asterisk on Schedule 5.14 which consent has not been obtained prior to the
Closing Date; provided, however, that Seller shall not be required to make any
payment to any person or forego any benefits in order to obtain such consent.
Section 2.3. Assumption of Certain Liabilities and
Obligations. (a) Upon the terms and subject to the conditions of this Agreement,
Purchaser shall assume, effective as of the Closing, and agrees to pay, perform
and discharge when due, and agrees to indemnify Seller and its Affiliates and
hold Seller and its Affiliates harmless from and after the Closing from, the
Assumed Liabilities (as defined below). "Assumed Liabilities" means the
following and only the following:
(i) all obligations and liabilities of
Seller pursuant to the Contracts
included in the Acquired Assets;
provided that all payments pursuant
to the Contracts included in the
Acquired Assets which are due prior
to the Closing Date shall have been
paid by Seller;
(ii) all Business Accounts Payable for
which payment is made by Seller to
Purchaser pursuant to Section 2.3(c)
hereof;
(iii) any obligation or liability for
Taxes for any periods that are
attributable to the Business or
relating to the Acquired Assets,
relating to any periods (or portions
thereof) beginning on or after the
Closing Date; and
(iv) the obligations of Seller with
respect to accrued but untaken
vacation and sick days earned by
Acquired Employees as of the Closing
Date, to the extent Seller has paid
Purchaser for such obligations as
provided in Section 7.5(c).
(b) The term "Excluded Liabilities" shall mean:
(i) any obligation or liability for Taxes that
relates primarily to or arises primarily as a
result of any of the Excluded Assets;
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(ii) any obligation or liability for income Taxes
that relates solely to or arises solely as a
result of the sale or transfer from Seller
to Purchaser of any of the Acquired Assets;
(iii) any obligation or liability of Seller for
Taxes attributable to the Business or
relating to the Acquired Assets for any
periods (or portions thereof) ending on or
prior to the Closing;
(iv) all obligations and liabilities of Seller in
respect of any current or former employee of
Seller engaged in the Business, which
obligation or liability arises out of acts
or conditions that occurred prior to the
Closing Date, including, without limitation,
any liability or obligation under bonus
programs maintained by Sellers;
(v) except as otherwise provided in Section
7.5(c), any obligation or liability of
Seller arising under or in connection with
any Benefit Plan;
(vi) all payments due prior to the Closing Date
pursuant to the Contracts included in the
Acquired Assets;
(vii) all Business Accounts Payable for which
payment is not made by Seller to Purchaser
pursuant to Section 2.3(c) hereof;
(viii) any liability under the Management Contract;
and
(ix) the obligations of Seller with respect to
accrued but untaken vacation and sick days
earned by Acquired Employees as of the
Closing Date, except to the extent Seller
has paid Purchaser for such obligations as
provided in Section 7.5(c).
(c) Except as to those items which are to be apportioned as
provided in Section 2.3(d) below, with regard to expenses incurred in respect of
Business Accounts Payable during periods (or portions thereof) ending on or
prior to the Closing Date, Seller agrees (i) to pay all Business Accounts
Payable due and payable prior to the Closing Date and (ii) at the Closing, to
pay to Purchaser an amount equal to the estimated cost of Business Accounts
Payable not previously paid.
(d) Any ad valorem, use, real and personal property,
intangible and other similar Taxes, installments or special assessments,
utility, water or similar payments arising from, or relating to, the Acquired
Assets or the conduct of the Business (including such other items as are
normally apportioned at the closings of properties similar to the Facility in
St. Louis County, Missouri), which relate to periods both before and after the
Closing Date shall be prorated and adjusted between Seller and Purchaser as of
the Closing Date on a per diem basis and Seller shall be responsible only for
the portion of such amounts allocable to the period prior to the Closing Date
and Purchaser shall be responsible for the remainder.
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(e) Except as otherwise agreed to by the parties, whenever it
is necessary to determine the liability for Taxes for a portion of a taxable
year or period that begins before and ends on or after the Closing Date, the
determination of the Taxes for the portion of the year or period ending on, and
the portion of the year or period beginning on or after, the Closing Date shall
be determined by assuming that the taxable year or period ended at the close of
business on the Closing Date.
(f) Except for the Assumed Liabilities, all obligations and
liabilities arising as a result of the ownership by Seller prior to the Closing
of, or the operation prior to the Closing of the activities conducted at, the
Facility (including all obligations and liabilities relating to personal injury
or Environmental Laws) shall be the responsibility of Seller. All obligations
and liabilities arising as a result of the ownership by Purchaser subsequent to
the Closing of, or the operation subsequent to the Closing of the activities
conducted at, the Facility (including all obligations and liabilities relating
to personal injury or Environmental Laws) shall be the responsibility of
Purchaser.
Article III. PURCHASE PRICE
Section 3.1. Purchase Price. The purchase price for the
Acquired Assets shall be $23,000,000, in cash (the "Purchase Price").
Section 3.2. Allocation of Purchase Price. On or prior to the
Closing Date, Seller and Purchaser shall mutually agree on an allocation of the
Purchase Price and the amount of the Assumed Liabilities (and other capitalized
costs) among the Acquired Assets in accordance with Section 1060 of the Code and
the regulations promulgated thereunder and all applicable provisions of state,
local and foreign law (such allocations, the "Section 1060 Allocations"). If
Seller and Purchaser are unable to agree with respect to the Section 1060
Allocations, Seller and Purchaser shall select a firm of independent certified
public accountants mutually acceptable to Seller and Purchaser from among Price
Waterhouse Coopers LLP, KPMG Peat Marwick LLP, Deloitte & Touche LLP, Ernst &
Young LLP, and Xxxxxx Xxxxxxxx LLP to determine such allocations. The
conclusions of such accounting firm shall be binding on the parties. The fees
and expenses of such accounting firm shall be shared equally by Seller and
Purchaser. Each of the parties hereto agrees (i) to prepare and file reports,
returns, declarations, statements, forms, extensions or other documents filed or
required to be filed with any federal, state, local or other governmental
department, court or other authority in respect of any Tax ("Tax Returns"),
including Form 8594, in a manner consistent with the Section 1060 Allocations,
as finally determined pursuant to this Section 3.2, (ii) to report this
transaction for federal, state, local and foreign income tax purposes in
accordance with the Section 1060 Allocations, as finally determined pursuant to
this Section 3.2, and (iii) to use its best efforts to sustain the Section 1060
Allocations, as finally determined pursuant to this Section 3.2, in any
subsequent tax audit or dispute.
Article IV. THE CLOSING
Section 4.1. Closing Date. The closing of the sale and
transfer of the Acquired Assets (hereinafter called the "Closing") shall take
place at the offices of Xxxxx Xxxxxxxxxx LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, on the last business day of the month in
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which all of the conditions to each party's obligations under Article VIII have
been satisfied or waived, or at such other time, date and place as shall be
mutually agreed to by the parties hereto (such date of the Closing being
hereinafter referred to as the "Closing Date").
Section 4.2. Transactions To Be Effected At The Closing.
At the Closing:
(a) Seller shall deliver or cause to be delivered to Purchaser
all documents referred to in Section 8.2, in each case appropriately
executed;
(b) Purchaser shall deliver or cause to be delivered to Seller
(i) the Closing Date Undertaking, appropriately executed; and (ii) all
other documents referred to in Section 8.3, in each case appropriately
executed; and
(c) Purchaser shall pay (i) $6,750,000 of the Purchase Price
(the "Escrow Amount") by wire transfer to an escrow account to be
established prior to the Closing Date and (ii) the remainder of the
Purchase Price ($16,250,000) by wire transfer to such bank account or
accounts as may be designated by Seller. Purchaser shall be provided
with wire transfer instructions at least two business days prior to the
Closing Date. The Escrow Amount shall be disbursed to Seller by the
escrow agent at such times and by such amounts as the indemnification
obligations of Seller to the Purchaser Indemnified Parties are reduced
in accordance with the provisions of Article X hereof.
