EXHIBIT 10.37
FIRST AMENDMENT TO
AGREEMENT FOR SALE OF NURSING HOME PROPERTIES
This First Amendment to Agreement for Sale of Nursing Home
Properties (this "Amendment") is made and entered into as of the 30th day of
August, 2001, by and among the Entities set forth on Schedule 1 hereto
(collectively, the "Xxxxxxx Entities") and FC Properties, LLC, a Florida limited
liability company (f/k/a NMC of Florida, LLC, a Florida limited liability
company) ("Buyer").
WITNESSETH:
WHEREAS, the Xxxxxxx Entities and Buyer are parties to that
certain Agreement for Sale of Nursing Home Properties, dated as of July 13,
2001, as amended by that certain Addendum to Agreement for Sale of Nursing Home
Properties, dated as of July 13, 2001 (as further amended, supplemented or
otherwise modified from time to time, the "Purchase Agreement"; capitalized
terms not otherwise defined herein shall have the definitions provided therefore
in the Purchase Agreement); and
WHEREAS, the Xxxxxxx Entities and Buyer wish to amend the
Purchase Agreement as more specifically provided herein.
NOW, THEREFORE, in consideration of the foregoing, and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:
1. Amendments to the Purchase Agreement.
a. Section 2.3.4. Section 2.3.4 of the Purchase Agreement is hereby
amended and restated in its entirety to read as follows:
On or before July 18, 2001, Buyer shall increase the Escrowed
Deposit by the amount of One Million Six Hundred Thousand
Dollars ($1,600,000) (the "Additional Deposit").
Notwithstanding anything to the contrary contained herein, on
August 27, 2001, the Diligence Deposit shall become the
exclusive property of the Xxxxxxx Entities and shall cease to
be any part of the Deposit. On or before August 31, 2001,
Buyer shall increase the Escrowed Deposit by the amount of
Five Hundred Thousand Dollars ($500,000) (also, the
"Additional Deposit"). On or before September 15, 2001, Buyer
shall increase the Escrowed Deposit by the amount of One
Million Dollars ($1,000,000) (also, the "Additional Deposit").
In the event that Buyer fails to increase the Escrowed Deposit
by the required amounts on or before July 18, 2001, August 31,
2001, or September 15, 2001, as applicable, the Xxxxxxx
Entities may terminate this Agreement by providing written
notice to Buyer and the Xxxxxxx Entities may retain the
Deposit (including, without limitation, the Diligence
Deposit), and neither party shall have
any other liability hereunder of any nature whatsoever to the
other party, including, without limitation, any liability for
damages.
b. Section 4.1 (Form of Sublease or Assignment). Section 4.1 of the
Purchase Agreement is hereby amended by adding the following new sentence at the
end thereof:
Notwithstanding anything to the contrary contained herein, the
applicable Xxxxxxx Entity shall assign its interest in the
Lease of Facility #803, Xxxxxxx Health and
Rehabilitation--Tarpon Springs pursuant to a Lease Assignment,
with appropriate modifications being made to provide for the
security deposit described in Section 4.2 hereof (the "Tarpon
Springs Lease Assignment").
c. Section 4.2 (Security Deposits under the Subleases). Section 4.2 of
the Purchase Agreement is hereby amended and restated in its entirety to read as
follows:
At the Closing, in accordance with Schedule 4.2, Buyer shall
deposit with the Xxxxxxx Entities cash or an irrevocable
letter of credit, from an institution and in a form acceptable
to the Xxxxxxx Entities, in an amount equal to six (6) months
of the aggregate base rent under the Subleases plus six (6)
months of payments under the Management Agreement plus six (6)
months of the aggregate base rent under the lease assigned to
Buyer pursuant to the Tarpons Springs Lease Assignment, to be
held by the Xxxxxxx Entities pursuant to the terms of the
Subleases, the Tarpon Springs Lease Assignment and the
assignment and assumption of the Management Agreement (the
"Security Deposit") as security for every Sublease and the
Xxxxxxx Entities' contingent liability under the Lease
assigned pursuant to the Tarpon Springs Lease Assignment and
the Xxxxxxx Entities' contingent liability under the
Management Agreement. The Security Deposit shall be held by
the Xxxxxxx Entities until expiration of the Subleases, the
Lease assigned pursuant to the Tarpon Springs Lease Assignment
and the Management Agreement or termination of or release of
the Xxxxxxx Entities from all liability under the applicable
Leases and the Management Agreement.
