Amendment No. 4 to Acquisition Agreement
Amendment No. 4, dated as of December 11, 1996 ("Amendment
No. 4"), to the Acquisition Agreement, dated as of June 17, 1996, as
amended by Amendment No. 1 dated as of August 12, 1996, Amendment No. 2
dated as of September 25, 1996 and Amendment No. 3 dated as of October 29,
1996, by and among ADS/Multicare, Inc. and Xxxx X. Xxxxxxxx, Xxxxx
Xxxxxxxx, Xxxxx X. Xxxxxxxx, Xxx X. Xxxxxxxx, Xxxxx Xxxxxxxx (who has
become a party to such Agreement in lieu of Xxxxx Xxxxxxxx (of Xxxxxx)),
Xxxxx X. Xxxxxx and the Seller Entities signatory thereto (the "Acquisition
Agreement").
The parties to the Acquisition Agreement hereby agree as
follows:
1. Capitalized terms used herein but not otherwise defined
herein shall have the respective meanings ascribed thereto in the
Acquisition Agreement.
2. The second sentence of the first paragraph of the
Acquisition Agreement is hereby deleted in its entirety and replaced with
the following:
"The Owner Parties and the selling stockholders and
partners listed on Schedule A who are not Owner Parties are
collectively referred to as the 'Owners.'"
3. Exhibit A to the Acquisition Agreement is hereby deleted
in its entirety and replaced by the Exhibit A attached hereto. At the
Closing, Buyer shall assume all of the liabilities of Solomont Brookline
Limited Partnership other than any liabilities as to which Buyer is
indemnified under the Acquisition Agreement.
4. In the first sentence of Section 2.1 of the Acquisition
Agreement, the sum of "$69,751,000" is hereby deleted and replaced with
"$67,159,000." In the second sentence of Section 2.1 of the Acquisition
Agreement, the sum of "$59,187,300" is hereby deleted and replaced with
"$56,128,900" and the number "531,507," referring to the number of Parent
Shares, is hereby deleted and replaced with the number "554,973." The
amount of the Indemnification Holdback Amount is increased to $1,500,000 by
reason of the provisions of paragraph 20 below.
5. A new paragraph is hereby added at the end of Section 2.1
of the Acquisition Agreement as follows:
"In order to induce Xxxxx X. Xxxxxx and Xxxxxx X. Grape
to sell their interests in the Seller Entities, Buyer shall pay at
the Closing in cash $2,400,000 to Xxxxx X. Xxxxxx and $100,000 to
Xxxxxx X. Grape."
6. Clause (b) in the first paragraph of Section 2.3.1 is
hereby deleted and clause (c) thereof is relettered as clause (b). Academy
shall not be considered a Seller Entity for purposes of preparing the
Closing Balance Sheet under Section 2.3.1. The parties acknowledge that no
post closing adjustment will be made respecting Heritage and that mutually
agreeable adjustments will be made to recognize that such Facility is not
being purchased at the Closing and post-closing adjustments respecting
Heritage will be made as of the closing, if any, of the purchase of such
Facility under procedures as similar as practicable to those set forth in
the Acquisition Agreement. Unless and until Heritage is purchased,
Heritage shall not be considered a Facility and neither ASL, Inc. nor
Arcadia Associates shall be considered a Seller Entity for purposes of the
covenants, warranties or indemnification provisions of the Acquisition
Agreement.
7. Section 2.3.5 is hereby deleted and the following new
Section 2.3.5 is substituted in its entirety therefor:
"2.3.5 Academy.
(a) Within 60 days following the Closing Date, KPMG
Peat Marwick LLP shall deliver or cause to be delivered to Buyer and
the Sellers' Representative an audited balance sheet of Academy as at
the Closing Date, prepared in accordance with generally accepted
accounting principles consistent with the balance sheet as at
December 31, 1995 of Academy heretofore delivered to Buyer (the
"Academy Closing Balance Sheet"), except that all expenses of Academy
in connection with the preparation, execution and performance of this
Agreement and the transactions contemplated hereby that have not been
expended since December 31, 1995, shall be deducted from Shareholders
Equity. The methods and time periods applicable to finalizing the
Closing Balance Sheet in accordance with Section 2.3.1 shall also
apply to finalizing the Academy Closing Balance Sheet.