Article V. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Purchaser as follows:
Section 5.1. Seller's Organization; Good Standing. Seller is a
general partnership, duly organized, validly existing and in good standing under
the laws of the State of Texas. Seller has the requisite power and authority to
own the Acquired Assets and to carry on the Business as currently conducted.
Seller is duly qualified to conduct business as a foreign entity in the State of
Missouri.
Section 5.2. Authority; Execution and Delivery. Seller has the
requisite power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by Seller, and the consummation of the transactions contemplated hereby have
been duly and validly authorized, subject to the consent of at least 51% in
interests of the Class A Limited Partners of Xxxxxx Heights Limited Partnership
(the "Partnership Consent"). Seller agrees to make a good faith effort to obtain
the Partnership Consent. This Agreement has been duly executed and delivered by
Seller and, assuming the due authorization, execution and delivery of this
Agreement by Purchaser, constitutes the legal, valid and binding obligation of
Seller, enforceable against Seller in accordance with its terms, subject to the
Partnership Consent, and subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and other similar laws affecting
creditors' rights generally from time to time in effect and to general
principles of equity (including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing) regardless of whether considered in
a proceeding in equity or at law.
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Section 5.3. Consents; No Violation, Etc. Except for the
applicable requirements of the HSR Act and the rules and regulations promulgated
thereunder and except as set forth on Schedule 5.3, the execution and delivery
of this Agreement do not, and the consummation of the transactions contemplated
hereby and the compliance with the terms hereof will not (i) violate any
Governmental Rule applicable to Seller, (ii) subject to the Partnership Consent,
conflict with the Partnership Agreement, (iii) conflict with any Contract set
forth on Schedule 5.14, or (iv) require any approval, authorization, consent,
license, exemption, filing or registration with any court, arbitrator or
Governmental Entity, except for such approvals, authorizations, consents,
actions or filings which have been obtained or made or which, if not obtained or
made, would not have a Material Adverse Effect or materially interfere with
Seller's performance of its obligations hereunder. Seller is not a "foreign
person" as defined in Section 1445 of the Code and the regulations relating
thereto.
Section 5.4. Financial Statements; Undisclosed Liabilities.
Attached hereto as Schedule 5.4 are the audited financial statements of Seller
as of December 31, 1995, December 31, 1996 and December 31, 1997 and unaudited
financial statements for the six months ended June 30, 1998 (the "Financial
Statements"). The Financial Statements have been prepared from the books and
records of Seller and fairly present in all material respects the financial
condition and results of operations of Seller for the periods indicated (except
in each case as described in Schedule 5.4 and as may be described in the notes
included therein). There are no liabilities or obligations related to the
Business which would reasonably be expected to have a Material Adverse Effect,
except (i) as reflected in the Financial Statements, (ii) as disclosed in the
Disclosure Schedule, (iii) for purchase contract and orders for inventory
entered into in the ordinary course of business, (iv) for liabilities incurred
in the ordinary course of business since December 31, 1997 and (v) for Excluded
Liabilities.
Section 5.5. Title to Acquired Assets. Seller has good and
valid title to all the Acquired Assets, free and clear of all Liens other than
Permitted Liens. This Section 5.5 does not relate to the Facility, which is
exclusively the subject of Section 5.6.
Section 5.6. Real Property. Seller has good and insurable fee
title to the Facility, free and clear of all Liens other than (i) Permitted
Liens, (ii) easements, covenants, rights-of-way, and other encumbrances or
restrictions shown on the title commitment or survey previously delivered to
Purchaser by Seller, (iii) any grants or reservation of surface or subsurface
rights of others in and to the removal and mining of oil, gas or minerals,
including rights of ingress and egress with respect thereto, (iv) zoning,
building, land use and other restrictions imposed under any Governmental Rule
and (v) easements, covenants, rights-of-way or other encumbrances, restrictions
or imperfections of title not shown on the title commitment or survey previously
delivered to Purchaser by Seller, none of which items set forth in clauses
(iii), (iv) or (v), individually or in the aggregate, materially interfere with
the use of the Facility in the Business as presently conducted.
Section 5.7. Accounts Receivable. All the trade accounts
receivable of Seller that relate primarily to or arise primarily out of the
operation of the Business as of the Closing Date will represent actual sales
made in the ordinary course of business.
Section 5.8. Absence of Certain Changes or Events. Except
as set forth in Schedule 5.8, to Seller's actual knowledge, since December 31,
1997, Seller has conducted the Business in the
11
ordinary course consistent with past practice, and there has not occurred any
event or condition which would reasonably be expected to have a Material Adverse
Effect.
Section 5.9. Employment Matters.
(a) Schedule 5.9(a) sets forth, as of the date hereof, all
collective bargaining or similar agreements with any labor unions or
associations representing employees of the Business.
(b) Except as set forth on Schedule 5.9(b), the Business is in
compliance with all applicable laws, regulations and orders relating to
the employment of labor, including all such laws, regulations and
orders relating to wages and hours, labor relations, civil rights,
safety and health, workers' compensation, except for such noncompliance
which would not have a Material Adverse Effect.
Section 5.10. Employee Benefit Plans. Schedule 5.10 contains a
list and a brief description of each "employee benefit plan" (as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")), and all other employee compensation and fringe benefit plans or
arrangements (including, without limitation, all bonus, incentive and stock
compensation plans) maintained or contributed to by the Business for the benefit
of any employees of the Business (collectively, the "Benefit Plans"). Seller has
made available to Purchaser complete and correct copies of (i) each Benefit Plan
(or, in the case of any unwritten Plan, a description thereof) and (ii) the most
recent summary plan description of each Benefit Plan (if such description was
required).
Section 5.11. Litigation. As of the date hereof, there is no
suit, claim, action, investigation or proceeding pending or threatened in
writing against Seller that relates to the Business or the Acquired Assets which
(i) if adversely determined would be reasonably expected to result in a Material
Adverse Effect or (ii) challenges or seeks to prevent or enjoin the transactions
contemplated by this Agreement.
Section 5.12. Compliance with Laws. Except as set forth on
Schedule 5.12, Seller is in compliance in all material respects with all
Governmental Rules applicable to it which relate primarily to the Acquired
Assets, except where the failure to so comply would not reasonably be expected
to have a Material Adverse Effect. Except as set forth in Schedule 5.12, Seller
has not received any written notice since January 1, 1997 of any asserted
violation of any such Governmental Rules and Seller has not received any written
notice that any investigation or review by any Governmental Entity with respect
to the Business is pending or that any such investigation or review is
contemplated, except where the outcome of such investigation or review if
adversely determined would not reasonably be expected to have a Material Adverse
Effect. This Section 5.12 does not relate to environmental matters, which are
exclusively the subject of Section 5.15.
Section 5.13. Sufficiency of Acquired Assets. Except as set
forth in Schedule 5.13 and except for the fact that the Management Contract is
an Excluded Asset, the Acquired Assets are sufficient for the operation of the
Business in substantially the same manner as it is currently conducted.
12
Section 5.14. Contracts. Except for Contracts listed on
Schedule 5.14, and except for Contracts relating to Excluded Assets, Seller is
not a party to or bound by any contract primarily relating to the Acquired
Assets, or the Assumed Liabilities which is:
(i) an indenture, note, loan or credit agreement
or other Contract relating to the borrowing
of money by Seller or to the direct or
indirect guarantee or assumption by Seller
of the obligation of any other person in
excess of $10,000;
(ii) a lease or similar agreement under which
Seller is a lessee of, or holds or operates,
any real property owned by any third party;
(iii) a Contract involving future payment for
goods or services by Seller of more than
$10,000 (unless terminable without payment
or penalty upon no more than 30 days'
notice);
(iv) a Contract involving the obligation of
Seller to deliver in the future products or
services for payment of more than $10,000
(unless terminable without payment or
penalty upon no more than 30 days' notice);
(v) a Contract evidencing any Lien on the
Acquired Assets (other than Permitted Liens
or Liens created in the ordinary course of
business); or
(vi) a Contract with or Permit by or from any
Governmental Entity, the loss of which would
materially interfere with the operation of
the Business as presently conducted.
