[CONFORMED COPY]
THE LIMITED PARTNERSHIP INTERESTS EVIDENCED BY THIS AGREEMENT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR UNDER APPLICABLE STATE SECURITIES LAWS (THE "STATE ACTS"), AND MAY BE OFFERED
OR SOLD ONLY (1) UPON REGISTRATION OF THE LIMITED PARTNERSHIP INTERESTS UNDER
THE SECURITIES ACT AND THE STATE ACTS OR PURSUANT TO AN EXEMPTION THEREFROM, AND
(2) AFTER COMPLIANCE WITH ALL RESTRICTIONS ON TRANSFER OF SUCH LIMITED
PARTNERSHIP INTERESTS IMPOSED BY THIS AGREEMENT.
* * *
PLAN OF ASSET TRANSFER AND CONTRIBUTION AGREEMENT
THIS PLAN OF ASSET TRANSFER AND CONTRIBUTION AGREEMENT (this
"Agreement") is made and entered into as of September 25, 1997, by and between
ELDERTRUST OPERATING LIMITED PARTNERSHIP, a Delaware limited partnership
("Transferee"), and each of the parties listed on Schedule 1.1 attached hereto
who executes a Partner Consent (hereinafter defined) agreeing to become a party
to this Agreement (each a "Contributor" and collectively, "Contributors").
WHEREAS, Contributors each are partners in Salisbury Medical
Office Building General Partnership, a Pennsylvania general partnership (the
"Partnership"); each Contributor owns the interests in the Partnership set forth
next to such Contributor's name on Schedule 1.2 hereto (collectively, the
"Interests"); and
WHEREAS, Contributors desire to contribute the Interests to
Transferee on the terms and conditions set forth herein.
WHEREAS, the Partnership owns and operates an office building
known as Salisbury Medical Office Building, which office building consists of
the real property described in Exhibit A hereto (the "Real Property"), the
improvements thereon and all other real and personal property associated
therewith (together with the Real Property, the "Property"), all of which other
real and personal property is described in Exhibit B hereto;
NOW, THEREFORE, in consideration of the foregoing and the
mutual promises and covenants set forth herein, Transferee and Contributors
hereby agree as follows:
ARTICLE I
THE CONTRIBUTION
1.1 Contribution and Acquisition of Contributed Property.
Subject to the terms and conditions set forth herein, Contributors agree to
contribute to Transferee and Transferee agrees to acquire and accept from
Contributors, the Interests, in exchange for units of limited partnership
interest in Transferee (the "Units"), as set forth in Article II hereof, in a
transaction intended to qualify for nonrecognition of gain to Contributors
pursuant to Section 721 of the Internal Revenue Code of 1986, as amended (the
"Code") (the "Contribution").
1.2. Closing. The closing of the transactions contemplated by
this Agreement (the "Closing") shall occur simultaneously with the closing of
the initial public offering (the "IPO") of shares of beneficial interest in
ElderTrust, a Maryland real estate investment trust (the "REIT"); provided, that
if the IPO has not occurred on or before March 31, 1998, this Agreement shall
terminate and none of the parties hereto shall have any further liability to any
other party hereto. The Closing shall occur simultaneously with the delivery of
the following documents:
(a) the Registration Rights Agreement, substantially in the
form attached hereto as Exhibit C, executed by Transferee and Contributors;
(b) the Second Amended and Restated Agreement of Limited
Partnership of Transferee, substantially in the form attached hereto as Exhibit
D (the "Operating Partnership Agreement");
(c) the documents specified in Section 8.1 and Section 8.2
hereof; and
(d) such other documents as the parties may mutually agree.
ARTICLE II
EXCHANGE AMOUNT
2.1. Exchange Amount.
(a) Units Delivered at Closing. In exchange for the
contribution of the Interests and upon execution and delivery of the Operating
Partnership Agreement by Contributors, Contributors collectively shall receive,
at the Closing, an aggregate number of Units equal to (i) $417,200.00 divided by
(ii) the midpoint of the price range for shares of beneficial interest in the
REIT as set forth in the REIT's final preliminary prospectus (the "Final
Preliminary Prospectus") related to the IPO, rounded up to the nearest whole
Unit. The rights of holders of the Units as of the Closing will be as set forth
in the Operating Partnership Agreement.
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(b) Distribution of Units. At the Closing, Transferee shall
issue the Units (as determined pursuant to Section 2.1(a) above) to
Contributors, each Contributor to receive a number of Units equal to (i) the
total number of Units issued to all Contributors multiplied by (ii) a fraction,
the numerator of which is the Interest of such Contributor as set forth on
Schedule 1.2 hereto, and the denominator of which is the sum of all the
Interests (including the Interest of such Contributor) as set forth on Schedule
1.2 hereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF TRANSFEREE
Transferee hereby represents and warrants to Contributors as
follows:
3.1 Organization, Power and Authority, and Qualification.
Transferee is a limited partnership duly organized, validly existing and in good
standing under the laws of the State of Delaware. Transferee has the requisite
power and authority to carry on its respective business as it is now being
conducted and to engage in the Contribution. Transferee has made available to
Contributors complete and correct copies of the governing documents of
Transferee with all amendments as in effect on the date of this Agreement.
Transferee is qualified to do business and is in good standing in each
jurisdiction where the character of its property owned or leased or the nature
of its activities makes such qualification necessary, except where the failure
to be so qualified and in good standing would not have a material adverse effect
on the business or financial condition of Transferee.