(b) (1) If the amount of the shareholders equity
reflected on the Academy Closing Balance Sheet ("Academy Closing
Equity") is less than $1,034,393 ("December 31 Academy Equity"), then
the aggregate Purchase Price shall be reduced by an amount equal to
the amount by which Academy Closing Equity is less than December 31
Academy Equity. If the amount of Academy Closing Equity is greater
than December 31 Academy Equity, then the Purchase Price shall be
increased by such excess.
(2) If the amount of Net Academy Liabilities
(as defined below) on the Academy Closing Balance Sheet is greater
than $4,149,536, then the aggregate Purchase Price shall be reduced
by the amount of such excess. Net Academy Liabilities means with
respect to Academy (i) accounts payable plus accrued expenses plus
short term debt plus long term debt (including current maturities of
long term debt) less (ii) cash and cash equivalents.
(c) The Buyer shall pay to the Sellers'
Representative for payment to the relevant Owners, or the Sellers'
Representative shall pay or cause to be paid to the Buyer the amount
of the adjustment required under this Section 2.3.5. Such adjustment
shall be made in cash not later than on the third business day
following final determination of the Academy Closing Balance Sheet."
8. The first sentence of Section 3.2 is hereby amended by
inserting "the day next following" immediately preceding "the Closing
Date."
9. By executing and delivering this instrument (a) Encare of
Massachusetts, Inc. ("Encare"), hereby joins in and becomes a party to the
Acquisition Agreement as a Seller Entity with the intention and effect that
Encare shall be deemed for all purposes to have executed and delivered the
Acquisition Agreement and shall have all of the rights and benefits,
subject to all of the obligations, of a Seller Entity thereunder and (b)
the Owner Parties who are stockholders of Encare (each, an "Encare Owner
Party") agree that each representation, warranty, covenant or agreement in
the Acquisition Agreement made by an Encare Owner Party with respect to the
Seller Entities shall be deemed to have been made with respect to Encare,
except that (i) the representations and warranties made with respect to
Encare shall be limited to the matters set forth in Sections 6.1.2, 6.1.3
and 6.2 (second and third sentences only) (it being understood that Encare
will not be deemed a Seller Entity in making such representations but that
the relevant Sellers will be transferring good and marketable title to
their shares of Encare, free and clear of all Liens) and (ii) Encare shall
be deemed a Seller Entity only for purposes of Sections 2.2, 3.3.1 (l) and
(m), 8.7 (but only as to the obligations of Owner Parties respecting their
shares of Encare and not any action by Encare), 8.13 and 10.8.
10. All references to Section 5.9 in Section 5.4 are hereby
deleted.
11. Buyer shall be entitled to indemnification under
Section 12.2(c) of the Acquisition Agreement only to the extent that the
amount of such indemnification exceeds the amount reserved for such items
by the Seller Entity as of the Closing Date (as reflected in the Closing
Balance Sheet and/or the Academy Closing Balance Sheet), as such reserve
may be increased in accordance with the following: The amount reserved for
such items shall be increased on a dollar for dollar basis by the amount by
which any refund or other positive adjustment by reason of any audit by any
Governmental Authority concerning the operation of any Facility prior to
the Closing exceeds the amount booked as revenue for the period covered by
such audit. Any payment required hereunder shall be made first from the
$1MM Indemnification Deposit or the Academy Indemnification Deposit (as the
case may be) pursuant to the Escrow Agreement and then, when claims of any
type against such funds exceed $1,000,000 (in the case of the $1MM
Indemnification Deposit) or $300,000 (in the case of the Academy
Indemnification Deposit), from the appropriate Owner Parties as
contemplated by Article 12. Not less frequently than once per calendar
year, Buyer shall deliver a statement to the Sellers' Representative
setting forth in reasonable detail information reasonably necessary to
determine the size of any payments due under this Paragraph and the size of
the reserve for such items. In no event shall Buyer be obligated to pay
(but the reserve shall be credited as aforesaid) to any Owner or Seller
Entity any amount by reason of receipt of refunds or other positive
adjustments.
