-----------------------------
PROPERTY PURCHASE AGREEMENT
DATED AS OF JUNE 30, 1998
AMONG
INTEGRATED HEALTH SERVICES, INC.,
INTEGRATED HEALTH SERVICES OF FLORIDA AT HOLLYWOOD
HILLS, INC.
MEDICAL ASSOCIATES IV LIMITED PARTNERSHIP,
HILLCO PCS (HIALEAH) LIMITED PARTNERSHIP,
MEDICAL ASSET FUND, LLC,
XXXX X. XXXXXXXX,
XX. XXXX X. XXXXXXX, XX.,
AND
HIALEAH ACQUISITION FUND, L.P.
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TABLE OF CONTENTS
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PAGE
ARTICLE I: SALE AND PURCHASE OF PROPERTY....................................2
1.1 Acquired Property ...............................................2
1.2 Excluded Property ...............................................3
1.3 No Assumption of Liability.......................................3
ARTICLE II: PURCHASE PRICE..................................................4
2.1 Determination and Payment of Purchase Price.....................4
2.2 Transfer and Sales Taxes........................................4
2.3 Certain Adjustments.............................................5
2.4 Prorated Items..................................................5
ARTICLE III: IHS STOCK.......................................................5
3.1 IHS Stock.......................................................5
ARTICLE IV: THE CLOSING......................................................10
4.1 The Closing.....................................................10
ARTICLE V: REPRESENTATIONS AND WARRANTIES OF GROUP MEMBERS..................10
5.1 Organization and Standing.......................................10
5.2 Authority.......................................................11
5.3 Binding Effect..................................................11
5.4 Absence of Conflicting Agreements...............................12
5.5 Consents........................................................12
5.6 Title to Personal Property......................................12
5.7 Contracts.......................................................12
5.8 Title, Condition of the Real Property...........................13
5.9 Legal Proceedings...............................................14
5.10 Compliance with Laws............................................14
5.11 Finders.........................................................14
5.12 Tax Returns ....................................................15
5.13 Encumbrances Created by this Agreement .........................15
5.14 Equity Holders .................................................15
ARTICLE VI: REPRESENTATIONS AND WARRANTIES OF IHS AND BUYER ................15
6.1 Organization and Standing ......................................15
6.2 Power of Authority .............................................15
6.3 Binding Agreement ..............................................15
6.4 SEC Documents ..................................................15
(i)
6.5 Absence of Conflicting Agreements ..............................16
6.6 Consents .......................................................16
6.7 Capital Stock ..................................................16
6.8 Finders ........................................................16
ARTICLE VII: INFORMATION AND RECORDS CONCERNING THE FACILITY................16
7.1 Maps, Plans, Surveys, etc ......................................16
ARTICLE VIII: OBLIGATIONS OF THE PARTIES UNTIL CLOSING .....................17
8.1 Negative Covenants of the Parties ..............................17
8.2 Affirmative Covenants ..........................................17
8.3 Pursuit of Consents and Approvals ..............................17
8.4 Exclusivity ....................................................17
ARTICLE IX: CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER AND IHS............17
9.1 Representations and Warranties .................................17
9.2 Performance of Covenants .......................................17
9.3 Delivery of Closing Certificate ................................18
9.4 Legal Matters ..................................................18
9.5 Approvals ......................................................18
9.6 Title Insurance ................................................18
9.7 Deed ...........................................................19
9.8 Property Transferred at Closing ................................19
9.9 Authorization Documents ........................................19
9.10 Opinion of Counsel .............................................19
9.11 Additional Items to be Delivered ...............................19
9.12 Intentionally Omitted ..........................................19
9.13 Certain Reports ................................................20
9.14 Other Documents ................................................20
ARTICLE X: CONDITIONS PRECEDENT TO OBLIGATIONS OF GROUP MEMBERS.............20
10.1 Representations and Warranties ..................................20
10.2 Performance of Covenants ........................................20
10.3 Delivery of Closing Certificate .................................20
10.4 Legal Matters ...................................................20
10.5 Authorization Documents .........................................20
10.6 Opinion of Counsel ..............................................21
10.7 Other Documents .................................................21
(ii)
ARTICLE XI: OBLIGATIONS OF PARTIES AFTER CLOSING ...........................21
11.1 Discharge of Liabilities ........................................21
11.2 Survival of Representations and Warranties ......................21
11.3 Indemnification by Group Members ................................21
11.4 Indemnification by Buyer and IHS ................................21
11.5 Assertion of Claims .............................................22
11.6 Control of Defense of Indemnifiable Claims ......................22
ARTICLE XII: TERMINATION ...................................................23
12.1 Termination .....................................................23
12.2 Effect of Termination ...........................................24
ARTICLE XIII: CASUALTY, RISK OF LOSS .......................................24
13.1 Casualty, Risk of Loss ..........................................24
ARTICLE XIV: MISCELLANEOUS PROVISIONS ......................................24
14.1 Public Announcements ............................................24
14.2 Costs and Expenses ..............................................24
14.3 Performance .....................................................25
14.4 Benefit and Assignment ..........................................25
14.5 Effect and Construction of this Agreement .......................25
14.6 Cooperation - Further Assistance ................................25
14.7 Notices .........................................................25
(iii)
SCHEDULES
Schedule 1.1A - Description of Real Property
Schedule 2.3 - Allocation of Purchase Price
Schedule 5.5 - Seller's Consents
Schedule 5.6 - Personal Property Encumbrances
Schedule 5.7 - Leasehold defaults of Buyer
Schedule 5.8(a) - Title Exceptions
Schedule 5.14 - Equity Interests in the Seller
Schedule 6.6 - Buyer's Consents
EXHIBITS
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Exhibit 2.1(c) - Promissory Note
Exhibit 9.7 - Special Warranty Deed
Exhibit 9.8-1 - Xxxx of Sale
Exhibit 9.8-2 - Assignment and Assumption of Contracts and Lease
Exhibit 9.10 - Opinion of Seller's Counsel
Exhibit 10.6 - Opinion of Buyer's Counsel
(iv)
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PROPERTY PURCHASE AGREEMENT
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This Property Purchase Agreement (this "AGREEMENT") is made as
of the 30th day of June, 1998, among Integrated Health Services, Inc., a
Delaware corporation having an address at 00000 Xxx Xxx Xxxxxxxxx, Xxxxxx Xxxxx,
Xxxxxxxx 00000 ("IHS"), Integrated Health Services of Florida at Hollywood
Hills, Inc., a Delaware corporation having an address at 00000 Xxx Xxx
Xxxxxxxxx, Xxxxxx Xxxxx, XX 00000 ("BUYER"), Medical Associates IV Limited
Partnership, a North Carolina limited partnership having an address at 0000
Xxxxxxxx Xxxx Xxxxx, Xxxxxxxxxx, X.X. 00000 ("SELLER"), Hillco PCS (Hialeah)
Limited Partnership, a Florida limited partnership having an address at 0000
Xxxxxxxx Xxxx Xxxxx, Xxxxxxxxxx, XX 00000 ("HILLCO"), Medical Asset Fund, LLC, a
Georgia limited liability company having an address at X.X. Xxx 0000, Xxxxxxxxx,
XX 00000-0000 ("MAF"), Xxxx X. Xxxxxxxx, an individual having an address at 0000
Xxxxxxxx Xxxx Xxxxx, Xxxxxxxxxx, X.X. 00000 ("XXXXXXXX"), Xx. Xxxx X. Xxxxxxx,
Xx., an individual having an address at 000 Xxxxxxxxxx, Xxxxxxxxx Xxx Xxxx, XX
00000 ("Xxxxxxx"), and Hialeah Acquisition Fund, L.P., a Tennessee limited
partnership having an address at X.X. Xxx 0000, Xxxxxxxxx, XX 00000-0000
("HIALEAH L.P.", and together with Hillco, MAF, Xxxxxxxx, and Xx. Xxxxxxx the
"EQUITY HOLDERS", and each an "EQUITY HOLDER"). The Equity Holders and the
Seller are sometimes referred to collectively as the "GROUP" and each as a
"GROUP MEMBER" or a "MEMBER OF THE GROUP".