d. Section 8.2.12 (Financing Commitments). Section 8.2.12 of the
Purchase Agreement is hereby amended and restated in its entirety to read as
follows:
On or before the fifth (5th) day after the execution and
delivery of this Agreement by all parties hereto, Buyer shall
deliver to the Xxxxxxx Entities a true, correct and complete
copy of its fully executed loan application (which shall
contain, among other things, all conditions precedent to the
funding of such loans) for senior and junior debt to finance
the Purchase Price, subject to the last sentence of this
paragraph. On or before the thirtieth (30th) day after the
execution and delivery of this Agreement by all parties
hereto, Buyer shall deliver to the Xxxxxxx Entities a written,
signed acknowledgement, in form and substance reasonably
acceptable to the Xxxxxxx Entities, by each of its senior and
junior lenders (subject to the last sentence of this Section)
financing the Purchase Price, describing the status of such
lender's diligence process and stating that based on the
diligence it has
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performed to such date, such lender knows of no state of facts
that could reasonably be expected to prevent it from funding
the senior and junior loans, as applicable (each, a "Comfort
Letter"). Attached hereto as Exhibit N and Exhibit O are
letters, in form and substance satisfactory to the Xxxxxxx
Entities, that have been delivered by Buyer's senior and
junior lenders. Upon learning of any problems, issues or
concerns discovered by Buyer's senior and/or junior lenders in
the course of such lenders' diligence process with respect to
the Facilities, including, without limitation, any problems,
issues or concerns identified by third-party consultants,
Buyer shall promptly inform the Xxxxxxx Entities of such
problems, issues or concerns. Buyer shall use its reasonable
efforts to keep itself informed of the results of the lenders'
diligence process in a timely manner and shall cooperate with
any efforts by the Xxxxxxx Entities to obtain further
information relating to any problems, issues or concerns
raised by the lenders' diligence process. Buyer shall meet
with and/or discuss with the Xxxxxxx Entities such problems,
issues or concerns, and Buyer shall cooperate with and assist
the Xxxxxxx Entities to meet with and/or discuss such
problems, issues or concerns directly with the lenders. On or
before September 6, 2001, Buyer shall deliver to the Xxxxxxx
Entities copies of final appraisals for each of the
Facilities. On or before 5:00 p.m. Central Time, September 15,
2001, Buyer shall deliver to the Xxxxxxx Entities a written,
signed acknowledgement from each of its senior and junior
lender(s) financing the Purchase Price that such lender(s)
have completed all diligence, that the results of such
diligence are satisfactory to such lenders and that such
lenders have received all approvals required for the funding
of such loans (the "Approval Letters").
Buyer's failure to timely deliver the final appraisals or the
Approval Letters shall permit the Xxxxxxx Entities, at their
option, by written notice to Buyer delivered to Buyer not
later than the fifth (5th) business day after the required
date for such delivery by Buyer, to terminate this Agreement.
For all other requirements of Buyer under this Section 8.2.12,
in the event that Buyer fails to perform, the Xxxxxxx Entities
shall give Buyer notice of Buyer's failure to perform,
including a reasonably detailed explanation of the required
obligation and requested steps for Buyer to take to perform
such obligation. Upon such notice, Buyer shall have three (3)
business days to either (i) perform the required obligation or
(ii) provide to the Xxxxxxx Entities a plan reasonably
acceptable to the Xxxxxxx Entities outlining Buyer's proposed
manner of performing the required obligation. If Buyer shall
fail to timely act under either clause (i) or clause (ii) of
the immediately preceding sentence or to diligently pursue the
plan described in clause (ii), then the Xxxxxxx Entities may,
at their option, by written notice to Buyer delivered to Buyer
not later than the fifth (5th ) business day after the
required date for such performance by Buyer, terminate this
Agreement. If the Xxxxxxx Entities have not timely terminated
this Agreement pursuant to this paragraph, such termination
rights shall be waived.
In the event of any termination pursuant to the preceding
paragraph, the Escrow Agent shall pay the Escrowed Deposit to
Buyer and the Xxxxxxx Entities shall
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retain the Diligence Deposit. Notwithstanding anything herein
to the contrary, the aggregate contributions from the senior
and junior lenders (net of all origination, commitment and
other fees, prepayments, reserves and other deductions of any
nature whatsoever) available to Buyer to finance the Purchase
Price and any other amounts owing by Buyer hereunder at the
Closing shall total at least One Hundred Fifty Million Dollars
($150,000,000), and all deliveries by Buyer under this Section
8.2.12 shall evidence such availability or Buyer shall be
deemed not to have made the deliveries required hereunder;
provided, however that nothing herein shall obligate Buyer to
actually incur junior or mezzanine financing at Closing if all
funds that would have been provided by such junior or
mezzanine financing are replaced with equity contributions
obtained by Buyer (other than pursuant to Section 9.6 hereof).