12. Section 6.9 is hereby amended by adding the following
prefatory language before the subsections thereof:
"The representations and warranties in Section 6.9.1 and
Section 6.9.3 are qualified in their entirety by the disclosure set
forth on Schedule 6.9.1."
13. Paragraphs (c), (h), (k), (l) and (p) of Section 6.17
are hereby deleted and are replaced in their entirety by the following:
"(c) Subject to Schedule 6.17(c), each Benefit
Plan conforms to, and its administration is in compliance with, all
applicable laws and regulations.
(h) No Benefit Plan is a multiemployer plan as
defined in Code section 414(f) or ERISA sections 3(37) or 4001(a)(3).
Except as set forth in Schedule 6.17 (h), no Benefit Plan is a
multiple employer plan within the meaning of Code section 413(c) or
ERISA sections 4063, 4064 or 4066.
(k) Except as set forth in Schedule 6.17(k), each
Benefit Plan which is intended to qualify under Code section 401(a)
or 403(a) so qualifies and its related trust is exempt from taxation
under Code section 501(a).
(l) Each Benefit Plan that is a "group health
plan" (as defined in ERISA section 607(1) or Code section 5000(b)(1))
has been operated at all times in compliance with the provisions of
COBRA and any applicable, similar state law.
(p) As of the Closing, none of the Seller Entities
Commonly Controlled Entity has incurred any liability or obligation
under the Worker Adjustment and Retraining Notification Act, as it
may be amended from time to time or any similar state law
(collectively, "WARN") and within the six-month period immediately
following the Closing, will not incur any such liability or
obligation if, during such six-month period, only terminations of
employment in the normal course of operations occur."
14. A new Section 8.18 is hereby added to the Acquisition
Agreement as follows:
8.18 Individual Account Plan. The ADS Group 401(k) Plan
sponsored by The ADS Group, Inc. and the Academy Manor Retirement &
Savings Plan (each a "Plan," together, the "Plans") as in effect on
the Closing Date shall remain in effect after the Closing Date, until
such time as Buyer decides to terminate either or both of said Plans,
for the benefit of the employees of the Business participating or
eligible to participate in each such Plan as of the Closing Date or
who will thereafter become eligible to participate upon satisfaction
of the applicable eligibility requirements. If Buyer decides to
terminate the ADS Group 401(k) Plan after the Closing Date, at a time
when any entity outside of Buyer's ERISA controlled group is a
participating employer therein, Buyer shall cooperate in the transfer
of sponsorship of the ADS Group 401(k) Plan to any such entity
outside of its ERISA controlled group desiring to continue such Plan.
The Buyer, the Owner Parties and the Seller Entities shall cooperate
and take any and all action, and cause each of their respective
Affiliates to take any and all action, as may be necessary or
appropriate to accomplish the purposes of the foregoing, including,
but not by way of limitation, the adoption of each such Plan as a
participating employer or plan sponsor effective as of the Closing
Date.
15. A new Section 8.19 is hereby added to the Acquisition
Agreement as follows:
8.19 Post-Closing Environmental Actions.
(a) As soon as is reasonably practicable after the
Closing Date, Buyer shall remove the underground storage tanks
located at Academy Manor Nursing Home and Prescott House Nursing Home
(the "USTs"), and shall undertake all actions, including, without
limitation, investigation and remediation of any Hazardous Substances
in the environment associated with the removal of the USTs,
reasonably necessary to obtain a written statement from either
(i) any Governmental Authority which has exercised jurisdiction over
the removal of the USTs or (ii) from a "Licensed Site Professional"
(as defined in 310 CMR 40.0006) to the effect that no further action
is required under applicable Environmental Laws with respect to the
USTs and any associated Hazardous Substances.