BACKGROUND
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A. Buyer is a subsidiary of IHS.
B. Seller is the owner of the Property (as such term is
hereinafter defined) relating to the skilled nursing facility known as the
"HIALEAH CONVALESCENT HOME", and having an address at 000 Xxxx 00xx Xxxxxx,
Xxxxxxx, Xxxxxxx (the "FACILITY").
C. Buyer desires to purchase the Property.
D. The Equity Holders are directly or indirectly the holders
of the equity in Seller.
E. The Property is being leased to SHCM Hialeah, Inc. F/K/A
Xxxxxx Care of Hialeah, Inc. (the "LESSEE") under the Lease (the "LEASE") dated
as of January 31, 1984, as amended July 1, 1991, and further amended June 28,
1996, between Lessee and Seller.
F. IHS or one of its subsidiaries (other than Buyer) has the
right to acquire all of the Lessee's rights under the Lease.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants, agreements and representations and warranties herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending to be
legally bound, agree as follows:
ARTICLE I: SALE AND PURCHASE OF PROPERTY
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1.1 ACQUIRED PROPERTY . Subject to the terms and conditions of
this Agreement, at the Closing (as hereinafter defined), Buyer, in reliance upon
the covenants, representations, warranties and agreements of the Group Members
contained herein or made pursuant hereto, will acquire from Seller, and Seller,
in reliance upon the covenants, representations, warranties and agreements of
Buyer and IHS contained herein or made pursuant hereto, will sell, assign,
transfer and convey, free and clear of all Encumbrances (as such term is
hereinafter defined in Section 5.6), other than Permitted Encumbrances (as such
term is hereinafter defined in Section 5.8) to Buyer, all of Seller's rights,
title and interest, if any, in and to the following property (collectively, the
"PROPERTY"):
(A) the real property described on Schedule 1.1(a) attached
hereto (the "LAND");
(B) all buildings, structures, Fixtures (as hereinafter
defined) and other improvements of every kind and nature including, but not
limited to, alleyways and connecting tunnels, sidewalks, utility pipes, conduits
and lines (on-site and off-site), and parking areas and roadways appurtenant to
such buildings and structures presently or hereafter situated upon the Land
(collectively, the "IMPROVEMENTS");
(C) all easements, rights of way, licenses, leases, permits,
rights, privileges, tenements, hereditaments and uses appurtenant or applicable
to the Land, the Improvements, or the ownership or operation of the Facility,
including, but not limited to, the entire rights, title and interest of Seller
in and to any land lying in the bed of any and all public and private streets,
roads, avenues, highways or passageways, open or proposed, in front of or
abutting the Land (collectively, the "RIGHTS");
(D) all permanently affixed equipment, machinery, fixtures,
and other items of property, including all components thereof, now or hereafter
located in, on or used in connection with, and permanently affixed to or
incorporated into the Improvements, including, without limitation, all furnaces,
boilers, heaters, electrical equipment, heating, plumbing, lighting,
ventilating, refrigerating, incineration, air and water pollution control, waste
disposal, air-cooling and air-conditioning systems and apparatus, sprinkler
systems and fire and theft protection equipment, and built-in oxygen and vacuum
systems, all of which, to the greatest extent permitted by law, are hereby
deemed by the parties hereto to constitute real property, together with all
replacements, modifications, alterations and additions thereto (collectively the
"FIXTURES");
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(E) all machinery, equipment, furniture,furnishings, movable
walls or partitions, computers or trade fixtures or other personal property
located at the Facility, including without limitation, all items of furniture,
furnishings, equipment, vehicles, supplies and inventory, together with all
replacements, modifications, alterations, and additions thereto, except items,
if any, included within the definition of Fixtures (collectively, the "TANGIBLE
PERSONAL PROPERTY");
(F) the Lease, and all rights, and benefits arising thereunder
on or after the Closing, and all security deposits held by Seller, or in which
Seller has any rights, including, any security deposit under the Lease or with
public utilities; and
(G) to the extent assignable, all intangible rights of Seller
of every kind and description, used in the maintenance or operation of the Land,
or the Improvements, or other Property and, including without limitation, all
warranties, trademarks, servicemarks, tradestyles, building and property names
(including, but not limited to any name by which the Facility is commonly
known), and building signs on or relating to the Land or the Improvements, and
also including, without limitation, all rights arising under or out of any
purchase agreements covering any of the Property (the "INTANGIBLES").
All Property which constitutes real property is referred to herein as
"REAL PROPERTY" and all other Property is referred to as "PERSONAL PROPERTY."
1.2 EXCLUDED PROPERTY . Notwithstanding the foregoing, the
Property shall not include, and Seller shall not sell, transfer, convey or
assign the following property to Buyer: the right to receive refunds of any
sales tax paid by Seller prior to the Closing, the Seller's limited partnership
certificate and limited partnership agreement, qualifications to do business in
any jurisdiction, taxpayer identification numbers, and other documents related
specifically to Seller's limited partnership organization and maintenance, cash
(provided that security deposits shall be included in the Property), and any
rights arising under the Lease to the extent arising out of services or products
or other benefits provided by the Seller prior to the Closing (collectively,
"EXCLUDED PROPERTY").
1.3 NO ASSUMPTION OF LIABILITY .
(A) Buyer shall not assume, nor in any way be liable or
responsible for, anyclaim, lawsuit, liability, obligation or debt of any kind or
nature whatsoever, whether absolute, accrued, due, direct or indirect,
contingent or liquidated, matured or unmatured, joint or several, whether or not
for a sum certain, whether for the payment of money or for the performance or
observance of any obligation or condition (collectively, "LIABILITIES") of the
Seller, or arising out of the ownership, operation or maintenance of any of the
Property on or prior to the Closing, including without limitation, any liability
arising out of the Lease or any Contract (whether or not a Designated Contract)
("UNASSUMED LIABILITIES").
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(B) Notwithstanding the foregoing, subject to the terms and
conditions of this Agreement, at the Closing, Buyer shall assume and undertake
to perform when and as the same shall become due, all obligations arising out of
services or products or other benefits to be provided to Buyer after Closing
under the Lease (the "ASSUMED LIABILITIES").
ARTICLE II: PURCHASE PRICE
2.1 DETERMINATION AND PAYMENT OF PURCHASE PRICE . The purchase
price (the "PURCHASE Price") for the Property shall be TWELVE MILLION DOLLARS
($12,000,000), which shall be payable at the Closing (as hereinafter defined in
Section 4.1) as follows:
(A) SIX MILLION FIVE HUNDRED THOUSAND DOLLARS ($6,500,000)
shall be paid in cash by wire transfer of immediately available funds;
(B) TWO MILLION FIVE HUNDRED THOUSAND DOLLARS ($2,500,000)
shall be paid by the delivery of newly issued shares of the Common Stock, par
value $.001, of IHS (the "IHS STOCK") valued using the Closing Date (as
hereinafter defined) as the date of determination in accordance with Section 3.1
below); and
(C) THREE MILLION DOLLARS ($3,000,000) shall be paid by the
issuance of an unsecured promissory note of Buyer in the form of Exhibit 2.1(c)
(the "NOTE") and providing, inter alia, for the payment of principal in five
installments as follows:
January 1, 1999 $760,000
January 1, 2000 $560,000
January 1, 2001 $560,000
January 1, 2002 $560,000
January 1, 2003 $560,000
Such installments shall be paid by the delivery of shares of IHS Stock (with
such shares to be valued in accordance with Section 3.1(a) below using the date
that the delivery thereof becomes due as the date of determination). Buyer in
its sole discretion may elect to pay all or any part of such principal
installments in cash. The outstanding principal under the Note, from time to
time, shall bear interest at the rate of eight percent (8%) per anum, with such
accrued and unpaid interest to be paid in cash on each date when a principal
payment becomes due. Buyer in its sole discretion may elect to prepay all or any
principal outstanding under the Note from time to time or at any time; provided
that any such prepayment shall be made in cash. The Note shall be executed and
delivered in Maryland.