3.2 Authority Relative to this Agreement. All action of
Transferee necessary to authorize the execution, delivery and performance of
this Agreement by Transferee has been taken, and no other proceedings on the
part of Transferee are necessary to authorize the execution and delivery of this
Agreement by Transferee and the consummation by Transferee of the Contribution.
Neither the execution and delivery of this Agreement by
Transferee nor the consummation by Transferee of the Contribution nor compliance
by Transferee with any of the provisions hereof will (i) conflict with or result
in any breach of any provisions of the partnership agreement of Transferee, (ii)
result in a violation or breach of, or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of termination,
cancellation or acceleration) under any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, lease, license, contract, agreement or
other instrument or obligation to which Transferee is a party or by which it or
any of its properties or assets may be bound, or (iii) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to Transferee or any
of the properties or assets of Transferee.
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3.3 Binding Obligation. This Agreement has been duly and
validly executed and delivered by Transferee to Contributors and constitutes a
valid and binding agreement of Transferee, enforceable against Transferee in
accordance with its terms, except that such enforcement may be subject to
bankruptcy, conservatorship, receivership, insolvency, moratorium or similar
laws affecting creditors' rights generally or the rights of creditors of limited
partnerships and to general principles of equity.
3.4 Brokers. Transferee has not employed any broker or finder,
or incurred any liability therefor, in connection with the Contribution
contemplated by this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF EACH CONTRIBUTOR
Contributors hereby represent and warrant to Transferee as
follows:
4.1 Organization and Qualification. The Partnership is a
general partnership duly organized and validly existing under the laws of the
Commonwealth of Pennsylvania. The Partnership has the requisite power and
authority to carry on its business as it is now being conducted. Contributors
have made available to Transferee complete and correct copies of the
organizational documents of the Partnership, with all amendments as in effect on
the date of this Agreement. The Partnership is qualified to do business in each
jurisdiction where the character of its property owned or leased or the nature
of its activities makes such qualification necessary, except where the failure
to be so qualified and in good standing would not have a material adverse effect
on the business or financial condition of the Partnership or on the
Contribution. None of the Contributors is a "foreign person" under Section 1445
of the Internal Revenue Code of 1986, as amended, and the regulations
promulgated thereunder.
4.2 Authority Relative to this Agreement. All action necessary
to authorize the execution, delivery and performance of this Agreement by
Contributors has been taken, and no other proceedings are necessary to authorize
the execution and delivery by Contributors of this Agreement and the
consummation by Contributors of the Contribution.
Neither the execution and delivery of this Agreement by
Contributors, nor the consummation by Contributors of the Contribution nor
compliance by Contributors with any of the provisions hereof will (i) conflict
with or result in any breach of any provisions of the partnership agreement of
the Partnership, (ii) result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation or acceleration) under any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, lease, license,
permit, contract, agreement, easement, restriction or other instrument or
obligation to which Contributors or the Partnership is a party or by which
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Contributors or the Partnership or the Property may be bound, or (iii) violate
any order, writ, injunction, decree, statute, rule or regulation applicable to
Contributors, the Partnership or the Property, except in the case of (ii) or
(iii) for violations, breaches, or defaults (A) which would not in the aggregate
have a material adverse effect on the business or financial condition of
Contributors, the Partnership, the Contribution or the Property or (B) for which
waivers or consents have been obtained or, as listed on Schedule 4.2, will be
obtained prior to the date of the Closing.
4.3 Binding Obligation. This Agreement has been duly and
validly executed and delivered by Contributors to Transferee and constitutes a
valid and binding agreement of each Contributor, enforceable against each
Contributor in accordance with its terms, except that such enforcement may be
subject to bankruptcy, conservatorship, receivership, insolvency, moratorium or
similar laws affecting creditors' rights generally and to general principles of
equity.
4.4 Brokers. Contributors have not employed any broker or
finder, or incurred any liability therefor, in connection with the Contribution
contemplated by this Agreement.
4.5 Title to Assets. Each Contributor has good and valid title
to the Interest owned by him, free and clear of any Liens (as hereinafter
defined). The Partnership has good and valid title to the Personal Property. To
Contributor's knowledge, the Property is not subject to any imperfections in
title, easements, liens, mortgages, encumbrances, pledges, claims, charges,
options, defects, preferential purchase rights or other encumbrances
(collectively referred to herein as "Liens") except for the following
("Permitted Liens"):
(i) Liens for real property taxes and assessments or for
fire dues, library dues or similar assessments not
yet delinquent;
(ii) Liens that are not material in character, amount, or
extent and do not materially detract from the value,
or interfere with the use of, the Partnership's
assets subject thereto or affected thereby or
otherwise materially impair the business operations
being conducted or proposed to be conducted thereon;
(iii) the Mortgage Debt (as hereinafter defined); and
(iv) Liens shown on Schedule 4.5 hereto.
4.6 Debt. The Property is encumbered by the mortgage
indebtedness described on Schedule 4.6 hereto (the "Mortgage Debt"). Except for
the Mortgage Debt, the Partnership has no material indebtedness other than
indebtedness incurred by it in its ordinary course of business. To Contributors'
knowledge, there exists no default, or event which with the passage of time or
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notice or both would constitute a default with respect to the Mortgage Debt or
any other debt of the Partnership that has not been cured or that would have a
material adverse effect on the business or financial condition of the
Partnership, the Contribution or the Property.
4.7 Financial Statements. The financial statements of the
Partnership attached as Schedule 4.7 hereto (the "Financial Statements") have
been prepared in accordance with generally accepted accounting principles
applied on a consistent basis throughout the periods specified. The balance
sheets in the Financial Statements fairly present the financial condition of the
Partnership as of the dates shown, and the income statements in the Financial
Statements fairly present the results of operations for the periods indicated.