(b) As soon as is reasonably practicable after the
Closing Date, the Buyer shall undertake all actions, if any,
necessary to cause the disposal of the wastewater generated in
connection with floor cleaning and boiler blowdown at Palm Manor
Nursing Home and Westford Nursing and Rehabilitation Center to comply
with all applicable Environmental Laws.
(c) Buyer shall have the exclusive right to manage
and control all action undertaken pursuant to Sections 8.19(a) and
8.19(b); provided, however, that all such actions shall be reasonably
cost effective to accomplish the aims set forth by such Sections.
(d) Subject to the limitations set forth in
Sections 12.4 and 12.6, the Owner Parties shall indemnify and hold
harmless Buyer and its agents, representatives, employees, officers,
directors, stockholders, controlling persons and Affiliates
(collectively, the "Buyer Indemnities"), and shall reimburse the
Buyer Indemnities for any loss, liability, claim, damage, expense
(including, but not limited to, reasonable costs of investigation and
defense and reasonable attorneys' fees), whether or not involving a
third party claim (collectively, "Damages"), arising from or in
connection with (a) the actions undertaken pursuant to Sections
8.19(a) and 8.19(b) (provided, however, that the Owner Parties shall
not be obligated to indemnify the Buyers Indemnities to the extent
that such actions are not conducted in accordance with reasonable and
customary practices in order to accomplish the aims set forth by such
Sections), (b) the USTs and the presence of any "reportable
concentrations" (as defined in 310 CMR 40.0006) of Hazardous
Substances in the environment resulting from the presence, use or
operation of the USTs, (c) the presence of any "reportable
concentrations" (as defined in 310 CMR 40.0006) of Hazardous
Substances resulting from the discharge of any Hazardous Substances
to the septic systems at the Palm Manor Nursing Home or the Westford
Nursing and Rehabilitation Center, or (d) any environmental
conditions, noncompliance with environmental laws, or other events,
acts or conditions identified in (i) the Level I environmental site
assessments of the Operated Facilities prepared by Xxxxx Associates,
Inc. and provided to Sellers on or before the Closing Date or (ii)
any environmental assessments, reports or other documents concerning
the Facilities provided by Sellers to Buyer where, in the case of
either (i) or (ii), Buyer refrained from any further investigation,
it being understood that all such matters where Buyer refrained from
further investigation are listed in a letter between counsel to the
respective parties, dated the date hereof. Third party claims
subject to indemnification pursuant to this Section 8.19(d) shall be
subject to the procedures set forth in Section 12.5. Owner Parties'
obligation to indemnify Buyer pursuant to this Section 8.19(d) shall
not be limited or otherwise affected by Sellers' disclosure on
Schedule 6.9.1 to this Acquisition Agreement. Claims for
indemnification hereunder shall be effected under Article 12, it
being understood that claims with respect to Academy being made
solely against Xxxxx Xxxxxxxx as well as the related $300,000
Indemnification Holdback Amount.
(e) The Owner Parties shall have no obligation to
indemnify Buyer pursuant to Section 8.19(d) with respect to any claim
unless, on or before the fifth anniversary of the Closing Date, the
Sellers' Representative is given notice asserting such claim and
specifying its factual basis in reasonable detail to the extent then
known by Buyer.
(f) Buyer shall promptly provide to the Sellers'
Representative copies of all final scopes of work, sampling data,
notices to or from a Governmental Authority or third party, test
results and reports concerning the actions undertaken pursuant to
Section 8.19(a) and 8.19(b).
(g) To the extent that any rights of recovery,
contribution, reimbursement or indemnification exist against the
owner of the Palm Manor Nursing Home ("Recovery"), including, without
limitation, by reason of Section 12.4(b) below, pursuant to the lease
of said Facility or otherwise, Buyer and Sellers agree to use
reasonable efforts to cooperate to obtain such Recovery and any such
Recovery obtained will be paid to Buyer and applied against Owner
Parties' obligation to indemnify Buyer for the Damages to which the
Recovery relates or, to the extent Owner Parties have already made
cash payment to Buyer Indemnities pursuant to their indemnification
obligation with respect to the subject matter of the Recovery, the
Recovery will be paid to Owner Parties.