2.2 TRANSFER AND SALES TAXES . All state and local real estate and
other property transfer, recording fees and similar taxes arising out of the
transactions contemplated herein shall be borne fifty percent (50%) by Seller
and fifty percent (50%) by Buyer. Any income or gains taxes arising out of the
transactions contemplated herein shall be borne by Seller.
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2.3 CERTAIN ADJUSTMENTS . The Purchase Price shall be allocated as
agreed in good faith by and between Buyer and Seller.
2.4 PRORATED ITEMS . On the Closing Date, the following
adjustments and prorations shall be computed as of 11:59 P.M. on the Closing
Date with respect to the following taxes (unless otherwise stated herein) and
the cash portion of the Purchase Price shall be adjusted, upward or downward as
appropriate, to reflect such prorations:
(A) RENT. All rent under the Lease shall be adjusted and
apportioned as of the Closing Date.
(B) OTHER PRORATIONS. All other charges and fees customarily
prorated and adjusted in similar transactions in the locale in which the
Property is situated shall be prorated as of the Closing Date in accordance with
such custom.
In the event that accurate prorations and other adjustments cannot
be made as of the Closing Date because current bills or statements are not
obtainable (as, for example, utility bills), the parties shall prorate and pay
their respective shares of such within 15 days after receipt of the final xxxx
of statement, but in no event later than sixty (60) days after Closing. The
Seller shall use its best efforts to have all utility meters read on the Closing
Date so as accurately to determine the proration of current utility bills.
ARTICLE III: IHS STOCK
3.1 IHS STOCK . As set forth in this Agreement, a portion of the
Purchase Price shall be payable by means of the delivery of shares of IHS Stock.
Such deliveries shall be made in accordance with the following:
(A) SHARE VALUE. Whenever shares of IHS Stock are to be
delivered pursuant to this Agreement, the number of shares of IHS Stock shall be
valued as of the applicable date of determination by using the average closing
New York Stock Exchange ("NYSE") price of IHS Stock for the twenty (20) trading
day period ending on the date which is two (2) trading days prior to the
applicable date of determination.
(B) REGISTRATION RIGHTS.
(I) IHS will use its best efforts to cause to be prepared,
filed and declared effective by the Securities and Exchange Commission (the
"COMMISSION"), within one hundred and twenty (120) days following the Closing
Date, a registration statement (a "REGISTRATION STATEMENT") for the registration
of the shares of IHS Stock issued to Seller at Closing, under the Securities Act
of 1933, as amended (the "SECURITIES ACT"), and IHS shall maintain the
effectiveness of such registration statement for a period of one (1) year
following the Closing Date, or until Seller shall no longer own any of the
shares of IHS Stock issued at Closing pursuant to this Agreement, whichever
shall occur first, in each case except to the extent that an exemption from
registration may be available.
5
(II) IHS will use its best efforts to cause to be prepared,
filed and declared effective by the Commission, within one hundred and twenty
(120) days following the issuance of any shares of IHS Stock pursuant to the
Note ("NOTE SHARES"), a Registration Statement for the registration of such Note
Shares, under the Securities Act, and IHS shall maintain the effectiveness of
such registration statement for a period of one (1) year following the date of
such issuance, or until Seller shall no longer own any of such Note Shares,
whichever shall occur first, in each case except to the extent that an exemption
from registration may be available.
(C) REGISTRATION EXPENSES. Seller shall not be responsible
for, and IHS shall bear, all of the reasonable expenses of IHS related to such
registration including, without limitation, the fees and expenses of its counsel
and accountants, all of its other costs, fees and expenses incident to the
preparation, printing, registration and filing under the Securities Act of the
Registration Statement and all amendments and supplements thereto, the cost of
furnishing copies of each preliminary prospectus, each final prospectus and each
amendment or supplement thereto to underwriters, dealers and other purchasers of
IHS Stock and the costs and expenses (including fees and disbursements of its
counsel) incurred in connection with the qualification of IHS Stock under the
Blue Sky laws of various jurisdictions. IHS, however, shall not be required to
pay or incur underwriter's or brokerage discounts, commissions or expenses, or
to pay or incur any costs and expenses in excess in the aggregate of $20,000 for
Blue Sky qualifications of any shares of Seller's IHS Stock, or to pay or incur
any costs or expenses arising out of Seller's failure to comply with its
obligations under this Article III, or to pay or incur any costs or expenses
arising out of the inclusion of any transferee of Seller in any Registration
Statement.
(D) RESALE LIMITATIONS. Seller hereby covenants with IHS that
all resales of IHS Stock issued pursuant to this Agreement shall be effected
solely through Xxxxxxx Xxxxx Barney, Inc., as broker.
(E) REGISTRATION PROCEDURES, ETC. In connection with the
registration rights granted to the Seller with respect to the shares of IHS
Stock as provided in this Section 3.1, IHS covenants and agrees as follows:
(I) IHS will promptly notify the Seller at any time when a
prospectus relating to any Registration Statement is required to be delivered
under the Securities Act, of the happening of any event known to IHS as a result
of which the prospectus included in the Registration Statement, as then in
effect, includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing.
(II) IHS shall furnish the Seller with such number of
prospectuses asshall reasonably be requested by Seller in connection with any
actual or contemplated resales.
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(III) Subject to the ultimate sentence in Section 3.1(c)
above, IHS shall take all necessary action which may be required in qualifying
or registering shares of IHS Stock included in any Registration Statement for
offering and resale under the securities or Blue Sky laws of such states as
reasonably are requested by the Seller provided that IHS shall not be obligated
to qualify as a foreign corporation or dealer to do business under the laws of
any such jurisdiction.