Except as disclosed in Schedule 5.14, each Contract listed thereon is a valid
and binding obligation of Seller. Except as disclosed in Schedule 5.14, Seller
has not received any notice of default or notice of the intention of any party
to any such Contract to terminate such Contract. Complete and correct copies of
all Contracts referred to in Schedule 5.14, together with all modifications and
amendments thereto, have been made available to Purchaser.
Section 5.15. Environmental Matters. Seller has made
available to Purchaser a complete and correct copy of the Phase I Environmental
Site Assessment of the Facility, dated as of April 7, 1998.
Section 5.16. Interests in Seller. No partnership
interests in Seller are held by any entity other than (i) Xxxxxx Heights Limited
Partnership and (ii) X.X. Xxxxxx & Co., Inc., a Missouri corporation.
Section 5.17. No Brokers. Except for Xxxxxxx Xxxxx Barney,
the fees and expenses of which will be paid by Seller, Seller has not entered
into any agreement, arrangement or
13
understanding with any person or firm which will result in the obligation to pay
any finder's fee, brokerage commission or similar payment in connection with the
transactions contemplated hereby.
Section 5.18. Exclusive Representations and Warranties. Other
than the representations and warranties set forth herein, Seller is not making
any other representation or warranty, express or implied, with respect to the
Business or the Acquired Assets.
Article VI. REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller as follows:
Section 6.1. Purchaser's Organization; Good Standing.
Purchaser is a corporation duly organized, validly existing and in good standing
under the laws of the State of Texas. Purchaser is duly qualified to conduct
business as a foreign corporation in the State of Missouri. Purchaser has all
requisite corporate power and authority to carry on its business as it is
currently being conducted.
Section 6.2. Authority; Execution and Delivery. Purchaser has
the requisite corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by Purchaser and the consummation of the transactions
contemplated hereby have been duly and validly authorized. This Agreement has
been duly executed and delivered by Purchaser and, assuming the due
authorization, execution and delivery of this Agreement by Seller, constitutes
the legal, valid and binding obligation of Purchaser, enforceable against
Purchaser in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer and other similar
laws affecting creditors' rights generally from time to time in effect and to
general principles of equity (including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing) regardless of whether
considered in a proceeding in equity or at law.
Section 6.3. Consents; No Violations, Etc. Except for the
applicable requirements of the HSR Act and the rules and regulations promulgated
thereunder, the execution and delivery of this Agreement do not, and the
consummation of the transactions contemplated hereby and the compliance with the
terms hereof will not (i) violate any applicable law, (ii) conflict with any
provision of the certificate of incorporation or by-laws of Purchaser or (iii)
require any approval, authorization, consent, license, exemption, filing or
registration with any court, arbitrator or Governmental Entity, except for such
approvals, authorizations, consents, actions or filings which have been obtained
or made or which, if not obtained or made, would not materially interfere with
Purchaser's performance of its obligations hereunder.
Section 6.4. Litigation. As of the date hereof, there is no
suit, claim, action, investigation or proceeding pending or threatened in
writing against or affecting Purchaser or any of its Affiliates which if
adversely determined would be reasonably expected to prevent or materially delay
the ability of Purchaser to perform its obligations hereunder.
Section 6.5. No Brokers. Purchaser has not entered into any
agreement, arrangement or understanding with any person or firm which will
result in the obligation to pay any
14
finder's fee, brokerage commission or similar payment in connection with the
transactions contemplated hereby.
Section 6.6. ERISA. Purchaser is not acquiring the Acquired
Assets with the assets of any "employee benefit plan" as defined in Section 3(3)
of ERISA.
Section 6.7. Availability of Funds. Purchaser has cash
available that is sufficient to enable it to make payment of the Purchase Price
and any other amounts to be paid by it hereunder.
Article VII. CERTAIN COVENANTS AND AGREEMENTS
Section 7.1. Covenants of Seller Relating to Conduct of
Business. During the period from the date of this Agreement and continuing until
the Closing, Seller agrees (except as expressly provided in this Agreement,
Schedule 7.1 or the Disclosure Schedule, or to the extent that Purchaser shall
otherwise consent in writing) that:
(a) Ordinary Course. Seller shall carry on the Business and
operate the Acquired Assets in the ordinary course in substantially the
same manner as presently conducted, maintain the business records of
the Business in substantially the same manner as presently maintained
and use reasonable efforts to preserve intact the Business' present
business organization, keep available the services of the Business'
present employees and preserve the Business' relationships with
residents, customers, suppliers and others having business dealings
with the Business; provided, however, that nothing contained herein
shall be deemed to require the expenditures of any funds outside the
ordinary course of business.
(b) No Dispositions. Seller shall not sell, lease, or
transfer, or agree to sell, lease, or transfer, any of the Acquired
Assets, except Business Inventory in the ordinary course of business
consistent with prior practice.
(c) No Salary Increases. Seller shall not increase the salary
of any employee of the Business, except pursuant to existing employment
contracts or in the ordinary course of business consistent with prior
practice.
(d) No Additional Material Contracts. Seller shall not enter
into any Contract that would be required to be listed on Schedule 5.14
if it were in effect on the date hereof, including any such Contract
for the purchase of capital assets, without the prior written consent
of Purchaser (which consent shall not be unreasonably withheld).
(e) Other Actions. Seller shall not knowingly take any action
that would reasonably be expected to result in any of the
representations and warranties of Seller set forth in this Agreement
becoming untrue in any material respect or in any of the conditions of
the Closing set forth in Article VIII not being satisfied.
(f) Advise of Changes. Seller shall advise Purchaser within
three business days after Seller becomes aware of the occurrence of any
matter or event that occurs after the date hereof and on or prior to
the Closing Date which is material to the Business.
15
Section 7.2. Purchaser's Access to Information. Seller shall
afford to Purchaser and its accountants, counsel and other representatives
reasonable access upon reasonable advance notice and during normal business
hours during the period prior to the Closing to all the properties, books,
contracts, commitments, Tax Returns and records of the Business (other than the
Excluded Assets). Purchaser acknowledges that any information being provided to
it or its representatives by Seller pursuant to this Agreement is subject to the
terms of a confidentiality agreement between Purchaser and Seller, dated May 5,
1998 (the "Confidentiality Agreement"), which terms are incorporated herein by
reference.
Section 7.3. Purchaser's Preservation of Records.
(a) Purchaser agrees that, at its own expense, it (i) shall
preserve and keep the books, contracts, commitments and records
included in the Acquired Assets for a period of three years from the
Closing Date, or for any longer periods as may be required by any
Governmental Entity or as may be made prudent by the circumstances of
any ongoing litigation, and (ii) shall provide Seller with reasonable
access to the foregoing upon reasonable notice and during normal
business hours. In the event Purchaser wishes to destroy such copies
and records after the time specified above, it shall first give 60
days' prior written notice to Seller, and Seller shall have the right,
at its option and expense, and upon prior written notice given to
Purchaser within such 60 day period, to take possession of all or any
portion of such copies and records.
(b) Purchaser acknowledges and agrees that Seller shall retain
copies of certain personnel records included in the Acquired Assets
which relate to Seller's liabilities in respect of the Acquired
Employees' post-employment benefits.
(c) All information received or retained by Seller or any
representative of Seller pursuant to paragraph (a) or (b) of this
Section 7.3 shall be treated as confidential by Seller and by such
representatives and, except to the extent such information is or
becomes generally available, Seller and its representatives shall use
all reasonable efforts to maintain the confidentiality of such
information. If Seller or any of its representatives is required to
disclose any such information by or to any Governmental Entity, Seller
shall, to the extent feasible, prior to such disclosure, notify
Purchaser of such requirement. Purchaser shall have the right, at its
own expense, to seek confidential treatment of any information to be so
disclosed.