(h) To the extent that any of the Buyer Indemnities
obtain any recovery pursuant to an insurance policy with respect to
Damages for which such Buyer Indemnities have received
indemnification payments from any Owner Parties, such Buyer
Indemnities shall thereupon reimburse such Owner Parties on a dollar
for dollar basis. If this provision would have the effect of causing
any Buyer Indemnitee to lose any benefits under any such policy, this
Section 15(h) will to the extent necessary to prevent such loss be
deemed null and void. In no event shall any Buyer Indemnitee suffer
any net reduction in recovery by reason of this Section 15(h).
16. A new Section 8.20 is hereby added to the Acquisition
Agreement as follows:
"Subject to any required approval of the Lessor under the
Operating Lease, dated June 30, 1995, between Health Care Property
Investors and ADS Palm Chelmsford, Inc. (the "Palm and Reservoir
Lease"), Buyer shall have the right (the "Palm Option") to purchase
all shares of stock of ADS Reservoir Waltham, Inc. and ADS Palm
Chelmsford, Inc. for an aggregate purchase price of $100 for each
such corporation five days following delivery of written notice of
exercise of such right to the Sellers' Representative at any time
prior to January 1, 2016 (or one year after such later date to which
the Palm and Reservoir Lease may be extended). No person other than
Buyer who owns any stock of either such corporation may sell, dispose
of, transfer, pledge or encumber any of such stock, and neither such
corporation shall sell, transfer or encumber, or enter into any
agreement to sell, transfer or encumber, all or substantially all of
its assets, or enter into any agreement respecting, or effect, any
merger or consolidation, in each case at any time until the
expiration of the Palm Option. Until the expiration of the Palm
Option, neither corporation shall pay any dividend (other than
dividends payable solely in shares of stock, pro rata, to all
shareholders) or make any distribution. ADS Palm Chelmsford, Inc.
hereby agrees to assign to Buyer upon request all of ADS Palm
Chelmsford, Inc.'s rights under the Palm and Reservoir Lease, without
any recourse to, or representation or warranty from, ADS Palm
Chelmsford, Inc., whether or not such assignment breaches the Palm
and Reservoir Lease, provided that Buyer shall indemnify the
officers, directors and shareholders of ADS Palm Chelmsford, Inc. and
ADS Reservoir Waltham, Inc. in connection with such assignment."
17. The final sentence of Section 9 is hereby amended by
deleting the same in its entirety and substituting the following therefor:
"Buyer agrees to cause Parent to permit any Seller
receiving Parent Shares pursuant to this Agreement to include the
sale of Parent Shares acquired by them pursuant to this Agreement in
any registration statement effected by the Parent under the
Securities Act of 1933 later than one year following the Closing Date
on the same basis that the co-chief executive officers may include
shares of common stock of the Parent therein, unless the Parent shall
have received an opinion of counsel that such Seller may sell such
shares without registration under such Act."
18. A new Section 10.11 is hereby added to the Acquisition
Agreement as follows:
10.11 Post-Closing Option to Purchase Heritage.
(a) Buyer and Sellers acknowledge that the
Heritage Nursing Care Center ("Heritage") has been removed from the
Operated Facilities the ownership of which will be transferred
pursuant to this Agreement. Sellers who hold ownership interests in
Heritage ("Heritage Sellers") hereby grant and convey to Buyer an
option to either (i) purchase Heritage, pursuant to the terms of this
Agreement, including the application of all representations,
warranties and covenants contained in this Agreement to Heritage but
the liability of the Owner Parties for matters relating to Hazardous
Substance and all environmental issues associated with Heritage under
or with respect to this Agreement shall be limited to 10% of the
equity price for Heritage, and at a price and in the manner set forth
on Exhibit A to this Agreement or (ii) propose alternative terms for
the purchase or lease by Buyer of Heritage (the "Option").
(b) The Option may be exercised at any time
during the period which shall commence on the Closing Date and shall
expire 180 days thereafter (the "Option Period").
(c) Buyer shall exercise the Option at any
time during the Option Period by giving notice, pursuant to Section
15.7 hereof, of such exercise to Sellers' Representative.