e. Section 14.20. The following new subsection 14.20 is hereby added to
the Purchase Agreement in proper numerical order:
14.20 Interests in Operators. In the event of any termination
of this Agreement, other than a termination of this Agreement
as a result of a material breach by the Xxxxxxx Entities that
is reasonably within their control, including, without
limitation, a termination by the Xxxxxxx Entities pursuant to
Section 8.2.12 hereof, Buyer shall, no later than fifteen (15)
days after the date of any such termination, transfer and
assign, or cause to be transferred and assigned, to an entity
or entities to be designated by the Xxxxxxx Entities all of
the ownership interests in Noble Health Care, LLC ("Noble")
and Cabernet Health Care LLC ("Cabernet" and, together with
Noble, the "Transferred Entities") together with all of the
Transferred Entities' direct and indirect subsidiaries
including, without limitation, the entities that have filed
applications for licensing with the Department pursuant to
this Agreement (including, without limitation, pursuant to
Section 8.2.1 hereof) (collectively, the "Subsidiaries"). At
the time of such transfer or assignment, none of the
Transferred Entities or the Subsidiaries shall have or be
subject to any liabilities, other than in connection with the
transition and operation of the Facilities. Upon any such
transfer or assignment, the Xxxxxxx Entities shall reimburse
Buyer for the amount that Buyer is required to pay to the
Transferred Entities and/or the Subsidiaries for actual,
out-of-pocket and reasonably documented costs incurred by the
Transferred Entities and the Subsidiaries for license
application filing fees, formation fees for the Transferred
Entities and the Subsidiaries, the cost of financial statement
preparation for the license applications and other license
application preparation costs; provided, however, that the
Xxxxxxx Entities shall not be required to reimburse Buyer for
any amounts paid by the Transferred Entities and/or the
Subsidiaries for legal and accounting fees in connection with
review of the foregoing and analyzing and creating the
structure of the Transferred Entities and the Subsidiaries;
and provided, further, that in no event shall the Xxxxxxx
Entities be required to reimburse Buyer in an amount in excess
of $800,000 hereunder. If the Xxxxxxx Entities pay any such
amounts directly to the owner of the Transferred Entities
and/or
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the Subsidiaries (the "TE Owner") with respect to the transfer
of the Transferred Entities and/or the Subsidiaries, the
Xxxxxxx Entities shall not be required to pay such amounts to
Buyer; provided that if the amount payable by the Xxxxxxx
Entities to the TE Owner with respect to the transfer of the
Transferred Entities and/or the Subsidiaries exceeds the
foregoing amount that they are required to pay pursuant to
this paragraph, then Buyer shall upon demand of the Xxxxxxx
Entities promptly make the payment of such excess amount to
the TE Owner; provided further that if Buyer fails to make
such payment to the TE Owner pursuant to the immediately
preceding clause within five (5) days of such demand, then the
Xxxxxxx Entities may pay such amount to the TE Owner and Buyer
shall reimburse the Xxxxxxx Entities for any such payment.
f. Section 10.2.8 (Pharmerica Contract). All references to the date
"August 15, 2001" in Section 10.2.8 of the Purchase Agreement are hereby amended
to be "5:00 p.m. Central Time, September 7, 2001".
g. Exhibits A-1 and A-2. On or before the Closing Date under the
Purchase Agreement, the Xxxxxxx Entities shall purchase fee title to Facility
#4132, Xxxxxxx Healthcare--Xxxxx, in the City of Fort Xxxxx, Florida, at which
time Exhibit A-1 and Exhibit A-2 of the Purchase Agreement shall be amended to
reflect Facility #4132 as an Owned Facility and no longer as a Leased Facility
under the Purchase Agreement.
h. Exhibit C. Exhibit C of the Purchase Agreement is hereby amended and
restated in its entirety to read as Exhibit C attached hereto.
i. Exhibit N. A new Exhibit N is hereby added to the Purchase Agreement
in the form of the Exhibit N attached hereto.
j. Exhibit O. A new Exhibit O is hereby added to the Purchase Agreement
in the form of the Exhibit O attached hereto.
2. Reaffirmation of Obligations. Buyer hereby acknowledges and agrees that (i)
the period for due diligence on the financial statements provided in Section
12.2 of the Purchase Agreement has terminated, (ii) Buyer has not terminated the
Purchase Agreement and (iii) any termination rights Buyer may have had under
Section 12.2 of the Purchase Agreement have terminated and are no longer of any
force or effect.