(IV) The information included or incorporated by reference
in the Registration Statements will not, at the time such Registration
Statements become effective, contain any untrue statement of a material fact, or
omit to state any material fact required to be stated therein as necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading or as necessary to correct any statement in any
earlier filing of such Registration Statements or any amendments thereto. The
Registration Statements will comply in all material respects with the provisions
of the Securities Act and the rules and regulations thereunder. IHS shall
indemnify the Seller and each person, if any, who controls the Seller within the
meaning of ss.15 of the Securities Act or ss.20(a) of the Securities Exchange
Act of 1934, as amended (the "EXCHANGE ACT"), against all loss, claim, damage,
expense or liability (including all expenses reasonably incurred in
investigating, preparing or defending against any claim whatsoever) to which any
of them may become subject under the Securities Act, the Exchange Act or any
other statute, common law or otherwise, arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in any of
such Registration Statements executed by IHS or based upon written information
furnished by IHS filed in any jurisdiction in order to qualify IHS Stock under
the securities laws thereof or filed with the Commission, any state securities
commission or agency, NYSE or any securities exchange; or the omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to IHS or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the statements
contained therein not misleading, unless such statement or omission was made in
reliance upon and in conformity with written information furnished to IHS by the
Seller for use in any Registration Statement (it being understood that IHS may
rely on the representations and warranties of the Group Members made pursuant to
this Agreement in preparing the Registration Statement), any amendment or
supplement thereto or any application, as the case may be. If any action is
brought against the Seller or any controlling person of the Seller in respect of
which indemnity may be sought against IHS pursuant to this subsection
3.1(e)(iv), such person shall within thirty (30) days after the receipt thereby
of a summons or complaint, notify IHS in writing of the institution of such
action and IHS shall assume the defense of such action, including the employment
and payment of reasonable fees and expenses of counsel (reasonably satisfactory
to the Seller or such controlling person). Seller or such controlling person
shall have the right to employ her, his, its or their own counsel in any such
case, but the fees and expenses of such counsel shall be at the expense of
Seller or such controlling person unless (A) the employment of such counsel
shall have been authorized in writing by IHS in connection with the defense of
such action, or (B) IHS shall not have employed counsel to have charge of the
defense of such action within fifteen (15) days of the date of its receipt of
written request therefor referencing the consequences of failure to timely
7
retain such counsel as set forth in this clause (iv), or (C) such indemnified
party or parties shall have reasonably concluded and notified IHS that there may
be defenses available to her, him, it or them which are different from or
additional to those available to IHS (in which case, IHS shall not have the
right to direct the defense of such action on behalf of the indemnified party or
parties), in any of which events the fees and expenses of not more than one
additional firm of attorneys for the Seller and/or such controlling persons
shall be borne by IHS.
(V) The Seller, and its successors and assigns, shall
indemnify IHS, its officers and directors and each person, if any, who controls
IHS within the meaning of ss.15 of the Securities Act or ss.20(a) of the
Exchange Act against all loss, claim, damage, expense and liability (including
all expenses reasonably incurred in investigating, preparing or defending
against any claim whatsoever) to which any of them may become subject under the
Securities Act, the Exchange Act or any other statute, common law or otherwise
(Federal, State, local or otherwise), arising from information furnished (or
required to be furnished in accordance with this Agreement) by or on behalf of
any of the Group Members, or any of their successors or assigns for inclusion in
the Registration Statement, any Exchange Act filing or any State Blue Sky Law
filing.
(F) NOTICE OF SALE. Seller shall not resell or otherwise
transfer any interest in any of the shares of IHS Stock issued to Seller
pursuant to this Agreement unless Seller shall have complied with all of his,
her or its obligations under this Agreement and except in the case of proposed
sales solely pursuant to an effective Registration Statement, unless Seller
shall have given prior notice to IHS, describing in reasonable detail Seller's
intention to effect the transfer and the manner of the proposed transfer. If the
transfer is to be pursuant to an effective Registration Statement as provided
herein, Seller will resell only in compliance with the disclosure therein and
discontinue any offers and sales thereunder upon notice from IHS to the Sellers
that the Registration Statement relating to the shares of IHS Stock being
transferred is not "current" until IHS gives further notice that offers and
sales may be recommenced. In the event of any such notice from IHS, IHS agrees
to file expeditiously such amendments to such Registration Statement as may be
necessary to bring it current during the period specified in this Section 3.1
and to give prompt notice to Seller when the Registration Statement has again
become current. If Seller delivers to IHS an opinion of counsel reasonably
acceptable to IHS and its counsel in form and substance reasonably acceptable to
them and to the effect that the proposed transfer of shares of IHS Stock may be
made without registration under the Securities Act and all applicable state
securities laws, Seller will, subject to Section 3.1(d) above, be entitled to
transfer said shares of IHS Stock in accordance with the terms of the notice and
opinion of their counsel.
(G) CONDITIONS. It shall be a condition precedent to the
obligations of IHS to take any action pursuant to this Article III that the
Seller shall furnish to the IHS such information regarding itself, the shares of
IHS Stock held by it, and the intended method of disposition of such securities
as shall be required to effect the registration of their shares of IHS Stock or
as otherwise shall reasonably be requested by IHS. In that connection, Seller
shall be required to represent and warrant to IHS that all such information
which is given is both complete
8
and accurate in all material respects. It also shall be a condition precedent to
the obligations of IHS to take any action pursuant to this Article III that the
Seller shall deliver to IHS a statement in writing that it bona fide intends to
resell, transfer or otherwise dispose of the shares of IHS Stock. Seller will
promptly notify IHS at any time when a prospectus relating to a Registration
Statement covering Seller's shares under this Section 3.1 is required to be
delivered under the Securities Act, of the happening of any event known to
Seller as a result of which the prospectus included in such Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the circumstances under
which such statements are made.
(H) INVESTMENT REPRESENTATIONS. All shares of IHS Stock to be
issued hereunder will be newly issued shares of IHS. Seller represents and
warrants to IHS that the IHS Stock being issued hereunder is being acquired, and
will be acquired, by the Seller for investment for 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 or any applicable state securities law; the Seller
acknowledges that the shares of IHS Stock issued to it pursuant to this
Agreement constitute restricted securities under Rule 144 promulgated by the
Commission pursuant to the Securities Act, and may have to be held indefinitely,
and the Seller agrees that no shares of IHS Stock issued to it pursuant to this
Agreement may be sold, transferred, assigned, pledged or otherwise disposed of
except pursuant to an effective registration statement or an exemption from
registration under the Securities Act, the rules and regulations thereunder, and
under all applicable state securities laws. The Seller represents and warrants
that it has the knowledge and experience in financial and business matters, is
capable of evaluating the merits and risks of the investment, is able to bear
the economic risk of such investment, and is an accredited investor within the
meaning of Regulation D promulgated pursuant to the Securities Act. The Seller
represents and warrants that it has had the opportunity to make inquiries of and
obtain from representatives and employees of IHS such other information about
IHS as he, she or it deems necessary in connection with such investment.
(I) LEGEND. It is understood that, prior to resale of any
shares of IHS Stock pursuant to an effective Registration Statement pursuant to
subsection (e) above, the certificates evidencing such shares of IHS Stock shall
bear the following (or a similar) legend (in addition to any legends which may
be required in the opinion of IHS's counsel by the applicable securities laws of
any state), and upon resale of such shares pursuant to such an effective
registration, new certificates shall be issued for the shares sold without such
legends except as otherwise required by law:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933. THE SHARES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT FOR THESE SHARES UNDER THE
SECURITIES ACT OF 1933 OR AN OPINION OF THE COMPANY'S COUNSEL THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT.
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(J) CERTAIN TRANSFEREES. Except in the case of any transfer of
any shares of IHS Stock issued pursuant to this Agreement to a person in an open
market transaction subsequent to the effective date of, and pursuant to, a
Registration Statement covering such shares of IHS Stock, Seller shall not
transfer any such shares of IHS Stock to any person or entity unless such
transferee shall have agreed in a writing, in form and substance satisfactory to
IHS, to be bound by the provisions applicable to the Seller under this Article
III and such transfer shall be made in accordance with all applicable Federal
and state securities laws as set forth in subsection (g) above and otherwise in
accordance with this Article III.
ARTICLE IV: THE CLOSING
4.1 THE CLOSING . The closing of the transactions contemplated
by this Agreement (the "CLOSING") shall take place pursuant to escrow
arrangements, reasonably satisfactory to the parties hereto, when all conditions
to the Closing are satisfied, including, without limitation, receipt of all
necessary regulatory approvals in connection with the transactions contemplated
by this Agreement, but in any event, no later than June 30, 1998, subject to
extension until July 31, 1998 at the discretion of IHS, if all of such
conditions shall not then have been satisfied (the "CLOSING DATE").