4.8 Financial Condition. Since June 30, 1997, there has been
no material adverse change in the business or financial condition of the
Partnership.
4.9 Leases. Except as set forth on Schedule 4.9 hereto, the
Partnership has not entered into any leases, tenancies or other rights of
occupancy in effect on the date hereof with respect to the Property. Each of the
leases referenced in Schedule 4.9 (the "Leases") has been delivered to or made
available to Transferee and is presently unamended (or with respect to each such
lease that has been amended, all amendments thereto have been delivered or made
available to Transferee) and, to Contributors' knowledge, are in full force and
effect without material default.
4.10 Contracts. The Partnership is not a party to and none of
Contributors or the Partnership is bound by any contracts or other
understandings, written or oral, that relate to the Interests or the Property,
except for contracts or understandings that are not material to the business and
operations of the Property (collectively, the "Contracts," which term shall not
be construed to include any leases). Neither Contributors nor the Partnership,
as applicable, nor, to Contributors' knowledge, any other party thereto has
breached or defaulted under the terms of any Contract, except for such breaches
or defaults that would not have a material adverse effect on the business or
operations of the Partnership or the Property.
4.11 Permits. To the knowledge of Contributors, the
Partnership has all such franchises, certificates, licenses, permits and other
authorizations from government political subdivisions, regulatory authorities or
any other person or entity (collectively "Permits") as are necessary for the
ownership, use, operation and licensing of the Property as it is currently being
used, except where the failure to possess such Permits would not have a material
adverse effect on the business or financial condition of the Partnership or the
Property, and to Contributors' knowledge, the Partnership is not in violation of
any Permit in any material respect and all Permits of the Partnership are valid
and in full force and effect.
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4.12. Litigation. There are no claims, actions, suits,
proceedings or investigations pending or, to Contributors' knowledge, threatened
against Contributors or the Partnership, or any properties or rights of
Contributors or the Partnership, that would have a material adverse effect on
the business or financial condition of Contributors or the Partnership, the
Contribution or the Property before any court or administrative, governmental or
regulatory authority or body, domestic or foreign. None of Contributors, the
Partnership, the Interests or the Property is subject to any order, judgment,
injunction or decree of any court, tribunal or other governmental authority
(other than generally applicable laws, rules and regulations) that would have a
material adverse effect on the business or financial condition of the
Partnership, the Contribution or the Property.
4.13 Compliance with Laws. To Contributors' knowledge, the
Partnership has not received any written or other actual notice of any material
violation of any applicable zoning regulation or ordinance, or of any
employment, environmental, or other regulatory law, order, regulation or
requirement, including applicable subdivision laws, relating to the Property or
the business or operations thereon, which remains uncured, and, to Contributors'
knowledge, there are no such violations which, individually or in the aggregate,
would have a material adverse effect on the business or financial condition of
the Partnership or the Property.
4.14 Taxes. Except for such matters as in the aggregate shall
not result in a material adverse effect on the business or financial condition
of the Partnership, (i) all tax or information returns required to be filed on
or before the date hereof by or on behalf of the Partnership have been filed
through the date hereof or will be filed on or before the date of the Closing in
accordance with all applicable laws, (ii) there is no action, suit or proceeding
pending against, or with respect to, the Partnership or the Property in respect
of any tax nor is any claim for additional tax asserted by any such authority,
and (iii) all taxes (including related penalties, interest and additional
amounts) imposed upon the Partnership and required to be reported on a return
required to be filed (without regard to any applicable extensions) on or before
the date hereof have been paid or will be paid prior to the delinquency thereof.
4.15 Insurance. To Contributors' knowledge, each of the
insurance policies with respect to the Property is in full force and effect and
all premiums due and payable thereunder have been fully paid when due. To
Contributors' knowledge, the Partnership has not received from any insurance
company notice of any material defects or deficiencies affecting the
insurability of the Property or notices of cancellation or intent to cancel any
such insurance.
4.16 Employees. The Partnership has no employees.
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4.17 Utilities. To the knowledge of Contributors, usable
public sanitary and storm sewers, public water, and gas and electrical utilities
(collectively, the "Public Utilities"), of adequate capacity for the operation
of the Property, are installed in, and are duly connected to, the Property and
can be used without any charge except the normal and usual metered charges
imposed for such Public Utilities. No amounts due and owing with respect to the
Property in connection with utilities, insurance, assessments or other charges
customarily prorated in real estate transactions have been outstanding more than
30 days.
4.18 Environmental. For the purpose of this Section 4.18, the
term "Hazardous Substances" shall mean substances defined as a "hazardous
waste," "hazardous substance," or "toxic substance" under any Environmental
Laws, including, without limitation, oil, petroleum, or any petroleum-derived
substance or waste, asbestos or asbestos-containing materials, PCBs, pesticides,
explosives, radioactive materials, dioxins, urea formaldehyde insulation or any
constituent of any such substance, pollutant or waste. As used herein,
"Environmental Laws" shall include, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act, as amended, 42 U.S.C.
ss. 9601, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. ss.
6901, et seq., the Clean Air Act, 42 U.S.C. ss. 7401, et seq., the Clean Water
Act, 33 U.S.C. ss. 1251, et seq., the Toxic Substance Control Act, 15 U.S.C. ss.
2601, et seq. and the Occupational Safety and Health Act, 29 U.S.C. ss. 651, et
seq., as any of the preceding have been amended prior to the date of the
Closing, and any other federal, state or local law, ordinance, regulation, rule,
order, decision or permit relating to the protection of human health from
environmental effects of Hazardous Substances and which are applicable to the
Property.