Section 7.4. Legal Conditions to Closing. Each of Seller and
Purchaser agrees to take all reasonable actions necessary to comply promptly
with all legal requirements which may be imposed on it with respect to the
Closing (including the prompt filing of the premerger notification report under
the HSR Act and the furnishing of all information required under the HSR Act),
and shall cooperate with and furnish information to each other and to other
parties in connection with any such legal requirements.
16
Section 7.5. Employee Matters.
(a) Offer of Employment. Purchaser shall offer employment,
effective on the Closing Date, in a comparable position and at no less
favorable base salary, to each person currently employed by Seller
primarily in connection with the Business. Such employment shall be
subject to a 90-day probationary period. All such employees of the
Business who accept Purchaser's offer of employment shall be referred
to herein as "Acquired Employees."
(b) Provision of Similar Benefits. Purchaser shall provide
benefits to Acquired Employees that are, in the aggregate,
substantially similar to those provided to similarly situated new
employees of Purchaser and its Affiliates generally.
(c) Vacation and Other Pay. On or prior to the Closing Date,
Seller shall pay to Purchaser an amount equal to, the aggregate
liability of Seller with respect to accrued but untaken vacation and
sick days earned by Acquired Employees as of the Closing Date, and
Purchaser shall assume the obligations of Seller with respect to such
accrued but untaken vacation and sick days.
(d) WARN Act. Purchaser agrees to provide any required notice
under the Worker Adjustment and Retraining Notification Act, as amended
(the "WARN Act"), and any similar statute, and to otherwise comply with
any such statute with respect to any "plant closing" or "mass layoff"
(as defined in the WARN Act), or similar event affecting Acquired
Employees and occurring on or after the Closing Date. Purchaser shall
indemnify and hold harmless Seller and its Affiliates with respect to
any liability under the WARN Act or similar statute arising from the
actions of Purchaser or its Affiliates on or after the Closing Date.
Section 7.6. Collection of Receivables. From and after the
Closing, Purchaser shall have the right and authority to collect for its own
account all accounts receivable and other items that are included in the
Acquired Assets and to endorse with the name of Seller any checks or drafts
received with respect to any such accounts receivable or other items. Seller
agrees to deliver to Purchaser any cash or other property received directly or
indirectly by it with respect to such accounts receivables and other items.
Section 7.7. Expenses. Except as provided in Section 9.1
hereof in respect of termination of this Agreement pursuant to Section
9.1(a)(ii) hereof, whether or not the Closing occurs, all costs and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such costs and expenses.
Notwithstanding the foregoing or any other provisions of this Agreement, (i)
Purchaser and Seller shall share equally (x) any sales, use, transfer, stamp,
documentary or similar Taxes applicable to the conveyance and transfer from
Seller to Purchaser of the Acquired Assets (other than sales Taxes payable in
connection with the transfer of Personal Property, which shall be governed by
clause (ii) below), (y) any other transfer or documentary Taxes or any filing or
recording fees and related expenses applicable to such conveyance and transfer
(including filing fees and related expenses with respect to the transfer of the
Facility to Purchaser), and (z) if title insurance is obtained by Purchaser, the
cost of the title insurance premium for a standard form owner's policy which
insures the Facility for an amount not exceeding the Purchase Price, such policy
to be in the ALTA form in use in the State of Missouri, and (ii)
17
Purchaser shall pay (x) any sales Taxes payable in connection with the transfer
of Personal Property and (y) the cost of any endorsements requested by Purchaser
to the standard form of owner's title insurance policy. Purchaser shall prepare
and timely file all returns and other documents required in connection with the
foregoing and shall provide Seller with evidence of filing of such returns and
documents and payment of such sales, use, transfer, stamp, documentary and
similar Taxes promptly thereafter. Notwithstanding the foregoing or any other
provisions of this Agreement, Purchaser and Seller agree that all fees incurred
in connection with any filing made pursuant to the HSR Act shall be paid by
Purchaser.
Section 7.8. Financial Information. After the Closing, upon
reasonable written notice, Purchaser and Seller shall furnish or cause to be
furnished to each other and their respective accountants, counsel and other
representatives reasonable access, during normal business hours, to such
information (including records pertinent to the Business) and assistance
relating to the Business as is reasonably necessary for financial reporting and
accounting matters, the preparation and filing of any returns, reports or forms
or the defense of any Tax audit, proceeding, claim or assessment.
Section 7.9. Bulk Transfer Laws. Purchaser hereby waives
compliance by Seller with the provisions of any so-called "bulk transfer law" of
any jurisdiction in connection with the sale of the Acquired Assets to
Purchaser. Seller shall indemnify and hold harmless Purchaser against any and
all liabilities that may be asserted by third parties against Purchaser as a
result of noncompliance with any such bulk transfer law.
Section 7.10. Actions of Purchaser. Purchaser shall not
knowingly take any action that would reasonably be expected to result in any of
the representations or warranties of Purchaser set forth in this Agreement
becoming untrue in any material respect or in any of the conditions of the
Closing set forth in Article VIII not being satisfied.
Section 7.11. No Additional Representations. Purchaser
acknowledges that it and its representatives have been permitted full and
complete access to the Acquired Assets that it and its representatives have
desired or requested to see or review, and that its representatives have had a
full opportunity to meet with Seller and representatives of Seller and employees
of the Business to discuss the Business. Purchaser acknowledges that it and its
representatives have received or have had an opportunity to review prior to the
date hereof all written materials which Seller is required to deliver or make
available, as the case may be, to Purchaser pursuant to this Agreement on or
prior to the date hereof. Purchaser acknowledges that neither Seller nor any
other person has made any representation or warranty, express or implied, as to
the accuracy or completeness of any information regarding the Business or the
Acquired Assets except as expressly set forth in this Agreement and the
Disclosure Schedule, and that neither Seller nor any other person will be
subject to any liability to Purchaser or any other person resulting from the
distribution to Purchaser, or Purchaser's use of, any such information in any
form, including the Confidential Memorandum dated Spring 1998 relating to the
Business, any documents or materials made available to Purchaser in any "data
room," and any management presentation in expectation of the transactions
contemplated hereby.
18
Section 7.12. Maintenance; Repair; Risk of Loss.
(a) Until the Closing, Seller shall maintain the Facility in
substantially its present condition, subject to ordinary wear and tear.
Notwithstanding the foregoing, Seller shall have no obligation to make
any structural repairs or capital improvements.
(b) Prior to the Closing, the risk of loss or damage (except
ordinary wear and tear) by fire or other casualty to the Facility, and
the risk of condemnation of the Facility, is on Seller. In case of
damage beyond ordinary wear and tear or a condemnation, (i) if the
estimated cost to repair the damage or restore to substantially the
condition existing before the casualty or condemnation shall be less
than $1,150,000, or if the estimated time to repair the damage or
restore is less than 120 days, Seller may, at Seller's option, elect to
proceed to Closing and assign to Purchaser the proceeds of any
insurance or award applicable to such casualty or condemnation, or
proceed promptly to repair and restore, at Seller's expense, such
damage in a good and workmanlike manner, using equivalent materials, in
which case the Closing shall be adjourned, pending completion of such
repair and restoration, or (ii) in any other case, either party may
terminate this Agreement upon written notice to the other given within
five (5) business days of obtaining actual knowledge of such casualty
or condemnation. Purchaser may preserve this Agreement following
receipt of a termination notice from Seller by notifying Seller, in
writing, within five (5) business days of Seller's election to
terminate, of Purchaser's election to purchase the Property in its
damaged condition without abatement of Purchase Price (but with an
assignment from Seller of all insurance and/or condemnation proceeds).