ARTICLE V: REPRESENTATIONS AND WARRANTIES OF GROUP MEMBERS
The Group Members, jointly and severally (except as otherwise
hereinafter expressly provided), represent and warrant to Buyer and IHS as
follows, provided, however, that the representations and warranties contained in
Sections 5.1, 5.2, 5.3, 5.4 and 5.5 are made severally by each Group Member with
respect to itself, himself or herself only and provided further, that the Group
Members jointly and severally, make such representations and warranties with
respect to Seller.
5.1 ORGANIZATION AND STANDING .
(A) Each Group Member that is a corporation is duly
organized, validly existing and i n good standing under the laws of its state of
incorporation. Copies of its Articles of Incorporation and By-Laws, and all
amendments thereof to date (the "CORPORATE DOCUMENTS"), have been delivered to
Buyer and are complete and correct. Each such Group Member has the power and
authority to own the property and assets now owned by it and to conduct the
business presently being conducted by it and to enter into this Agreement and
each of the Transaction Documents (as defined below in Section 5.2) to which it
is a party and to perform its obligations hereunder and thereunder. Each such
Group Member is qualified to do business as a foreign corporation in each state
where the ownership of its assets or the conduct of its business would make such
qualification necessary.
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(B) Each Group Member that is a limited liability company
is duly organized, validly existing and in good standing under the laws of its
state of formation. Copies of it Certificate of Formation and Operating
Agreement, and all amendments thereof to date (the "LIMITED LIABILITY COMPANY
Documents"), have been delivered to Buyer and are complete and correct. Each
such Group Member has the power and authority to own the property and assets now
owned by it and to conduct the business presently being conducted by it and to
enter into this Agreement and each of the Transaction Documents to which it is a
party and to perform its obligations hereunder and thereunder. Each such Group
Member is qualified to do business as a foreign limited liability company in
each state where the ownership of its assets or the conduct of its business
would make such qualification necessary.
(C) Each Group Member that is a limited partnership is
duly organized, validly existing and in good standing under the laws of its
state of organization. Copies of it Limited Partnership Certificate and Limited
Partnership Agreement, and all amendments thereof to date (the "LIMITED
PARTNERSHIP DOCUMENTS", and together with the Corporate Documents and the
Limited Liability Company Documents, the "GOVERNING DOCUMENTS"), have been
delivered to Buyer and are complete and correct. Each such Group Member has the
power and authority to own the property and assets now owned by it and to
conduct the business presently being conducted by it and to enter into this
Agreement and each of the Transaction Documents to which it is a party and to
perform its obligations hereunder and thereunder. Each such Group Member is
qualified to do business as a foreign limited partnership in each state where
the ownership of its assets or the conduct of its business would make such
qualification necessary.
(D) Each Group Member that is an individual is of legal
age and otherwise has the capacity to enter into this Agreement and the
Transaction Documents to which he is a party, and is doing so by his own free
act of volition.
5.2 AUTHORITY . Each Group Member that is not an individual has
the full power and authority to make, execute, deliver and perform this
Agreement (including all Schedules and Exhibits hereto), and all other
agreements, instruments, certificates and documents required or contemplated
hereby or thereby (collectively "TRANSACTION DOCUMENTS") to be executed or
delivered by it, and to consummate all of the transactions contemplated hereby
and thereby. The execution, delivery, performance and consummation of this
Agreement and the Transaction Documents have been duly authorized by all
necessary action, corporate, limited liability company, limited partnership or
otherwise, on the part of such Group Member, and all necessary consents of
holders of indebtedness of such Group Member to the transactions contemplated by
this Agreement have been obtained.
5.3 BINDING EFFECT . This Agreement and all Transaction Documents
constitute the legal, valid and binding obligations of each Group Member that is
a party thereto, enforceable against such Group Member in accordance with their
respective terms.
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5.4 ABSENCE OF CONFLICTING AGREEMENTS . Neither the execution or
delivery by any Group Member of this Agreement or any of the Transaction
Documents nor the performance by any Group Member of the transactions
contemplated hereby and thereby, conflicts with, or constitutes a breach of or a
default under (A) such Group Member's Governing Documents; (B) except for the
Required Approvals, any judgment, order, writ, injunction, decree, statute, law,
rule, regulation, directive, mandate, ordinance or guideline ("GOVERNMENTAL
REQUIREMENTS") of any Federal, state, local or other governmental or
quasi-governmental agency, bureau, board, council, administrator, court,
arbitrator, commission, department, instrumentality, body or other authority
("GOVERNMENTAL AUTHORITIES") applicable to it, him or her or the ownership of
any of the Property, or (C) any agreement, indenture, contract or instrument to
which any Group Member is now a party or by which any of them or any of their
respective assets is bound.
5.5 CONSENTS . No authorization, consent, approval, license,
exemption by filing or registration with any Governmental Authority is or will
be necessary for any Group Member to obtain in connection with it, his or her
entry into, execution, delivery and performance of this Agreement, any of it,
his or her Transaction Documents, or for the consummation of the transactions
contemplated hereby and thereby.
5.6 TITLE TO PERSONAL PROPERTY . Except for the rights granted to
the Lessee under the Lease, Seller has good and marketable title to all Personal
Property subject to no liens, claims, security interests, mortgages, pledges,
charges, easements, rights of set off, restraints on transfers, restrictions on
use, options, or encumbrances of any kind or nature whatsoever ("ENCUMBRANCES"),
other than Permitted Encumbrances. Except for Lessee's rights pursuant to the
Lease, no other person has any right to the use or possession of any of Personal
Property and, except as set forth on Schedule 5.6, Seller has not signed any
security agreement authorizing or granting a security interest in and to the
Personal Property.
5.7 CONTRACTS . Except for the Lease, there is no agreement,
lease, contract, instrument or commitment relating to the Property or to which
the Seller is a party or by which the Seller or any of the Property is bound. A
true, complete and correct copy of the Lease has been delivered to Buyer. The
Lease was entered into and requires performance in the ordinary course of
business and is in full force and effect. The Seller is not in default under the
Lease and there has not been asserted, either by or against the Seller under the
Lease, any notice of default, set-off or claim of default. Except as set forth
on Schedule 5.7, to the knowledge of the Group Members, the Lessee is not in
default of any of its obligations under the Lease, and there has not occurred
any event which with the passage of time or the giving of notice (or both) would
constitute a default or breach under the Lease. Except as set forth in Schedule
5.7, all amounts payable or receivable under the Lease are, and will at the
Closing Date, be on a current basis. Except as set forth in Schedule 5.7, the
assignment of the Lease and the transactions contemplated by this Agreement will
not require consent under the Lease.
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5.8 TITLE, CONDITION OF THE REAL PROPERTY .
(A) Other than the mortgages described on the title
insurance commitment heretofore delivered to Buyer, which mortgages shall be
satisfied and released in a manner satisfactory to Buyer prior to Closing,
Seller has good and marketable fee simple title to the Real Property, free and
clear of all Encumbrances and title exceptions of any kind whatsoever except for
the title exceptions set forth on Schedule 5.8(a) and for the Lease (the
"PERMITTED ENCUMBRANCES").
(B) Except for the Lease, there are no leases or other
agreements of Seller as lessor or licensor, granting any third party the right
to use or occupy any of the Property (except for rights granted by Lessee as
lessee under the Lease, such as the rights of the patients of the Facility) and
no person, firm or entity has any ownership interest or option or right of first
refusal to acquire any ownership interest in any or all of the Real Property.
(C) Seller has delivered to Buyer copies of any notice of
violation of any Governmental Requirement affecting the Real Property issued to,
or received by, Seller from any Governmental Authority.