To Contributors' knowledge, and except as may be revealed in
the Phase I Environmental Report prepared for the Property by Xxx X. Xxxxxx,
Inc., dated July, 1997, (i) no Hazardous Substances are present in, on or under
the Property that require remediation under applicable law or would have a
material adverse affect on the condition (financial or otherwise), earnings,
assets, business affairs or business prospects of the Property, the Partnership
or the Contribution, (ii) no liability under or violation of any Environmental
Laws or condition that could give rise to such liability or violation exists
with respect to the Property, except for liabilities that would not have a
material adverse effect on the business or financial condition of the
Partnership or the Property, and (iii) the Partnership has not caused or allowed
any discharge or disposal of any Hazardous Substances at the Property except in
compliance with Environmental Laws. The Partnership has not received any written
notice from any governmental agency or instrumentality having jurisdiction
thereof of any violation of any Environmental Laws which remains uncured or
unremediated.
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4.19 [INTENTIONALLY DELETED]
4.20 Pending Assessments and Eminent Domain. Contributors have
no knowledge of, and neither Contributors nor the Partnership have received
notice of, any pending proceeding for the imposition of any special assessment,
or the formation of a special assessment district, or for a condemnation
proceeding which would materially affect in any manner any portion of the
Property.
4.21 Securities Matters.
(a) Each Contributor acknowledges that Transferee intends the
offer and issuance of the Units to be exempt from registration under the
Securities Act and applicable state securities laws by virtue of (i) the status
of each Contributor as an accredited investor and (ii) Regulation D promulgated
under Section 4(2) of the Securities Act ("Regulation D"). Transferee will rely
in part upon the representations and warranties made by Contributors in making a
determination that the offer and issuance of the Units qualify for exemption
under Rule 506 of Regulation D as an offer and sale only to accredited
investors.
(b) Each Contributor is an Accredited Investor.
(c) Each Contributor will acquire the Units solely for his,
her or its own account, and not with a view to or for sale in connection with
any "distribution" thereof within the meaning of the Securities Act.
(d) Each Contributor has sufficient knowledge and experience
in financial, tax and business matters to enable him to evaluate the merits and
risks of investment in the Units. Each Contributor has the ability to bear the
economic risk of acquiring the Units. Each Contributor acknowledges that (i) the
transactions contemplated by this Agreement involve complex tax consequences for
each Contributor, and each Contributor is relying solely on the advice of his,
her or its own tax advisors in evaluating such consequences, (ii) Transferee has
not made (or shall be deemed to have made) any representations or warranties as
to the tax consequences of such transaction to Contributors, and (iii) any
references in this Agreement to the intended tax effect of the Contribution and
the other matters described herein shall not be deemed to imply any
representation by Transferee as to a particular tax effect that may be obtained
by Contributors. Contributors remain solely responsible for all tax matters
relating to Contributors.
(e) Each Contributor has received and reviewed materials
containing certain information regarding Transferee, the REIT and the IPO prior
to executing this Agreement. Each Contributor has been supplied with, or had
access to, information to which a reasonable investor would attach significance
in making an investment decision to acquire the Units and any other information
any Contributor has requested. Each Contributor has had an opportunity to ask
questions of and receive information and answers from Transferee concerning
Transferee, the REIT and the Units and to assess and evaluate any information
supplied to Contributors by Transferee.
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(f) Each Contributor acknowledges that the Units are not
registered under the Securities Act or any state securities laws and cannot be
resold without registration thereunder or exemption therefrom. Each Contributor
agrees that he, she or it will not transfer all or any portion of the Units for
at least one (1) year after the date of the Closing, and thereafter only if such
transfer has been registered or is exempt from registration under the Securities
Act and any applicable state securities laws.
4.22 [INTENTIONALLY DELETED]
4.23 Governmental Proceedings. There is no governmental action
or governmental proceeding (zoning or otherwise) or governmental investigation
pending or, to Contributors' knowledge, threatened against or relating to the
Property or the transactions contemplated by this Agreement.
4.24 No Agreements. Except as set forth on Schedule 4.24,
other than the Leases, the Property is not subject to any outstanding agreement
of sale or lease, option to purchase or other right of any third party to
acquire any interest therein.
ARTICLE V
COVENANTS AND AGREEMENTS OF CONTRIBUTORS
Contributors hereby covenant and agree with Transferee that
prior to the date of the Closing:
5.1 Actions Affecting Assets. Except in the ordinary course of
business, Contributors shall not permit the Partnership to sell, assign, pledge,
transfer or encumber, or enter into any other material consent, commitment,
understanding or other agreement, or incur any material obligation or liability
(contingent or absolute) with respect to the Property or merge or consolidate
with or into any other entity or enter into any agreements relating thereto
without Transferee's prior consent.
5.2 Access to Property and Records. Upon reasonable notice and
during regular business hours, Contributors shall give Transferee and
Transferee's authorized representatives full access to the Partnership's
personnel and all properties, documents, contracts, facilities, books, equipment
and records of the Partnership, relating to the Property to conduct its
investigations, including, without limitation, surveys, site analyses, soil
tests, engineering studies, and other investigations.
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5.3 Permits. Contributors shall cause the Partnership to
maintain all Permits in full force and effect, and will file timely all reports,
statements, renewal applications and other filings, and will pay timely all fees
and charges in connection therewith that are required to keep the Permits in
full force and effect.
5.4 Contracts. Contributors will not permit the Partnership to
enter into any new Contracts with respect to the Property except in the ordinary
course of the business of the operation of the Property.