Notwithstanding any other provision of this Agreement, if there is an
adjournment of the Closing Date by Seller pursuant to this Section
7.12(b), the Closing Date shall be any business day selected by Seller
after substantial completion of restoration on ten (10) days' notice to
Purchaser.
Section 7.13. NO REPRESENTATIONS BY SELLER. OTHER THAN AS
EXPRESSLY SET FORTH IN THIS AGREEMENT, SELLER HAS NOT MADE AND DOES NOT MAKE ANY
REPRESENTATIONS OR WARRANTIES AS TO THE PHYSICAL OR ENVIRONMENTAL CONDITION,
LAYOUT, LEASES, FOOTAGE, RENTS, INCOME, EXPENSES, ZONING, OPERATIONS, OR ANY
OTHER MATTER OR THING AFFECTING OR RELATING TO THE FACILITY, INCLUDING, WITHOUT
LIMITATION, THE ENVIRONMENTAL CONDITION THEREOF. PURCHASER ACKNOWLEDGES THAT NO
SUCH REPRESENTATIONS HAVE BEEN MADE OTHER THAN AS SPECIFICALLY SET FORTH IN THIS
AGREEMENT AND AGREES UPON CLOSING TO TAKE THE FACILITY "AS IS, WHERE IS" AND
WITH ALL FAULTS, LATENT AND PATENT. WITH RESPECT TO ANY ITEMS OF PERSONAL
PROPERTY CONTAINED WITHIN THE FACILITY, SELLER HAS NOT MADE AND DOES NOT MAKE
ANY REPRESENTATIONS, PROMISES OR WARRANTIES (EXPRESS OR IMPLIED AND WHETHER
DEALING WITH MERCHANTABILITY, FITNESS FOR USE OR OTHERWISE). PURCHASER HEREBY
WAIVES, TO THE EXTENT PERMITTED BY LAW, ANY AND ALL IMPLIED WARRANTIES. NO ORAL
WARRANTIES, REPRESENTATIONS OR STATEMENTS SHALL BE CONSIDERED A PART HEREOF.
SELLER ASSUMES NO RESPONSIBILITY FOR THE CONDITION OF THE FACILITY OR PERSONAL
PROPERTY, HAS MADE NO REPRESENTATIONS WITH RESPECT THERETO AND SHALL HAVE NO
LIABILITY FOR
19
THE ACCURACY OF ANY INSPECTION REPORT RELATING THERETO, PURCHASER HEREBY
ACKNOWLEDGING THAT PURCHASER HAS INSPECTED THE FACILITY AND PERSONAL PROPERTY
AND IS SATISFIED WITH THE CONDITION THEREOF, INCLUDING, WITHOUT LIMITATION, THE
ENVIRONMENTAL CONDITION OF THE FACILITY.
Section 7.14. RELEASE. WITHOUT LIMITING THE PROVISIONS OF
SECTION 7.13 ABOVE, PURCHASER HEREBY RELEASES SELLER AND (AS THE CASE MAY BE)
SELLER'S OFFICERS, DIRECTORS, SHAREHOLDERS, TRUSTEES, PARTNERS, EMPLOYEES,
MANAGERS AND AGENTS FROM ANY AND ALL CLAIMS, DEMANDS, CAUSES OF ACTIONS, LOSSES,
DAMAGES, LIABILITIES, COSTS AND EXPENSES (INCLUDING ATTORNEY'S FEES WHETHER THE
SUIT IS INSTITUTED OR NOT) WHETHER KNOWN OR UNKNOWN, LIQUIDATED OR CONTINGENT
(HEREINAFTER COLLECTIVELY CALLED THE "CLAIMS") ARISING FROM OR RELATING TO
(i)_ANY DEFECTS (PATENT OR LATENT), ERRORS OR OMISSIONS IN THE DESIGN OR
CONSTRUCTION OF THE FACILITY WHETHER THE SAME ARE THE RESULT OF NEGLIGENCE OR
OTHERWISE, OR (ii)_ANY OTHER CONDITIONS, INCLUDING ENVIRONMENTAL AND OTHER
PHYSICAL CONDITIONS, AFFECTING THE FACILITY WHETHER THE SAME ARE A RESULT OF
NEGLIGENCE OR OTHERWISE. THE RELEASE SET FORTH IN THIS SECTION SPECIFICALLY
INCLUDES, WITHOUT LIMITATION, ANY CLAIMS UNDER ANY ENVIRONMENTAL LAWS OF THE
UNITED STATES, THE STATE IN WHICH THE FACILITY IS LOCATED OR ANY POLITICAL
SUBDIVISION THEREOF OR UNDER THE AMERICANS WITH DISABILITIES ACT OF 1990, AS ANY
OF THOSE LAWS MAY BE AMENDED FROM TIME TO TIME AND ANY REGULATIONS, ORDERS,
RULES OF PROCEDURES OR GUIDELINES PROMULGATED IN CONNECTION WITH SUCH LAWS,
REGARDLESS OF WHETHER THEY ARE IN EXISTENCE ON THE DATE OF THIS AGREEMENT.
PURCHASER ACKNOWLEDGES THAT PURCHASER HAS BEEN REPRESENTED BY INDEPENDENT LEGAL
COUNSEL OF PURCHASER'S SELECTION AND PURCHASER IS GRANTING THIS RELEASE OF ITS
OWN VOLITION AND AFTER CONSULTATION WITH PURCHASER'S COUNSEL. THE RELEASE SET
FORTH HEREIN DOES NOT APPLY TO THE REPRESENTATIONS OF SELLER EXPRESSLY SET FORTH
IN THIS AGREEMENT OR ANY INDEMNITY OR WARRANTY MADE BY SELLER IN THIS AGREEMENT
OR ANY DOCUMENT DELIVERED BY SELLER AT CLOSING.
Section 7.15. Disclosure Supplement. From time to time prior
to 5:00 p.m. New York City time on July 30, 1998, Seller may supplement or amend
the Disclosure Schedule with respect to any matter hereafter arising or any
information obtained after the date hereof. Any supplement to or amendment of
the Disclosure Schedule shall be treated for all purposes of this Agreement as
though the matters identified or described therein had been included in the
Disclosure Schedule delivered by Seller contemporaneously with the execution and
delivery of this Agreement.
20
Article VIII. CONDITIONS PRECEDENT
Section 8.1. Conditions to Each Party's Obligations. The
obligation of Purchaser to purchase the Acquired Assets and assume the Assumed
Liabilities and the obligation of Seller to sell, assign, convey and deliver the
Acquired Assets to Purchaser shall be subject to the satisfaction prior to the
Closing of the following conditions:
(a) HSR. Any applicable waiting period under the HSR Act shall
have expired or been terminated.
(b) No Litigation, Injunctions, or Restraints. No temporary
restraining order, preliminary or permanent injunction or other legal
restraint or prohibition preventing the consummation of the
transactions contemplated by this Agreement shall be in effect.
Section 8.2. Conditions to Obligations of Purchaser. The obli-
gation of Purchaser to purchase the Acquired Assets and assume the Assumed Lia-
bilities is subject to the satisfaction on and as of the Closing of each of the
following conditions:
(a) Representations and Warranties. The representations and
warranties of Seller set forth in this Agreement shall be true and
correct as of the Closing as though made on and as of the Closing,
except (i) to the extent such representations and warranties relate to
an earlier date (in which case such representations and warranties
shall be true and correct as of such earlier date) and (ii) except for
breaches of representations and warranties as to matters that,
individually or in the aggregate (and without regard to any materiality
qualifications contained therein), are not reasonably likely to have a
Material Adverse Effect, and Purchaser shall have received a
certificate of Seller to such effect.
(b) Performance of Obligations of Seller. Seller shall have
performed or complied in all material respects with all obligations,
conditions and covenants required to be performed by it under this
Agreement at or prior to the Closing, and Purchaser shall have received
a certificate of Seller to such effect.