(D) Seller has not received any notice of any plan, study
or effort by any Governmental Authority which in any way affects or would affect
the present use or zoning of the Real Property or any part thereof. Seller has
not received any notice of any assessments or proposed assessments or proposed
or contemplated plan to widen, modify or realign any street or highway or any
existing, proposed or contemplated eminent domain proceedings that would affect
the Real Property in any way whatsoever. No subdivision plan or plans
(preliminary or otherwise) have been or will be filed by Seller with respect to
the Real Property.
(E) There is no proceeding pending to which Seller is a
party relating to the assessed valuation of any portion of the Real Property,
and Seller has not received any assessment for public improvements against the
Real Property that remains unpaid or unperformed.
(F) Seller has not received any notice of noncompliance
from any Governmental Authority regarding any of the Improvements or the use or
occupancy thereof.
Except to the extent that Lessee shall be liable therefor under the Lease,
to the best of Seller's knowledge, the Improvements and all of their systems,
and the Fixtures, including without limitation, the heating, ventilating and air
conditioning systems, and the plumbing, electrical, mechanical and drainage
systems, and roofs are in good operating condition, repair and working order
(except for normal wear and tear that has not had a material adverse effect on
the condition thereof), and have passed all previous safety and/or licensing
inspections.
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5.9 LEGAL PROCEEDINGS . There are no disputes, claims, actions,
suits or proceedings, arbitrations or investigations, either administrative or
judicial, to which Seller is a party or is subject, pending, or, to the
knowledge of the Group Members, threatened or contemplated, nor, to the
knowledge of the Group Members, is there any basis therefor, against or
affecting any of the Property or Seller's rights therein or Seller's ability to
consummate the transactions contemplated herein, at law or in equity or
otherwise, before or by any Governmental Authority. Seller has received no
written requests for information with respect to the transactions contemplated
hereby from any Governmental Authority.
5.10 COMPLIANCE WITH LAWS .
(A) Except to the extent that Lessee shall be liable
therefor under the Lease, to the best of Seller's knowledge, Seller is in
compliance with all Governmental Requirements applicable to it or the Property.
The Seller has not received any claim or notice that any of the Property is not
in compliance with any applicable Governmental Requirement. The Group Members
shall report to Buyer, within five (5) days after receipt thereof, any written
or oral claims or notices that any of the Property is not in compliance with any
of the foregoing.
(B) Except to the extent the Lessee shall be liable therefor
under the Lease, at all times, to the best of Seller's knowledge, Seller has
complied, and is complying in all respects with all environmental and related
Governmental Requirements applicable to it and the Property, including, but not
limited to, the Resource Conservation and Recovery Act of 1976, as amended, the
Comprehensive Environmental Response Compensation and Liability Act of 1980, as
amended, the Federal Water Pollution Control Act, as amended by the Clean Water
Act, and subsequent amendments, the Federal Toxic Substances Control Act, as
amended, with respect to the environmental or healthful state, condition or
quality of any property (collectively "ENVIRONMENTAL LAWS"). The foregoing
representation and warranty applies to all aspects of the use and ownership of
the Property including, but not limited to, the use, handling, treatment,
storage, transportation and disposal of any hazardous, toxic or infectious
waste, material or substance (including medical waste), and to petroleum
products, material or waste whether performed on Property, or at any other
location. No notice from any Governmental Authority has ever been served upon
the Seller, or any of its agents or representatives claiming any violation of
any Environmental Law, or requiring or calling attention to the need for any
work, repairs, or demolition, on or in connection with any of such properties in
order to comply with any Environmental Law.
5.11 FINDERS . No broker or finder has acted for any Group Member
in connection with the transactions contemplated by this Agreement, and no
broker or finder is entitled to any broker's or finder's fee or other commission
in respect thereof based in any way on agreements, understandings or
arrangements with any Group Member.
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5.12 TAX RETURNS . Seller has filed all Federal, state, county and
local real estate and personal property, and other tax returns and abandoned
property reports (if any) to date that are due and required to be filed by it
prior to the date hereof, and there are no claims, liens, or judgments for taxes
due and payable prior to the date hereof from Seller affecting any of the
Property, and no basis for any such claim, lien, or judgment exists.
5.13 ENCUMBRANCES CREATED BY THIS AGREEMENT . The execution and
delivery of this Agreement and any of Transaction Documents does not, and the
consummation of the transactions contemplated hereby or thereby will not, create
any Encumbrances on any of the Property in favor of third parties.
5.14 EQUITY HOLDERS . Schedule 5.14 sets forth all of the
outstanding percentage interests in the Seller, and the holders thereof.
Schedule 5.14 also sets forth all of the outstanding membership interests and
outstanding shares of capital stock in each of the partners of the Seller and
the holders thereof.
ARTICLE VI: REPRESENTATIONS AND WARRANTIES OF IHS AND BUYER
IHS and Buyer jointly and severally represent and warrant to
Seller as follows:
6.1 ORGANIZATION AND STANDING . Each of IHS and Buyer is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware.
6.2 POWER OF AUTHORITY . Each of IHS and Buyer has the corporate
power and authority to execute, deliver and perform this Agreement, and as of
the Closing, each of IHS and Buyer will have the corporate power and authority
to execute and deliver the Transaction Documents required to be executed and
delivered by them to the Seller at the Closing.
6.3 BINDING AGREEMENT . This Agreement has been duly executed and
delivered by IHS and Buyer. This Agreement is, and when executed and delivered
by Buyer and IHS at the Closing, each of the Transaction Documents executed by
Buyer and IHS will be, the legal, valid and binding obligation of Buyer and IHS,
enforceable against Buyer and IHS in accordance with their respective terms.
6.4 SEC DOCUMENTS . IHS has furnished the Group Members with a
correct and complete copy of its report on Form 10-K for its fiscal years ended
December 31, 1997 (the"10-K"), its report on Form 10-Q for its fiscal quarter
ended March 31, 1998 (the"10-Q"), and its proxy statement prepared in connection
with its annual meeting held on May 22, 1998 (the "PROXY STATEMENT"). As of
their respective dates, none of the 10-K, 10-Q, and Proxy Statement and any
press release or other schedule or report required by IHS to be publicly
disclosed or filed with the Securities and Exchange Commission (the "SEC")
pursuant to the Exchange Act since January 1, 1998 (all of the foregoing being
the "SEC DOCUMENTS") contained any untrue statements, or
15
omitted to make any disclosures, which, in light of the circumstances would
render any of such documents materially misleading, and the SEC Documents
complied when filed in all material respects with the then applicable
requirements of the Exchange Act, and the rules and regulations promulgated by
the Commission thereunder.
6.5 ABSENCE OF CONFLICTING AGREEMENTS . Neither the execution or
delivery of this Agreement and, as of the Closing Date, the execution and
delivery of the Transaction Documents, by Buyer or IHS nor the performance by
Buyer or IHS of the transactions contemplated hereby and thereby conflicts with,
or constitutes a breach of or a default under (A) the Certificate of
Incorporation or By-laws of Buyer or IHS, or (b) any Governmental Requirement
applicable to Buyer or IHS, or (d) any agreement, indenture, contract or
instrument to which the Buyer or IHS is now a party or by which any of the
assets of Buyer or IHS is bound.
6.6 CONSENTS . Except as set forth on Schedule 5.5, no
authorization, consent, approval, license, exemption by, filing or registration
with any Governmental Authority, is or will be necessary in connection with the
execution, delivery and performance of this Agreement or any of the Transaction
Documents by Buyer or IHS.
6.7 CAPITAL STOCK . IHS has duly authorized and reserved for
issuance the IHS Stock, and, when issued in accordance with the terms of Article
III, the IHS Stock will be validly issued, fully paid, and nonassessable and
free of preemptive rights.
6.8 FINDERS . No broker or finder has acted for Buyer or IHS in
connection with the transactions contemplated by this Agreement, and no broker
or finder is entitled to any broker's or finder's fee or other commission in
respect thereof based in any way on agreements, understandings or arrangements
with Buyer or IHS.