(d) If Buyer exercises the Option in the
manner specified in Section 10.11(a)(ii), Buyer shall include with
its notice of the exercise of the Option a purchase or lease
agreement reflecting Buyer's alternative terms (the "Alternative
Purchase Agreement"), and within 30 days of receipt of Buyer's
notice, Sellers' Representative shall notify Buyer as to whether the
Heritage Sellers accept the sale or lease of Heritage on the terms
proposed by Buyer. If Sellers' Representative notifies Buyer that
the Heritage Sellers accept the sale or lease of Heritage on Buyer's
terms, Sellers and Buyer shall execute the Alternative Purchase
Agreement. If Sellers' Representative notifies Buyer that the
Heritage Sellers are not accepting the sale or lease of Heritage on
Buyer's terms (or if Sellers' Representative fails to so notify the
Buyer within such 30 day period ), the Option shall expire (except
that Buyer shall retain the Option under Section 10.11(a)(i) for an
additional 60 days) and Buyer shall have the right to terminate at
any time on 60 days notice the supply arrangement referred to in
Section 10.11(h).
(e) The Heritage Sellers shall not
voluntarily convey, sell, transfer, mortgage or encumber (except for
current mortgage lien and liens for real estate taxes, properly
assessed) Heritage, or any part thereof or interest therein, during
the Option Period without the prior consent of Buyer.
(f) If Buyer fails to exercise the Option in
the manner provided for herein during the Option Period, the Option
shall automatically terminate.
(g) The purchase or lease of Heritage shall
be effected not later than the thirtieth day (subject to extension
for health regulatory requirements) following (i) the exercise of the
Option in the manner set forth in Section 10.11(a)(i) or (ii) the
acceptance of the Alternative Purchase Agreement in accordance with
Section 10.11(d).
(h) Effective upon the Closing, the
management agreement between Heritage and ADS Management, Inc. shall
be terminated and all amounts owed thereunder shall be promptly
settled. Following the Closing, ADS Management, Inc. shall supply
Heritage with accounting, reimbursement, consulting, payroll and
other services (to be agreed upon) on an annual basis, for which
Heritage shall pay at prices to be agreed upon, but in no event shall
the amounts paid pursuant to such service arrangements, regardless of
the level used by Heritage, be less than 5% of revenues of Heritage.
Such arrangement shall be renewed on a mutually agreeable basis.
19. The following sentences are hereby added at the end of
Section 12.4(b) of the Acquisition Agreement:
"Any Damages incurred or suffered by Buyer in connection with
the presence, abatement, removal, disposal or replacement of
asbestos-containing building material shall not be subject to
indemnification pursuant to this Agreement, but such Damages shall
reduce the amount of the Sellers' Basket as if such Damages were
subject to indemnification under Section 12.2 of this Agreement."
20. The parties hereto acknowledge that Xxxxx Xxxxxxxx
heretofore was substituted for Xxxxx Xxxxxxxx of Xxxxxx under, among other
things, Section 12.7. Section 12.7 is amended by deleting therefrom the
final sentence and substituting therefor the following:
"Buyer shall deposit $500,000 of the Purchase Price relating to
Academy on the Closing Date, of which $300,000 shall secure the
indemnification obligations under the Agreement respecting Academy
and $200,000 shall secure potential liabilities arising from two
severance agreements referred to on Schedule 6.17(a), all as more
fully set forth in the Escrow Agreement. Buyer shall be entitled to
be indemnified dollar for dollar without regard to any basket for any
payments that are required to be made pursuant to such severance
agreements"
21. In view of the fact that the schedules to the Acquisition
Agreement were completed at the Closing, no person shall have any liability
by reason of the fact that any representation or warranty was untrue as of
anytime prior to the Closing, so long as the same shall be true and correct
as of the Closing.