(c) Opinion of Counsel to Seller.* Purchaser shall have
received an opinion of counsel to Seller, dated the Closing Date, to
the effect that:
(i) Seller is a general partnership duly
organized, validly existing and in good
standing under the laws of the State of
Texas. Seller is duly qualified to conduct
business as a foreign entity in the State of
Missouri.
(ii) Seller has the power and authority to
execute this Agreement and to consummate the
transactions contemplated hereby; the
execution and
--------
*Opinion to be given by Missouri/Texas counsel.
21
delivery of this Agreement by Seller and the
consummation of the transactions
contemplated hereby have been duly
authorized; and this Agreement has been duly
executed and delivered by Seller and,
assuming the due authorization, execution
and delivery of this Agreement by Purchaser,
constitutes the legal, valid and binding
obligation of Seller enforceable against
Seller in accordance with its terms, subject
to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent
transfer and other similar laws affecting
creditors' rights generally from time to
time in effect and to general principles of
equity (including, without limitation,
concepts of materiality, reasonableness,
good faith and fair dealing) regardless of
whether considered in a proceeding in equity
or at law.
(d) Deliveries. Seller shall have executed and delivered to
Purchaser (i) a deed, with covenants against grantor's acts, for the
real property included in the Facility; (ii) a general assignment and
xxxx of sale in substantially the form set forth on Exhibit B hereto
(the "General Assignment and Xxxx of Sale") and (iii) any required
transfer tax forms and affidavits.
(e) Absence of Certain Changes. Between the date of this
Agreement and the Closing Date, no event shall have occurred, other
than the announcement by a competitor or potential competitor of a plan
or intention to construct a facility that would compete with the
Business and other than decreases in occupancy levels due to natural
attrition, which event would reasonably be expected to result in an
annualized decrease in the combined net operating income before debt
service for calendar year 1998 of (i) the Business and (ii) the
business conducted at the 148-unit retirement community located at 0000
"X" Xxxxxx, Xxxxxxx, Xxxxxxxx (the "Gramercy Hill Business") of
$300,000 or more, as compared to annualized combined net operating
income before debt service of the Business and the Gramercy Hill
Business for 1998 based on the seven-month period ended July 31, 1998.
(f) GAAP Financial Statements. Prior to the Closing, Seller
shall have provided Purchaser with audited financial statements
relating to the Business as of December 31, 1996 and December 31, 1997,
which audited financial statements shall be prepared in accordance with
generally accepted accounting principles.
Section 8.3. Conditions to the Obligations of Seller. The
obligations of Seller to sell, assign, convey, and deliver the Acquired Assets,
or to cause the Acquired Assets to be sold, assigned, conveyed or delivered, as
applicable, is subject to the satisfaction on and as of the Closing of each of
the following conditions:
(a) Representations and Warranties. The representations and
warranties of Purchaser set forth in this Agreement shall be true and
correct in all material respects as of the Closing as though made on
and as of the Closing, except to the extent such representations and
warranties expressly relate to an earlier date (in which case such
representations and warranties shall be true and correct as of such
earlier date), and Seller shall have received a certificate signed by
an authorized officer of Purchaser to such effect.
22
(b) Performance of Obligations of Purchaser. Purchaser shall
have performed in all material respects all obligations required to be
performed by it under this Agreement at or prior to the Closing, and
Seller shall have received a certificate signed by an authorized
officer of Purchaser to such effect.
(c) Opinion of Purchaser's Counsel. Seller shall have received
an opinion of counsel to Purchaser, dated the Closing Date, to the
effect that:
(i) Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of its
state of incorporation. Purchaser is duly qualified to
conduct business as a foreign corporation in the State
of Missouri.
(ii) Purchaser has the requisite corporate power and
authority to execute this Agreement and to consummate
the transactions contemplated hereby; the execution and
delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly
authorized by all necessary corporate action on the
part of Purchaser; and this Agreement has been duly
executed and delivered by Purchaser and, assuming the
due authorization, execution and delivery of this
Agreement by Seller, constitutes the legal, valid and
binding obligation of Purchaser enforceable against
Purchaser in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and other similar laws
affecting creditors' rights generally from time to time
in effect and to general principles of equity
(including, without limitation, concepts of
materiality, reasonableness, good faith and fair
dealing) regardless of whether considered in a
proceeding in equity or at law.
(d) Deliveries. Purchaser shall have executed and delivered
(i) a Closing Date Undertaking in substantially the form set forth on
Exhibit C hereto (the "Closing Date Undertaking") and (ii) any required
transfer tax forms and affidavits.
(e) Partnership Consent. The Partnership Consent shall have
been obtained.
Article IX. TERMINATION, AMENDMENT AND WAIVER
Section 9.1. Termination
(a) Notwithstanding anything to the contrary in this
Agreement, this Agreement may be terminated and the transactions
contemplated hereby abandoned at any time prior to the Closing:
(i) by Purchaser by giving written notice to Seller at any
time prior to 5:00 p.m., New York City time, on July
30, 1998; provided, however, that if Seller shall have
supplemented or amended the Disclosure
23
Schedule after 5:00 p.m., New York City time, on July
18, 1998, then the time during which Purchaser may
terminate this Agreement pursuant to this Section
9.1(a)(i) shall be extended from 5:00 p.m., New York
City time, on July 30, 1998 until 5:00 p.m., New York
City time, on August 3, 1998.
(ii) by Purchaser or Seller at any time from and after 5:00
p.m., New York City time, on August 13, 1998 until such
time as Seller shall have advised Purchaser that (x)
Seller has obtained the Partnership Consent and (y) the
consent of at least 51% in interests of the Class A
Limited Partners of the Gramercy Hill Limited
Partnership to the transactions contemplated by that
certain Asset Purchase Agreement dated as of July 28,
1998 between Capital Senior Living Properties, Inc. and
Gramercy Hill Enterprises has been obtained;
(iii) by mutual written consent of Seller and
Purchaser;
(iv) by Seller if any of the conditions set forth
in Sections 8.1 or 8.3 shall have become
incapable of fulfillment and shall not have
been waived by Seller; or
(v) by Purchaser if any of the conditions set
forth in Sections 8.1 or 8.2 shall have
become incapable of fulfillment and shall
not have been waived by Purchaser;
(vi) by Seller or Purchaser if the Closing does
not occur on or prior to October 31, 1998;
or
(vii) as provided for in Section 7.12(b);
provided, however, that the party seeking termination pursuant to clause (iv),
(v), (vi) or (vii) is not in breach in any material respects of any of its
representations, warranties, covenants or agreements contained in this
Agreement; and further provided, that in the event of termination of this
Agreement by Purchaser or Seller pursuant to clause (ii) above, Seller shall
promptly reimburse Purchaser for third party fees and expenses and for other
out-of-pocket expenses (but not internal time charges) reasonably incurred by
Purchaser in connection with the transactions contemplated hereby, upon
presentation by Purchaser of substantiating evidence thereof, up to a maximum
reimbursement equal to the sum of (x) $45,000 plus (y) the amount of any filing
fees paid by Purchaser in connection with filings made pursuant to the HSR Act
prior to the date of such termination.
(b) In the event of termination by Seller, on the one hand, or
Purchaser, on the other hand, pursuant to this Section 9.1, written
notice thereof shall forthwith be given to the other party and the
transactions contemplated by this Agreement shall be terminated,
without further action by any party. If the transactions contemplated
by this Agreement are terminated as provided herein:
24
(i) Purchaser shall return all documents and
other material received from Seller relating
to the Business and to the transactions
contemplated hereby, whether so obtained
before or after the execution hereof, to
Seller; and
(ii) all confidential information received by
Purchaser with respect to Seller or the
Business shall be treated in accordance with
the Confidentiality Agreement, which shall
remain in full force and effect
notwithstanding the termination of this
Agreement.