ARTICLE VII: INFORMATION AND RECORDS CONCERNING THE FACILITY
7.1 MAPS, PLANS, SURVEYS, ETC . As promptly as possible after the
date hereof, Seller shall deliver, or cause to be delivered, to Buyer, without
charge, copies of all plans, maps, surveys, descriptions, title reports and
certificates of occupancy respecting the Property and the use and occupancy
thereof in Seller's possession or under Seller's control that exist as of the
date of this Agreement, which materials shall be returned to Seller if this
Agreement is terminated. Prior to the Closing Date, Buyer may make, or cause to
be made, such investigation of the condition of the Seller and the Property as
Buyer deems necessary or advisable to familiarize itself therewith. The Group
Members shall permit Buyer and its authorized representatives (including legal
counsel, accountants and investigating agencies), to have full access to the
books and records of the Seller upon reasonable notice and during normal
business hours, and the Company will furnish, or cause to be furnished, to Buyer
such financial and operating data and other information and copies of documents
with respect to the Property as Buyer shall from time to time reasonably
request. The Seller shall cause its accountants to cooperate with Buyer.
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ARTICLE VIII: OBLIGATIONS OF THE PARTIES UNTIL CLOSING
8.1 NEGATIVE COVENANTS OF THE PARTIES . Without the prior written
approval of Seller or Buyer, as the case may be, neither Buyer nor Seller shall,
between the date hereof and the Closing, perform, take or fail to take any
action or incur or permit to exist any of the acts, transactions, events or
occurrences of a type which would have been inconsistent with the
representations, warranties and covenants made by it as set forth in this
Agreement had the same occurred prior to the date hereof.
8.2 AFFIRMATIVE COVENANTS . Between the date hereof and the
Closing, Seller shall comply with all provisions of the Contracts, including
without limitation, payment of all amounts coming due thereunder, and shall not
modify, amend, terminate or supplement any of same.
8.3 PURSUIT OF CONSENTS AND APPROVALS . Prior to the Closing,
Buyer and Seller jointly shall diligently undertake to obtain all Required
Approvals.
8.4 EXCLUSIVITY . Until the earlier of the Closing Date or the
termination of this Agreement pursuant to Section 12.1, no Group Member, nor any
of their respective affiliates, shall solicit or entertain any offers or engage
in any discussions or negotiations or enter into any agreement or letter of
intent directly or indirectly with any other party in respect of the sale of any
of the Property or of any of the equity in the Seller (any of said transactions
being referred to herein as a "PROHIBITED TRANSACTION"). The Group Members shall
promptly advise Buyer of any offer or solicitation that it receives for a
Prohibited Transaction, including, without limitation, the name of the person
making such offer or solicitation and the terms of such offer or solicitation.
ARTICLE IX: CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER AND IHS
Unless expressly waived by Buyer in writing and IHS, their
respective obligations to consummate the transactions contemplated by this
Agreement are subject to the satisfaction, prior to or at the Closing, of each
of the following conditions. Upon failure of any of the following conditions
Buyer or IHS may terminate this Agreement pursuant to and in accordance with
Article XII herein.
9.1 REPRESENTATIONS AND WARRANTIES . The representations and
warranties of the Group Members made pursuant to this Agreement shall be true
and correct in all material respects at and as of the Closing Date as though
such representations and warranties were made at and as of such time.
9.2 PERFORMANCE OF COVENANTS . Each Group Member shall have
performed or complied with each agreement, covenant and obligation required by
this Agreement to be performed or complied with by such Group Member prior to or
at the Closing.
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9.3 DELIVERY OF CLOSING CERTIFICATE . The Group Members shall have
executed and delivered to Buyer and IHS a certificate dated the Closing Date
upon which they may rely, certifying that the conditions set forth in Sections
9.1 and 9.2 have been satisfied as of the Closing Date.
9.4 LEGAL MATTERS . No suit, action, investigation, or legal or
administrative proceeding shall have been brought or shall have been threatened
by any person that questions the validity or legality of this Agreement or the
consummation of the transactions contemplated hereby.
9.5 APPROVALS .
(A) The consent or approval of all Government Authorities
necessary for the consummation of the transactions contemplated hereby (the
"REQUIRED APPROVALS") shall have been granted.
(B) None of the foregoing Required Approvals (i) shall have
been conditioned upon the modification, cancellation or termination of any
material lease, contract, commitment, agreement, license, easement, right or
other authorization with respect to the Property or the Facility, or (ii) shall
impose on Buyer or IHS any material condition or provision or requirement with
respect to the Property or the Facility or its operation that is more
restrictive than or different from the conditions imposed upon such operation
prior to Closing.
9.6 TITLE INSURANCE . Buyer shall have obtained, at its expense,
at normal rates, a title commitment from a reputable title insurance company
selected by Buyer (the "TITLE COMPANY") for an owner's title policy (owner's
ALTA Policy Form B, as amended 10/17/70), insuring that title to the Real
Property shall be in fee simple and shall be good and marketable and free and
clear of all Encumbrances or rights of use or possession and other title
objections (including any lien or future claim from materials or labor supplied
for improvement of such property), except for Permitted Encumbrances; provided,
however, that, at the request of Buyer, Seller shall provide such affidavits and
standard indemnities to the Title Company and take such other reasonable actions
that would enable the Title Company to remove any standard exceptions included
as Permitted Encumbrances, but shall not be required to pay any premium or incur
any out-of-pocket expense to do so. Seller shall, if required by the
aforementioned title insurance company in connection with the issuance of the
aforementioned owner's title policy, have executed a gap indemnity agreement in
a form acceptable to such title insurance company. With respect to the standard
survey exceptions, Buyer may obtain prior to the Closing a survey, at Buyer's
expense, but if such survey (or study) discloses any Encumbrance that is not a
Permitted Encumbrance, Buyer may consider such a defect in title and may, at its
option, elect to cancel this Agreement pursuant to Section 12.1 hereof. In
addition to such title policy, Buyer, at its expense, must receive a zoning
opinion or report in form and substance reasonably satisfactory to it.
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9.7 DEED . Seller shall have executed and delivered to Buyer a
special warranty deed for the Real Property with warranty against grantor's acts
in the form of Exhibit 9.7 hereto, and subject only to the Permitted
Encumbrances.
9.8 PROPERTY TRANSFERRED AT CLOSING . Seller shall have delivered
or caused to be delivered to Buyer possession of the Property (or the right to
obtain possession on demand) together with such instruments of sale and
transfer, including without limitation, a Xxxx of Sale in the form of Exhibit
9.8-1 and an Assignment and Assumption of Contracts and Lease in the form of
Exhibit 9.8-2 (the "ASSIGNMENT AGREEMENT"), sufficient to vest in Buyer good and
marketable title to the Personal Property, free and clear of all Encumbrances
other than the Permitted Encumbrances.
9.9 AUTHORIZATION DOCUMENTS . Buyer shall have received a
certificate of the Group Members certifying authorization of their execution,
delivery and full performance of this Agreement and the Transaction Documents,
and certifying a copy of the Certificate of Limited Partnership and Limited
Partnership Agreement of Seller.
9.10 OPINION OF COUNSEL . Seller shall have delivered to Buyer an
opinion dated as of the Closing Date, of counsel to Seller, in the form and
substance attached hereto as Exhibit 9.10(a). Said opinion shall be addressed to
and may be relied upon by Buyer, its counsel, Buyer's lenders and their counsel,
and the Title Company.