5.5 Insurance. Contributors shall cause the Partnership to
maintain in full force and effect substantially the same public liability and
casualty insurance coverage now in effect with respect to the Property.
5.6 Taxes and Assessments. Contributors shall cause the
Partnership to pay or discharge before delinquent all tax liabilities and
obligations, including without limitation those for federal, state or local
income, property, unemployment, withholding, sales, transfer, stamp,
documentary, use and other taxes.
5.7 Binding Commitments. Contributors shall not make nor
permit the Partnership to make any commitments or representations to any
applicable government authorities, any adjoining or surrounding property owners,
any civic association, any utility or any other similar person or entity that
would in any manner be binding upon Transferee or the Property without
Transferee's prior consent, except such agreements that would not have a
material adverse effect on the Property.
5.8 Compliance with Law. The operations of the Partnership and
the Property will be conducted in compliance with all applicable laws,
including, without limitation, all such laws regulations, orders and
requirements promulgated by any governmental authority or relating to
environmental protection, fire, zoning and building and occupational safety
matters, except for noncompliance that individually or in the aggregate would
not and, insofar as may reasonably be foreseen, in the future will not, have a
material adverse effect on the business or operations of the Partnership or the
Property.
5.9 Operation of Property. Contributors shall cause the
Partnership to operate and maintain the Property in the same manner as the
Partnership has heretofore operated the Property.
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ARTICLE VI
CONDITIONS TO CONSUMMATION OF
CONTRIBUTION BY TRANSFEREE
The obligation of Transferee to consummate the Contribution
shall be subject to fulfillment (or waiver) at or prior to the date of the
Closing of the following conditions:
6.1 Representations, Warranties and Covenants. The
representations, warranties and covenants made by Contributors in this Agreement
or in any document delivered by any Contributors pursuant to this Agreement
shall be true and correct in all material respects when made and on and as of
the date of the Closing as though such representations, warranties and covenants
were made on and as of such date.
6.2 No Material Adverse Change. There shall have been no
material adverse change in the value or condition of the Property or the
Partnership since the date hereof, except for changes contemplated by this
Agreement and changes in the ordinary course of business which do not have a
material adverse effect on the business or financial condition of the
Contribution, the Partnership or the Property.
6.3 Title Insurance. Commonwealth Land Title Insurance Company
(the "Title Company") shall have issued to Transferee an ALTA owners title
insurance policy effective as of the date of the Closing or an unconditional
commitment therefor insuring fee simple title to the Property to be vested in
Transferee in the amount of at least $625,800, subject to no exceptions other
than Permitted Liens (other than the Mortgage Debt), with such endorsements and
otherwise in form acceptable to Transferee in its sole and absolute discretion.
6.4 No Order or Injunction. The consummation of the
Contribution shall not have been restrained, enjoined or prohibited by any order
or injunction of any court or governmental authority of competent jurisdiction
nor shall there be any pending or threatened condemnation proceeding with
respect to the Property or any portion thereof.
6.5 Consents. All consents listed on Schedule 4.2 or otherwise
necessary for the execution and delivery of this Agreement by Contributor and
the consummation of the Contribution by Contributor have been obtained,
including, without limitation, the execution by each Contributor on or before
the date hereof of a consent form pursuant to which each such Contributor has
executed this Agreement and consented to each matter set forth herein (each, a
"Partner Consent").
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6.6 Instruments of Conveyance. The Contributors shall have
delivered the instruments evidencing conveyance of the Interests referred to in
Section 8.1.
6.7 IPO Closing. The IPO shall close simultaneously with the
Contribution.
6.8 Simultaneous Closing. The Contribution shall close
simultaneously with the closing under the agreements listed on Schedule 6.8
hereof.
ARTICLE VII
CONDITIONS TO CONSUMMATION
OF TRANSACTION BY CONTRIBUTORS
The obligation of Contributors to consummate the Contribution
shall be subject to fulfillment (or waiver) at or prior to the date of the
Closing of the following conditions:
7.1 Representations, Warranties and Covenants. The
representations, warranties and covenants made by Transferee in this Agreement
or in any document delivered by Transferee pursuant to this Agreement shall be
true and correct in all material respects when made and on and as of the date of
the Closing as though such representations, warranties and covenants were made
on and as of such date.
7.2 Consents. All consents necessary for the consummation of
the Contribution by Transferee shall have been obtained.
7.3 IPO Closing. The IPO shall close simultaneously with the
Contribution.
7.4 Simultaneous Closing. The Contribution shall close
simultaneously with the closings under the agreements listed on Schedule 6.8
hereof.
ARTICLE VIII
THE CLOSING
Subject to the terms and conditions of this Agreement, the
Closing shall take place promptly after satisfaction or waiver of the conditions
set forth in Articles VI and VII hereof.
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8.1 Closing Deliveries by Contributors. At Closing, each
Contributor shall deliver (or cause to be delivered pursuant to the Power of
Attorney referred to in Section 11.8) the following:
(a) a written document of conveyance contributing to
Transferee title to the Interests, free and clear of any
adverse claim or interest;
(b) a certification by each Contributor, duly
executed by such Contributor under penalty of perjury, setting
forth such Contributor's address and federal tax
identification number and certifying that such Transferor is
not a "foreign person" under Section 1445 (as may be amended)
of the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder;
(c) such documents and certificates as Transferee may
require to establish the authority of the parties executing
any documents in connection with the Contribution including,
in the case of any Contributor that is a corporation,
partnership, limited liability company or other similar entity
(other than a trust or estate), an opinion of counsel,
reasonably satisfactory to Transferee, as to the due execution
and delivery of such documents;
(d) such consents as are contemplated by Section 6.5
hereof;
(e) a certificate of Contributors certifying that the
representations and warranties of Contributors set forth
herein are true and correct in all material respects as of the
Closing Date; and
(f) such other documents and instruments as
Transferee and Contributors agree are necessary or
appropriate.