(c) If this Agreement is terminated and the transactions
contemplated hereby are abandoned, this Agreement shall become null and
void and of no further force and effect, except for the provisions of
the last sentence of Section 7.2 and the provisions of Sections 7.7,
9.1, 11.7, 11.8 and 11.9. Nothing in this Section 9.1 shall be deemed
to release any party from any liability for any breach by such party of
the terms and provisions of this Agreement.
Section 9.2. Amendments and Waivers. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties hereto. By an instrument in writing, Purchaser, on the one hand, or
Seller, on the other hand, may waive compliance by the other party with any term
or provision of this Agreement that such other party was or is obligated to
comply with or perform.
Article X. INDEMNIFICATION
Section 10.1. Indemnification by Seller.
(a) Seller hereby agrees to indemnify Purchaser and its
Affiliates and their respective officers, directors and employees (the
"Purchaser Indemnified Parties") against, and agrees to hold them
harmless from, any Loss to the extent such Loss arises from or in
connection with the foregoing:
(i) any breach by Seller of any representation
or warranty contained in this Agreement or
any other agreement or documents delivered
in connection herewith;
(ii) any breach by Seller of any of its covenants
contained in this Agreement;
(iii) any and all claims made by third parties
arising out of the operation of the Business
by Seller prior to the Closing Date; or
(iv) any Excluded Liability.
Notwithstanding the foregoing, the indemnifications in favor of the Purchaser
Indemnified Parties contained in this Section 10.1 shall be effective only as
follows: (x) there shall be no indemnification in respect of any individual Loss
or group of related Losses in an amount less than $10,000; and (y)
25
with regard to Losses in respect of which notice is given to Seller that
indemnification is sought pursuant to this Section 10.1 during the period from
the Closing Date until the 180th day after the Closing Date (the "First
Six-Month Period"), the indemnifications in favor of the Purchaser Indemnified
Parties shall not be effective once the aggregate dollar amount of all such
Losses actually paid by Seller in respect of which notice is or was given during
the First Six-Month Period aggregates $6,750,000, and Seller shall thereafter
have no further obligations or liabilities with respect to any Losses in excess
of such amount; and (z) with regard to Losses in respect of which notice is
given to Seller that indemnification is sought pursuant to this Section 10.1
during the period from the 181st day after the Closing Date until the 365th day
after the Closing Date (the "Second Six-Month Period"), the indemnifications in
favor of the Purchaser Indemnified Parties shall not be effective once the
aggregate dollar amount of all such Losses actually paid by Seller in respect of
which notice is or was given during the Second Six-Month Period aggregates an
amount equal to (A) $3,375,000 less (B) the amount of Losses actually paid by
Seller in respect of which notice was given to Seller that indemnification was
sought pursuant to this Section 10.1 during the First Six-Month Period, and
Seller shall thereafter have no further obligations or liabilities with respect
to any Losses in excess of such amount; provided, however, that the foregoing
limitations on Seller's indemnification obligations pursuant to this Section
10.1 shall not apply to any indemnification by Seller for any Losses asserted
against, imposed upon or incurred by the Purchaser Indemnified Parties resulting
from any Excluded Liability or resulting from the operation of the Business by
Seller prior to the Closing Date.
(b) Purchaser acknowledges and agrees that its sole and
exclusive remedy with respect to any and all claims relating to the
subject matter of this Agreement shall be pursuant to the
indemnification provisions set forth in this Article X. In furtherance
of the foregoing, Purchaser hereby waives, to the fullest extent
permitted under applicable law, any and all rights, claims and causes
of action it may have against Seller arising under or based upon any
Governmental Rule.
Section 10.2. Indemnification by Purchaser.
(a) Purchaser hereby agrees to indemnify Seller and its
Affiliates and their respective officers, general partners, limited
partners, directors, officers and employees (the "Seller Indemnified
Parties") against, and agrees to hold them harmless from, any Loss to
the extent such Loss arises from or in connection with:
(i) any breach by Purchaser of any
representation or warranty contained in this
Agreement or any other agreement or document
delivered in connection herewith;
(ii) any breach by Purchaser of any covenant
contained in this Agreement;
(iii) any and all claims made by third parties
arising out of the operation of the Business
by Purchaser after the Closing Date; or
(iv) any Assumed Liability, including any
obligations or liability included in Section
2.3(a)(iv).
26
Notwithstanding the foregoing, the indemnifications in favor of the Seller
Indemnified Parties contained in this Section 10.2 shall be effective only as
follows: (x) there shall be no indemnification in respect of any individual Loss
or group of related Losses in an amount less than $10,000; and (y) with regard
to Losses in respect of which notice is given to Purchaser that indemnification
is sought pursuant to this Section 10.2 during the First Six-Month Period, the
indemnifications in favor of the Seller Indemnified Parties shall not be
effective once the aggregate dollar amount of all such Losses actually paid by
Purchaser in respect of which notice is or was given during the First Six-Month
Period aggregates $6,750,000, and Purchaser shall thereafter have no further
obligations or liabilities with respect to any Losses in excess of such amount;
and (z) with regard to Losses in respect of which notice is given to Purchaser
that indemnification is sought pursuant to this Section 10.2 during the Second
Six-Month Period, the indemnifications in favor of the Seller Indemnified
Parties shall not be effective once the aggregate dollar amount of all such
Losses actually paid by Purchaser in respect of which notice is or was given
during the Second Six-Month Period aggregates an amount equal to (A) $3,375,000
less (B) the amount of Losses actually paid by Purchaser in respect of which
notice was given to Purchaser that indemnification was sought pursuant to this
Section 10.2 during the First Six-Month Period, and Purchaser shall thereafter
have no further obligations or liabilities with respect to any Losses in excess
of such amount; provided, however, that the foregoing limitations on Purchaser's
indemnification obligations pursuant to this Section 10.2 shall not apply to any
indemnification by Purchaser for any Losses asserted against, imposed upon or
incurred by the Seller Indemnified Parties resulting from any Assumed Liability
or resulting from the operation of the Business by Purchaser after the Closing
Date.
(b) Seller acknowledges and agrees that its sole and exclusive
remedy with respect to any and all claims relating to the subject
matter of this Agreement shall be pursuant to the indemnification
provisions set forth in this Article X. In furtherance of the
foregoing, Seller hereby waives, to the fullest extent permitted under
applicable law, any and all rights, claims and causes of action it may
have against Purchaser arising under or based upon any Governmental
Rule.
Section 10.3. Losses Net of Insurance, etc. The amount of any
Loss for which indemnification is provided under this Article X shall be net of
any amounts recovered or recoverable by the indemnified party under insurance
policies with respect to such Loss.
Section 10.4. Termination of Indemnification. The obligations
to indemnify and hold harmless any party, (a) pursuant to Sections 10.1(a)(i)
and 10.2(a)(i), shall terminate when the applicable representation or warranty
terminates pursuant to Section 11.3 and (b) pursuant to the other clauses of
Sections 10.1 and 10.2, shall not terminate.
Section 10.5. Procedure.
(a) In order for an indemnified party (the "indemnified
party") to be entitled to any indemnification provided for under this
Agreement, such indemnified party shall, following the discovery of the
matters giving rise to any Loss, notify the indemnifying party (the
"indemnifying party") in writing of its claim for indemnification for
such Loss, specifying in reasonable detail the nature of such Loss and
the amount of the liability estimated to accrue therefrom; provided,
however, that failure to give such notification shall not affect the
27
indemnification provided hereunder except to the extent the
indemnifying party shall have been actually prejudiced as a result of
such failure (except that the indemnifying party shall not be liable
for any expenses incurred during the period in which the indemnified
party failed to give such notice and except that, with regard to claims
for indemnification in respect of which notice is required to be given
during the First Six-Month Period or the Second Six-Month Period, as
the case may be, pursuant to the provisions of Sections 10.1 and 10.2
above, the indemnifying party shall have no liability for claims in
respect of which notice has not been received within the required time
period). Thereafter, the indemnified party shall deliver to the
indemnifying party, within five business days after the indemnified
party's receipt of such notice, all information and documentation
reasonably requested by the indemnifying party with respect to such
Loss.