22. The description of Xxxx Xxxxxxxx'x interest in certain
assisted living ventures and other matters annexed hereto as Exhibit B is
true and correct in all material respects and does not omit any fact
necessary to make the statements therein truthful and accurate as of the
date hereof. ADS and SSB and certain other Owner Parties have interests in
three assisted living development projects known as Dartmouth, Danvers and
Hingham. At Closing, all rights and interests of such Persons in such
projects, as well as all other nursing facilities or projects and assisted
living projects other than those listed on Schedule 6.23 of the Acquisition
Agreement, are being assigned to Buyer (or its affiliated designee),
subject to third party consents and Buyer shall become responsible for all
development costs and capital contributions. In addition, at or after the
Closing (upon receipt and verification of backup), Buyer shall reimburse
each such Person for any unreimbursed expenditures by such Persons on all
such projects, by paying to Sellers' Representative for their accounts the
amounts set forth on Exhibit C. The Sellers represent that none of such
expenses has been paid by any entity being acquired pursuant to the
Acquisition Agreement. ADS and SSB agree to use their best efforts to
obtain any necessary third-party consents to such transfer within 90 days
following the Closing, ADS and SSB acknowledge and agree that such
interests will be permitted under Section 10.9 of the Acquisition Agreement
only until the 90th day following the Closing.
23. The Sellers' Representative has heretofore provided to
Buyer a copy of an agreement respecting the termination of employment of
Xxxxxx Grape. The Buyer confirms that the severance of Mr. Grape under the
terms set forth in such agreement will not constitute a breach of the
Acquisition Agreement. Sellers' Representative agrees that it is the
intention of the parties that, except for the obligation of the Buyer to
pay $95,000 to Mr. Grape, the financial terms of such letter agreement
shall not adversely affect Buyer and that any payments to Mr. Grape,
regardless of whether made prior or after the Closing, will be deemed to be
made prior to the Closing for purposes of preparation of the Closing
Balance Sheet and any other appropriate adjustment shall be made such that
any and all costs relating to such severance or arising out of such
agreement will not be borne directly or indirectly by the Buyer.
IN WITNESS WHEREOF, the parties hereto have duly executed
and delivered this Amendment No. 4 as of the day and year first above
written.
ADS/MULTICARE, INC.
By: XXXXXXXX X. XXXXXXX
Name: Xxxxxxxx X. Xxxxxxx
Title: Vice-President
ENCARE OF MASSACHUSETTS, INC.
By: XXXXXX X. XXXXXX
Name: Xxxxxx X. Xxxxxx
Title:
By: XXXX X. XXXXXXXX
Name: Xxxx X. Xxxxxxxx
Title:
Exhibit A
Arcadia Associates (General Partnership)
ASL, Inc. d/b/a Heritage Nursing Care Center (S Corporation)
A. Each partner of Arcadia Associates (i.e., Xxxx Xxxxxxxx
(12.5%), Xxxxx Xxxxxxxx (12.5%), Xxx Xxxxxxxx (12.5%), Xxxxx
Xxxxxxxx (12.5%), Xxxx Xxxxx (25%), X. Xxxxx (6.25%), G. Jasne
(6.25%), X. Xxxxxxx (6.25%) and X. Xxxxx (6.25%)) shall
transfer their partnership interests in Arcadia Associates to
SELCO.
B. SELCO shall pay cash consideration to each partner of Arcadia
Associates, as follows:
Xxxx Xxxxxxxx $ 136,500
Xxxxx Xxxxxxxx $ 136,500
Xxx Xxxxxxxx $ 136,500
Xxxxx Xxxxxxxx $ 136,500
Xxxx Xxxxx $ 273,000
X. Xxxxx $ 68,250
G. Jasne $ 68,250
X. Xxxxxxx $ 68,250
X. Xxxxx $ 68,250
TOTAL $ 1,092,000
C. The trustee of Arcadia Realty Trust will be changed to a person
designated by SELCO.
D. SELCO shall strip the real estate assets out of Arcadia Realty
Trust/Arcadia Associates.
E. SELCO shall lease the real estate assets to ASL, Inc.
F. Each stockholder of ASL, Inc., (i.e., Xxxx Xxxxxxxx (12.5%),
Xxxxx Xxxxxxxx (12.5%), Xxx Xxxxxxxx (12.5%), Xxxxx Xxxxxxxx
(12.5%), Xxxx Xxxxx (25%), X. Xxxxx (6.25%), G. Jasne (6.25%),
X. Xxxxxxx (6.25%) and X. Xxxxx (6.25%)) shall sell their stock
to Buyer.