8.2 Closing Deliveries by Transferee. At Closing,
Transferee shall deliver or cause to be delivered the following:
(a) the Units referred to in Article II hereof;
(b) copies of the executed Registration Rights
Agreement and Operating Partnership Agreement;
(c) a certificate of Transferee certifying that the
representations and warranties of Transferee set forth herein
are true and correct in all material respects as of the
Closing Date;
(d) such other documents and instruments as
Contributor and Transferee agree are necessary or appropriate.
14
8.3 Closing Costs. Transferee agrees to pay all costs
associated with the closing of the acquisition of the Interests by Transferee,
including (i) survey costs, (ii) costs of obtaining a title insurance policy for
the benefit of Transferee, (iii) documentary and transfer fees, and (iv) all
taxes, recording charges and other fees imposed on or in connection with the
Contribution; provided, however, to the extent any instruments are required to
be recorded in connection with the Contribution, Contributors, on one hand, and
Transferee, on the other hand, shall each pay one-half (1/2) of all costs,
transfer and recordation taxes and fees associated with the recordation. Each
party shall pay its own legal fees. Transferee's obligation to pay the closing
costs hereunder shall be in addition to and apart from its obligation to deliver
the Units to the Contributors.
ARTICLE IX
REMEDIES ON DEFAULT
9.1 Contributors' Remedies. Except for any breaches waived in
writing by Contributors, if Transferee fails to consummate the Contribution when
required to do so pursuant to the provisions hereof, then Contributors shall be
entitled to terminate this Agreement as the exclusive and sole right and remedy
of Contributors (except as provided in this sentence), whereupon this Agreement
shall terminate and none of the parties shall have any further obligations to
any other party, provided, however, that in such event Transferee shall
reimburse Contributors for all reasonable costs incurred by Contributors in
connection with the Contribution, provided that the amount to be reimbursed by
Transferee shall not exceed Twenty-Five Thousand Dollars ($25,000).
9.2 Transferee's Remedies. Except for any breaches waived in
writing by Transferee, if any Contributor has breached any of his, her or its
covenants or obligations under this Agreement or has failed, refused or is
unable to consummate the Contribution by the date of the Closing when and as
required to do so hereunder, then Transferee shall have the right to bring an
action at law or in equity seeking the specific performance of the obligations
of any such Contributor hereunder and in addition thereto or in lieu thereof,
Transferee may avail itself of any other remedies available at law or in equity
on account of such breach, provided, however, the amount of money damages that
Transferee may recover from the Partnership and Contributors shall not exceed
Twenty-Five Thousand Dollars ($25,000).
9.3 Limitation on Contributor's Liability. Any liability of
Contributors to Transferee pursuant to Section 9.2 shall be several and not
joint and shall be limited to the fair market value of the Units issued to
Contributor at Closing (assuming for this purpose that the fair market value of
each Unit is equal to the price per share of beneficial interest of the REIT at
the time of determination).
15
ARTICLE X
INDEMNIFICATION
10.1 Indemnification by Contributors. Contributors hereby
jointly and severally indemnify and agree to defend and hold harmless
Transferee, and its officers, directors, employees, agents and successors and
assigns and its general partners and any officers, trustees, directors,
employees, agents and successors and assigns of such general partners
("Transferee Indemnitees"), from and against any and all demands, claims,
actions or causes of action, assessments, expenses, costs, damages, losses and
liabilities (including attorneys' fees and other charges) which may at any time
be asserted against or suffered by any Transferee Indemnitee, the Property, or
any part thereof, whether before or after date of the Closing, as a result of,
on account of or arising from (a) the failure of Contributors to perform any of
their obligations hereunder or, to the extent provided in Section 11.1, the
breach by Contributors of any of their representations and warranties hereunder,
(b) events, contractual obligations, acts or omissions of Contributors or the
Partnership that occurred in connection with the ownership or operation of the
Property prior to the Closing, (c) damage to property or injury to or death of
any person or any claims for any debts or obligations occurring on or about or
in connection with the Property or any portion thereof or with respect to the
operation of the Property at any time or times prior to the Closing, or (d) any
obligation, claim, suit, liability, contract, agreement, debt or encumbrance
(other than Permitted Liens) created, arising or accruing prior to the date of
the Closing, regardless of when asserted, relating to the Property or its
operation, including, without limitation, any and all liabilities for federal or
state income taxes or other taxes, which shall not have been set forth or
specifically described in this Agreement or the Schedules and the Exhibits
hereto. The obligations of Contributor under this Section 10.1 shall survive the
Closing.
10.2 Indemnification by Transferee. Transferee hereby
indemnifies and agrees to defend and hold harmless Contributors, and their
respective successors and assigns ("Contributor Indemnitees"), from and against
any and all demands, claims, actions or causes of action, assessments, expenses,
costs, damages, losses and liabilities (including attorneys' fees and other
charges) which may at any time be asserted against or suffered by any
Contributor Indemnitee, the Property, or any part thereof, whether before or
after the date of the Closing, as a result of, on account of or arising from (a)
the failure of Transferee to perform any of its obligations hereunder or, to the
extent provided in Section 11.1, the breach by Transferee of any of its
representations and warranties made herein, (b) events, contractual obligations,
acts or omissions of Transferee that occurred in connection with the ownership
or operation of the Property prior to the Closing, (c) damage to property or
injury to or death of any person or any claims for any debts or obligations
occurring on or about or in connection with the Property or any portion thereof
or with respect to the operation of the Property at any time or times prior to
the Closing, or (d) any damage to the Property caused by Transferee in
connection with any studies, investigations or tests conducted by Transferee
pursuant to Section 5.2 hereof. The obligations of Transferee under this Section
10.2 shall survive the Closing.