(b) If the indemnification sought pursuant hereto involves a
claim made by a third party against the indemnified party (a "Third
Party Claim"), the indemnifying party shall be entitled to participate
in the defense of such Third Party Claim and, if it so chooses, to
assume the defense of such Third Party Claim with counsel selected by
the indemnifying party. Should the indemnifying party so elect to
assume the defense of a Third Party Claim, the indemnifying party shall
not be liable to the indemnified party for any legal expenses
subsequently incurred by the indemnified party in connection with the
defense thereof. If the indemnifying party assumes such defense, the
indemnified party shall have the right to participate in the defense
thereof and to employ counsel, at its own expense, separate from the
counsel employed by the indemnifying party, it being understood that
the indemnifying party shall control such defense. The indemnifying
party shall be liable for the fees and expenses of counsel employed by
the indemnified party for any period during which the indemnifying
party has not assumed the defense thereof (other than during any period
in which the indemnified party shall have failed to give notice of the
Third Party Claim as provided above). If the indemnifying party chooses
to defend or prosecute a Third Party Claim, all of the parties hereto
shall cooperate in the defense or prosecution thereof. Such cooperation
shall include the retention and (upon the indemnifying party's request)
the provision to the indemnifying party of records and information
which are reasonably relevant to such Third Party Claim, and making
employees available on a mutually convenient basis to provide
additional information and explanation of any material provided
hereunder. If the indemnifying party chooses to defend or prosecute any
Third Party Claim, the indemnified party will agree to any settlement,
compromise or discharge of such Third Party Claim which the
indemnifying party may recommend and which by its terms obligates the
indemnifying party to pay the full amount of the liability in
connection with such Third Party Claim. Whether or not the indemnifying
party shall have assumed the defense of a Third Party Claim, the
indemnified party shall not admit any liability with respect to, or
settle, compromise or discharge, such Third Party Claim without the
indemnifying party's prior written consent.
Article XI. GENERAL PROVISIONS
Section 11.1. Notices. All notices, requests and other
communications hereunder shall be in writing and shall be sent, delivered or
mailed, addressed as follows:
(a) if to Purchaser, to:
28
Xxxxx X. Xxxxxxxx, Esq.
Capital Senior Living Corporation
00000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
and
Xx. Xxxxxxxx Xxxxx
Capital Senior Living Corporation
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
with a copy (which shall not constitute notice) to:
Jenkens & Xxxxxxxxx
0000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000
Attention: Xxxxxxx X. Xxxx XX, Esq.
if to Seller, to:
Xxxxxx X. Xxxxxx
Xxxxxx Heights Corp.
c/o Interactive Teleservices
0000 X Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
with a copy (which shall not constitute notice) to:
Xxxxx Xxxxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Xxxxxx X. Xxxxxx, Esq.
Each such notice, request or other communication shall be given (i) by hand
delivery, (ii) by certified mail or (iii) by nationally recognized courier
service. Each such notice, request or communication shall be effective when
delivered at the address specified in this Section 11.1 (or in accordance with
the latest unrevoked direction from the receiving party).
29
Section 11.2. Headings. The table of contents and headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.
Section 11.3. Survival of Representations and Warranties. All
representations and warranties of Seller and Purchaser contained herein or made
pursuant hereto shall survive the Closing Date for a period of one year after
the Closing Date. Any right of indemnification pursuant to Article X hereof with
respect to a claimed breach of a representation or warranty shall expire at the
date of termination of the representation or warranty claimed to be breached
(the "Termination Date"), unless on or prior to the Termination Date the party
from whom indemnification is sought shall have received notice in accordance
with the provisions of Section 10.5 herein.
Section 11.4. Severability. If any provision of this
Agreement, or the application thereof to any person, place or circumstances,
shall be held by a court of competent jurisdiction to be invalid, unenforceable,
or void, the remainder of this Agreement and such provisions as applied to other
persons, places, and circumstances shall remain in full force and effect;
provided, however, that in the event that the terms and conditions of this
Agreement are materially altered as a result of this paragraph, the parties
hereto will renegotiate the terms and conditions of this Agreement to resolve
any inequities.
Section 11.5. Counterparts. This Agreement may be executed in
one or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other parties, it being
understood that all parties need not sign the same counterpart.
Section 11.6. Entire Agreement; No Third Party Beneficiaries.
This Agreement and the Confidentiality Agreement constitute the entire agreement
and supersedes all prior agreements and understandings, both written and oral,
among the parties hereto with respect to the subject matter hereof. Except as
specifically provided herein or therein, such agreements are not intended to
confer upon any person other than the parties hereto any rights or remedies
hereunder or thereunder.
Section 11.7. Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of Missouri,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of law.
Section 11.8. Consent to Jurisdiction. Each of Purchaser and
Seller irrevocably submits to the non-exclusive jurisdiction of any Missouri
state court and any Federal Court located in the State of Missouri for the
purposes of any suit, action or other proceeding arising out of this Agreement
or any transaction contemplated hereby. Each of Purchaser and Seller further
agrees that service of any process, summons, notice or document by U.S.
registered mail to such party's respective address set forth in Section 11.1
shall be effective service of process for any action, suit or proceeding in
Missouri with respect to any matters to which it has submitted to jurisdiction
as set forth above in the immediately preceding sentence. Each of Purchaser and
Seller irrevocably and unconditionally waives any objection to the laying of
venue of any action, suit or proceeding arising out of this Agreement or the
transactions contemplated hereby in any Missouri state court and any Federal
Court located in the State of Missouri and hereby further irrevocably and
unconditionally
30
waives and agrees not to plead or claim in any such court that any such action,
suit or proceeding brought in any such court has been brought in an inconvenient
forum.
Section 11.9. Publicity. Except as may be required by
applicable securities laws upon the advice of counsel, neither Seller, on the
one hand, nor Purchaser, on the other hand, shall issue or cause the publication
of any press release or other public announcement with respect to the
transactions contemplated by this Agreement without the consent of the other
party, which consent shall not be unreasonably withheld.
Section 11.10. Assignment. Neither this Agreement nor any of
the rights, interests or obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent (which consent shall not be
unreasonably withheld) of the other parties, except that Purchaser may assign
its rights, interests and obligations hereunder to any Affiliate of Capital
Senior Living Corporation without the prior written consent of Seller, provided
that, prior to any such assignment to an Affiliate of Capital Senior Living
Corporation, Purchaser executes and delivers to Seller a written guaranty, in
form reasonably satisfactory to Seller, of the performance of all of Purchaser's
obligations under this Agreement. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of and be enforceable by
the parties hereto and their respective successors and assigns.
31
IN WITNESS WHEREOF, Purchaser and Seller have caused this Agreement to
be signed by their respective parties thereunto duly authorized, all of the date
first written above.
CAPITAL SENIOR LIVING PROPERTIES, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------
Xxxxx X. Xxxxxxxx
Vice President
ATTEST:
By: /s/ Xxxxx Xxxxxxxx
------------------
Xxxxx Xxxxxxxx
Director of Investor Services
XXXXXX HEIGHTS ENTERPRISES,
a Texas general partnership
By: Xxxxxx Heights Limited Partnership,
a Missouri limited partnership
By: X.X. Xxxxxx & Co., Inc., a Missouri
corporation
By: /s/ Xxxxxx X. Xxxxxx
--------------------------
Xxxxxx X. Xxxxxx
President
ATTEST:
By: /s/ Xxxxxxxxx Xxxxx
-------------------
Xxxxxxxxx Xxxxx
X.X. XXXXXX & CO., INC. a
Missouri corporation
By: /s/ Xxxxxx X. Xxxxxx
-------------------------
Xxxxxx X. Xxxxxx
President
By: /s/ Xxxxxxxxx Xxxxx
-------------------
Xxxxxxxxx Xxxxx
32