G. Buyer shall pay cash consideration to each stockholder of ASL,
Inc. as follows:
Xxxx Xxxxxxxx $ 125,000
Xxxxx Xxxxxxxx $ 125,000
Xxx Xxxxxxxx $ 125,000
Xxxxx Xxxxxxxx $ 125,000
Xxxx Xxxxx $ 250,000
X. Xxxxx $ 62,500
G. Jasne $ 62,500
X. Xxxxxxx $ 62,500
X. Xxxxx $ 62,500
TOTAL $ 1,000,000
H. Management Agreement will remain between ADS Management, Inc.
and ASL, Inc. License is held by ASL, Inc.
I. Consents required:
(i) The consent of each of Xxxx X. Xxxxx, Xxxxxxxxx Xxxxx,
Xxxx Xxxxx, Xxxxxx X. Xxxxxxx and Xxxxxxx Xxxxx is
required for the transfer of each of the partnership
interests of all of the other partners in Arcadia
Associates pursuant to the Arcadia Associates partnership
agreement.
(ii) The board of directors of ASL, Inc. must waive
restrictions on stock transfer pursuant to the articles
of incorporation of ASL, Inc.
(iii) Loan Agreement dated 11/30/93 between ASL, Inc. and Fleet
Bank to be repaid. Release liens and guaranties made by
Xxxxx Xxxxxxxx, Xxxx Xxxxxxxx, Xxxx Xxxxx, Xxx Xxxxxxxx
and Xxxxx Xxxxxxxx.
Exhibit B
Operating Assisted Living Facilities.
ADS Senior Housing, Inc. (a company being acquired by
Multicare) currently manages eight assisted living facilities. Xxxx
Xxxxxxxx has ownership interests in five of the eight: (i) Heritage at
North Andover; (ii) Cabot Park Village; (iii) Heritage at the Falls; (iv)
Heritage at Cleveland Circle; and (v) Heritage at Xxxxxx Court. Four of
the five facilities (all except North Andover) are essentially joint
ventures between an entity owned in substantially equivalent portions by
Xxxx, Xxxxx Xxxxxx and three of Alan's brothers on one side and National
Development of New England ("NDNE"), an independent developer, on the other
side. The ADS entity and NDNE have substantially equivalent general
partner and limited partner interests in each facility. Three of the four
facilities (all except Cabot) also include third party investors known as
"investor limited partners," who acquired their interests in equity
syndications. These investor limited partners own limited partnership
interests ranging generally from 45%-55% of each entity. Xxxx serves as
president of each ADS entity. In each instance, the ADS entity manages the
facility and earns development and management fees, while NDNE develops and
constructs the property, earning development and construction fees.
The fifth facility, North Andover, is owned in five tranches of
20% each by Xxxx, Xxxxx and each of Alan's three brothers.
Information setting forth more precisely the investment
interests is attached.
Assisted Living Development Projects.
Xxxx Xxxxxxxx, Xxxxx Xxxxxx and three of Alan's brothers have
ownership interests in three assisted living development projects known as
Dartmouth, Danvers and Hingham. These are covered by Amendment No. 4.
Exhibit C
Schedule of amounts to be paid at or after Closing re Assisted Living (upon
receipt and verification of back-up)
ADS Senior Housing
Danvers Assisted Living $ 219,507
Hingham Assisted Living $ 154,176
Worcester Assisted Living $ 105,302
Southington Assisted Living $ 11,574
Dartmouth Assisted Living $ 211,624
TOTAL ADS SENIOR HOUSING $ 702,183
ADS Management
Southeast Nursing Home $ 550,000
TOTAL ADS MANAGEMENT $ 550,000
Total ADS Group
Total ADS Senior Housing $ 702,183
Total ADS Management $ 550,000
TOTAL ADS GROUP $ 1,252,183