16
ARTICLE XI
GENERAL PROVISIONS
11.1 Survival of Liability with Respect to Representations and
Warranties. (a) It is the express intention and agreement of the parties that
the representations and warranties of Transferee and Contributors set forth in
this Agreement shall survive the consummation of the Contribution for a period
of one (1) year from the date of the Closing except that (i) the representation
and warranty of Contributors set forth in Section 4.18 hereof shall survive the
consummation of the Contribution for a period of two (2) years from the date of
the Closing and (ii) the representations and warranties of Contributors set
forth in Section 4.21 hereof shall survive Closing and shall not terminate.
Except as provided in the previous sentence, such representations and warranties
shall expire and be terminated and extinguished forever at the expiration of
such period. Any written notice given within such period setting forth a claim
must set forth the nature and details of the claim with specificity.
(b) Any liability of Contributors to Transferee pursuant to
this Section 11.1 shall be several and not joint. Except for a breach of a
representation and warranty set forth in Section 4.21 hereof, each Contributor's
liability shall be limited to twenty percent (20%) of the fair market value of
the Units issued to such Contributor at Closing (assuming for this purpose that
the fair market value of each Unit is equal to the price per share of beneficial
interest of the REIT at the time of determination).
11.2 Notices. All notices, demands, requests or other
communications which may be or are required to be given or made by either
Contributor or Transferee to the other pursuant to this Agreement shall be in
writing and shall be hand delivered or transmitted by certified mail, express
overnight mail or delivery service, telegram, telex or facsimile transmission to
the parties at the following addresses:
17
If to Contributor, at the address of Contributor set forth on
Schedule 1.1 hereto
If to Transferee: Eldertrust Operating Limited Partnership
c/o ElderTrust
General Partner
000 XxXxxxxx Xxxx
Xxxxx 000
Xxxxxxx Xxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Xx.
President and Chief Executive
Officer
or such other address as the addressee may indicate by written notice to the
other party.
Each notice, demand, request or communication which shall be
given or made in the manner described above shall be deemed sufficiently given
or made for all purposes at such time as it is delivered to the addressee (with
the delivery receipt, the affidavit of messenger or (with respect to a telex)
the answerback being deemed conclusive but not exclusive evidence of such
delivery) or at such time as delivery is refused by the addressee upon
presentation.
11.3 Governing Law. This Agreement, the rights and obligations
of the parties hereto and any claims or disputes relating thereto shall be
governed by and construed under the laws of the State of Maryland (but not
including the choice of law rules thereof).
11.4 Benefit and Assignment. No party hereto shall assign this
Agreement, in whole or in part, whether by operation of law or otherwise,
without the prior written consent of Contributor (if the assignor is Transferee)
or Transferee (if the assignor is Contributors), which consent shall not be
unreasonably withheld, and any purported assignment contrary to the terms hereof
shall be null, void and of no force and effect, except that Transferee may
assign all or a portion of this Agreement and its rights hereunder, to a
corporation, partnership, limited liability or other entity of which the entire
ownership interest is owned directly or indirectly by Transferee without the
consent of Contributor; no such assignment shall relieve Transferee of its
obligations hereunder.
This Agreement shall be binding upon and shall inure to the
benefit to the parties hereto and their respective successors and assigns as
permitted hereunder. No person or entity other than the parties hereto is or
shall be entitled to bring any action to enforce any provision of this Agreement
against any of the parties hereto, and the covenants and agreements set forth in
this Agreement shall be solely for the benefit of, and shall be enforceable only
by, the parties hereto or their respective successors and assigns as permitted
hereunder.
18
11.5 Severability. If any part of any provision of this
Agreement or any other agreement, document or writing given pursuant to or in
connection with this Agreement shall be invalid or unenforceable under
applicable law, such part shall be ineffective to the extent of such invalidity
or unenforceability only, without in any way affecting the remaining parts of
such provisions or the remaining provisions of said agreement so long as the
economic and legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party.
11.6 Entire Agreement; Amendment. This Agreement and the
Exhibits and Schedules attached hereto (each of which shall be deemed
incorporated herein and made a part hereof) contain the final and entire
agreement between the parties hereto with respect to the Contribution and are
intended to be an integration of all prior negotiations and understandings.
Contributor and Transferee shall not be bound by any terms, conditions,
statements, warranties or representations, oral or written, not contained or
referred to herein or therein. No amendment, change or modification of this
Agreement shall be valid unless the same is in writing and signed by the parties
hereto.
11.7 No Waiver. No delay or failure on the part of any party
hereto in exercising any right, power or privilege under this Agreement or under
any other instrument or document given in connection with or pursuant to this
Agreement shall impair any such right, power or privilege or be construed as a
waiver of any default or any acquiescence therein. No single or partial exercise
of any such right, power or privilege shall preclude the further exercise of
such right, power or privilege. No waiver shall be valid against any party
hereto unless made in writing and signed by the party against whom enforcement
of such waiver is sought and then only to the extent expressly specified
therein.