3. Acknowledgments.
a. Proposed Operators. The Xxxxxxx Entities acknowledge and agree that
Florida Health Care Properties, LLC, a Florida limited liability company, is
approved as a "Proposed Operator" under Section 8.2.15 of the Purchase
Agreement.
b. Aegis Contract. The Xxxxxxx Entities acknowledge and agree that
Buyer has satisfied its obligations under Section 10.2.9 (Aegis Contract) of the
Purchase Agreement.
c. Operating Lease. The Xxxxxxx Entities acknowledge and agree that
Buyer has satisfied its obligations under Section 8.2.15(b) of the Purchase
Agreement.
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d. Comfort Letters. The Xxxxxxx Entities acknowledge and agree that
Buyer has satisfied its obligations under Section 8.2.12 of the Purchase
Agreement solely with respect to the delivery of the Comfort Letters.
e. Licensure Notices. Buyer acknowledges and agrees that the Xxxxxxx
Entities have satisfied their obligations under Section 8.1.12 of the Purchase
Agreement solely with respect to the delivery of notice to the Department.
f. Schedule 1.4.8. Buyer acknowledges and agrees that the Xxxxxxx
Entities have satisfied their obligations under Section 1.4.8 of the Purchase
Agreement to deliver Schedule 1.4.8.
g. Schedule 7.1.21. Buyer acknowledges and agrees that the Xxxxxxx
Entities have satisfied their obligations under Section 7.1.21 of the Purchase
Agreement to deliver Schedules 7.1.21(a)-(f).
h. PTO Schedule. Buyer acknowledges and agrees that the Xxxxxxx
Entities have satisfied their obligations under Section 8.1.10 of the Purchase
Agreement to deliver the PTO Schedule.
4. Miscellaneous.
a. Captions. Section captions used in this Amendment are for
convenience only, and shall not affect the construction of this Amendment.
b. Governing Law. This Amendment shall be a contract made under and
governed by the laws of the State of Florida, without regard to conflict of laws
principles. Whenever possible each provision of this Amendment shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Amendment shall be prohibited by or invalid under
such law, such provision shall be ineffective to the extent of such prohibition
or invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Amendment.
c. Counterparts. This Amendment may be executed in any number of
counterparts and by the different parties on separate counterparts, and each
such counterpart shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same Amendment.
d. Successors and Assigns. This Amendment shall be binding upon Buyer
and the Xxxxxxx Entities and their respective successors and assigns, and shall
inure to the sole benefit of Buyer and the Xxxxxxx Entities and the successors
and assigns of Buyer and the Xxxxxxx Entities.
e. References. Any reference to the Purchase Agreement contained in any
notice, request, certificate, or other document executed concurrently with or
after the execution and delivery of this Amendment shall be deemed to include
this Amendment unless the context shall otherwise require.
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f. Continued Effectiveness. Notwithstanding anything contained herein,
the terms of this Amendment are not intended to and do not serve to effect a
novation as to the Purchase Agreement. The Purchase Agreement as amended hereby
remains in full force and effect.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed on their respective behalf, by their respective duly authorized
officers, as of the date first above written.
FC PROPERTIES, LLC, a Florida limited XXXXXXX ENTERPRISES - FLORIDA,
liability company (f/k/a NMC of Florida, INC.,
LLC, a Florida limited liability company) a California corporation
By: Formation Capital, LLC, its sole By:
manager --------------------------------
Name:
By: ------------------------------
----------------------------- Title:
Name: -----------------------------
---------------------------
Title:
--------------------------
XXXXXXX HEALTH AND XXXXXXX SAVANA CAY MANOR, INC.,
REHABILITATION SERVICES, INC., a California corporation
a California corporation
By: By:
-------------------------------------- --------------------------------
Name: Name:
------------------------------------ ------------------------------
Title: Title:
----------------------------------- -----------------------------
VANTAGE HEALTHCARE XXXXXXXX HEALTH CARE, INC.,
CORPORATION, a Florida corporation
a Delaware corporation
By: By:
-------------------------------------- --------------------------------
Name: Name:
------------------------------------ ------------------------------
Title: Title:
----------------------------------- -----------------------------
[SIGNATURE PAGE TO AMENDMENT TO PURCHASE AGREEMENT]
S-1
SCHEDULE 1
XXXXXXX ENTITIES
XXXXXXX ENTERPRISES - FLORIDA, INC., a California corporation
XXXXXXX HEALTH AND REHABILITATION SERVICES, INC., a California corporation
XXXXXXX SAVANA CAY MANOR, INC., a California corporation
VANTAGE HEALTHCARE CORPORATION, a Delaware corporation
XXXXXXXX HEALTH CARE, INC., a Florida corporation
EXHIBIT C
ALLOCATION OF THE PURCHASE PRICE
Exhibit C
EXHIBIT N
FORM OF SENIOR LENDER LETTER
Exhibit N
EXHIBIT O
FORM OF JUNIOR LENDER LETTER
Exhibit O