11.8 Power of Attorney. By executing this Agreement pursuant
to a Consent Form, each Contributor is constituting and appointing each of
Xxxxxx X. Xxxxxxx, Xx. and D. Xxx XxXxxxxx, Xx., individually, with full power
of substitution, the true and lawful attorney-in-fact (the "Attorney") of such
Contributor, with full power and authority in the name of and for and on behalf
of such Contributor, to execute an instrument of conveyance contributing his,
her or its Interest to Transferee pursuant to the terms set forth in this
Agreement, to execute the Operating Partnership Agreement and the Registration
Rights Agreement and to execute any other instruments that Transferee reasonably
deems necessary or appropriate in connection with the contribution of the
Interest pursuant to this Agreement.
19
11.9 Headings. Section and subsection headings contained in
this Agreement are inserted for convenience of reference only, shall not be
deemed to be a part of this Agreement for any purpose, and shall not in any way
define or affect the meaning, construction or scope of any of the provisions
hereof.
11.10 Counterparts. To facilitate execution, this Agreement
may be executed in as many counterparts as may be required. It shall not be
necessary that the signature of or on behalf of each party appears on each
counterpart, but it shall be sufficient that the signature of or on behalf of
each party appears on one or more of the counterparts. All counterparts shall
collectively constitute a single agreement. It shall not be necessary in any
proof of this Agreement to produce or account for more than a number of
counterparts containing the respective signatures of or on behalf of all of the
parties.
20
IN WITNESS WHEREOF, each of the Contributors has executed a
separate Consent Form agreeing to be bound by the terms of this Agreement and
Transferee has caused this Agreement to be duly executed and delivered on its
behalf as of the date first above written.
TRANSFEREE:
ELDERTRUST OPERATING LIMITED
PARTNERSHIP
By: ElderTrust Realty Group, Inc.,
general partner
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
--------------------------------
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: President and Chief
Executive Officer
21
[COUNTERPART SIGNATURE PAGE TO PLAN OF ASSET TRANSFER AND CONTRIBUTION AGREEMENT
DATED AS OF SEPTMBER 25, 1997 BY AND BETWEEN ELDERTRUST OPERATING LIMITED
PARTNERSHIP AND THE PARTIES LISTED ON SCHEDULE 1 THERETO]
Please sign exactly as your name appears on the previous page.
/s/ Xxxxxxx X. Xxxxxx 9/28/97
-------------------------------------------------------------
Xxxxxxx X. Xxxxxx Date
STATE OF PENNSYLVANIA)
: SS. October 1, 1997
COUNTY OF XXXXXXX )
On the 1st day of October 1997, before me personally came
Xxxxxxx X. Xxxxxx, to me known and known to me to be the individual described in
the foregoing instrument, and acknowledged that he executed the same.
/s/ Xxxxx X. Xxxxxxx
----------------------------
Notary Public
22
[COUNTERPART SIGNATURE PAGE TO PLAN OF ASSET TRANSFER AND CONTRIBUTION AGREEMENT
DATED AS OF SEPTMBER 25, 1997 BY AND BETWEEN ELDERTRUST OPERATING LIMITED
PARTNERSHIP AND THE PARTIES LISTED ON SCHEDULE 1 THERETO]
Please sign exactly as your name appears on the previous page.
/s/ Xxxxxxx X. Xxxxxx 9/26/97
-------------------------------------------------------------
Xxxxxxx X. Xxxxxx Date
STATE OF PENNSYLVANIA)
: SS. September 26, 1997
COUNTY OF XXXXXXX )
On the 26th day of September 1997, before me personally came
Xxxxxxx X. Xxxxxx, to me known and known to me to be the individual described in
the foregoing instrument, and acknowledged that he executed the same.
/s/ Xxxxx X. Xxxxxxx
-----------------------
Notary Public
23
[COUNTERPART SIGNATURE PAGE TO PLAN OF ASSET TRANSFER AND CONTRIBUTION AGREEMENT
DATED AS OF SEPTMBER 25, 1997 BY AND BETWEEN ELDERTRUST OPERATING LIMITED
PARTNERSHIP AND THE PARTIES LISTED ON SCHEDULE 1 THERETO]
Please sign exactly as your name appears on the previous page.
/s/ Xxxxxx X. Xxxxxxxxxx 9/30/97
-------------------------------------------------------------
Xxxxxx X. Xxxxxxxxxx Date
STATE OF PENNSYLVANIA)
: SS.
COUNTY OF XXXXXXX )
On the 30th day of September 1997, before me personally came
Xxxxxx X. Xxxxxxxxxx, to me known and known to me to be the individual described
in the foregoing instrument, and acknowledged that he executed the same.
/s/ Xxxxxx X. Xxxxxxx
--------------------------
Notary Public
24
[COUNTERPART SIGNATURE PAGE TO PLAN OF ASSET TRANSFER AND CONTRIBUTION AGREEMENT
DATED AS OF SEPTMBER 25, 1997 BY AND BETWEEN ELDERTRUST OPERATING LIMITED
PARTNERSHIP AND THE PARTIES LISTED ON SCHEDULE 1 THERETO]
Please sign exactly as your name appears on the previous page.
/s/ Xxxxxxx X. Xxxxx 9/26/97
-------------------------------------------------------------
Xxxxxxx X. Xxxxx Date
STATE OF PENNSYLVANIA)
: SS. October 1, 1997
COUNTY OF DELAWARE )
On the 26th day of September 1997, before me personally came
Xxxxxxx X. Xxxxx, to me known and known to me to be the individual described in
the foregoing instrument, and acknowledged that he executed the same.
/s/ Xxxxxxx X. Xxxxxxxxxx
----------------------------
Notary Public
25