9.11 ADDITIONAL ITEMS TO BE DELIVERED . At or prior to the
Closing, Seller shall have delivered the following to Buyer:
(A) all keys to the Improvements in the possession or control
of Seller;
(B) to the extent in the possession or control of Seller, the
originals (if available, otherwise legible and complete photocopies) of all
building permits, certificates of occupancy, zoning certificates and other
governmental permits and licenses required in connection with the ownership,
use, operation or maintenance of the Property;
(C) to the extent they are in the possession or control of
Seller, all architectural, engineering, mechanical, HVAC, electrical and
landscaping plans, drawings, and specifications, including "as built" plans and
specifications for each of the Improvements; and
(D) all other documents, correspondence, files, records,
memoranda, reports and other items within the possession or control of Seller or
its agents or attorneys pertaining to the Property which Buyer or its counsel
may reasonably request.
9.12 INTENTIONALLY OMITTED .
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9.13 CERTAIN REPORTS . Buyer shall have received, at Buyer's
expense, reports from qualified engineers and inspectors approved by Buyer with
respect to the physical condition of the Property and any termite, wood boring
insect or other pest infestation at the Facility, and/or resultant damage that
has not been corrected in all material respects. If any of such reports shall
indicate any matters that would constitute a breach of any representation or
warranty by any Group Member, then the Buyer may terminate this Agreement in
accordance with Section 12.1 hereof. The condition set forth in this Section
9.13 shall be deemed satisfied unless Buyer otherwise notifies Seller on or
prior to June 20, 1998.
9.14 OTHER DOCUMENTS . Seller shall have furnished Buyer with all
other documents, certificates and other instruments required to be furnished to
Buyer by Seller pursuant to the terms hereof, including, without limitation,
assignments of warranties to the extent assignable.
ARTICLE X: CONDITIONS PRECEDENT TO OBLIGATIONS OF GROUP MEMBERS
Unless expressly waived in writing by Seller, the obligation of
the Group Members to consummate the transactions contemplated by this Agreement
is subject to the satisfaction, prior to or at the Closing, of each of the
following conditions:
10.1 REPRESENTATIONS AND WARRANTIES . The representations and
warranties of Buyer and IHS made pursuant to this Agreement shall be true in all
material respects at and as of the Closing Date as though such representations
and warranties were made at and as of such time.
10.2 PERFORMANCE OF COVENANTS . Buyer and IHS shall have performed
or complied with each of its agreements and conditions required by this
Agreement to be performed or complied with by it prior to or at the Closing,
including payment of the Purchase Price.
10.3 DELIVERY OF CLOSING CERTIFICATE . Buyer and IHS shall have
delivered to Seller a certificate of an officer of Buyer and IHS dated the
Closing Date upon which Seller can rely, certifying that the conditions set
forth in Sections 10.1 and 10.2 have been satisfied as of the Closing Date.
10.4 LEGAL MATTERS . No suit, actions, investigation or legal or
administrative proceeding shall have been brought or shall have been threatened
by any person that questions the validity or legality of this Agreement or the
transactions contemplated hereby.
10.5 AUTHORIZATION DOCUMENTS . Seller shall have received a
certificate of the Secretary or other officer of Buyer and IHS certifying a copy
of resolutions of the Board of Directors of Buyer and IHS authorizing the
execution and full performance by Buyer and IHS of this Agreement and the
Transaction Documents and the incumbency of the officers of Buyer and IHS.
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10.6 OPINION OF COUNSEL . Buyer and IHS shall have delivered to
Seller an opinion, dated as of the Closing Date, of counsel to Buyer and IHS, in
the form and substance attached hereto as Exhibit 10.6.
10.7 OTHER DOCUMENTS . Buyer and IHS shall have furnished Seller
with all documents, certificates and other instruments required to be furnished
to Seller by Buyer or IHS pursuant to the terms hereof.
ARTICLE XI: OBLIGATIONS OF PARTIES AFTER CLOSING
11.1 DISCHARGE OF LIABILITIES . Seller shall pay all of its
liabilities and obligations (other than Assumed Liabilities), if any, with
respect to the Property as and when the same shall become due and payable.
11.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES . All
representations and warranties made by each party in this Agreement and in each
Schedule and Transaction Document shall survive until the second anniversary of
the Closing Date notwithstanding any investigation at any time made by or on
behalf of the other party.
11.3 INDEMNIFICATION BY GROUP MEMBERS . The Group Members, jointly
and severally, shall indemnify and defend Buyer and IHS and each of their
respective officers, directors, agents, employees and advisors, and their
respective successors and assigns ("BUYER INDEMNITEES") and hold each of them
harmless against and with respect to any and all damage, loss, liability,
deficiency, cost and expense (including, without limitation, reasonable
attorney's fees and expenses) (all of the foregoing hereinafter collectively
referred to AS "LOSS") resulting from or arising out of:
(A) any inaccuracy in any representation, or breach of any
warranty or certification, made by any Group Member pursuant to this Agreement;
(B) the breach of any covenant, obligation or undertaking
by any Group Member made pursuant to this Agreement;
(C) any Unassumed Liability; or
(D) any action, suit, proceeding, demand, assessment,
judgment, settlement (to the extent approved by the Seller, such approval not to
be unreasonably withheld, delayed or conditioned), cost or legal or other
expense alleging or incident to any of the foregoing.
11.4 INDEMNIFICATION BY BUYER AND IHS . Buyer and IHS shall,
jointly and severally, indemnify and defend the Group Members and their
respective partners, officers, directors, employees, advisors and their
respective successors and assigns harmless against and with respect to any and
all Loss resulting from or arising out of:
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(A) any inaccuracy in any representation, or breach of any
warranty or certification, made by Buyer or IHS pursuant to this Agreement;
(B) the breach of any covenant, obligation or undertaking
by Buyer or IHS made pursuant to this Agreement;
(C) any Assumed Liability; or
(D) any action, suit, proceeding, demand, assessment,
judgment, settlement (to the extent approved by Buyer, such approval not to be
unreasonably withheld, delayed or conditioned), cost or legal or other expenses
incident to any of the foregoing.
11.5 ASSERTION OF CLAIMS . Any claims for indemnification under
Section 11.3(a) or 11.4(a) must be asserted by written notice on or prior to the
second anniversary of the Closing Date.
11.6 CONTROL OF DEFENSE OF INDEMNIFIABLE CLAIMS .
(A) Buyer shall give Seller prompt notice of each claim for
which it seeks indemnification. Failure to give such prompt notice shall not
relieve the Group Members of their indemnification obligation, provided that
such indemnification obligation shall be reduced by any damages the Group
Members demonstrate they have suffered resulting from a failure to give prompt
notice hereunder. The Seller shall be entitled to participate in the defense of
such claim. If at any time the Group Members acknowledge in writing that the
claim is fully indemnifiable by them under this Agreement, and, if reasonably
requested by Buyer, post adequate bond or security, they shall have the right to
assume control of the defense of such claim at their own expense; provided,
however, no such bond shall be required if such matter is fully covered by
insurance or is otherwise the obligation of the Lessee.
(B) The Seller shall give Buyer prompt written notice of
each claim for which any Group Member seeks indemnification. Failure to give
such prompt notice shall not relieve the Buyer or IHS of its indemnification
obligation, provided that such indemnification obligation shall be reduced by
any damages Buyer or IHS demonstrates it has suffered resulting from a failure
to give prompt notice hereunder. IHS and the Buyer shall be entitled to
participate in the defense of such claim. If at any time Buyer acknowledges in
writing that the claim is fully indemnifiable by it under this Agreement, and,
if requested by Seller post adequate bond of security, it shall have the right
to assume control of the defense of such claim at its own expense.
(C) Nothing contained in this Section 11.6 shall prevent
either party from assuming total control of the defense and/or settling any
claim against it for which indemnification is not sought under this Agreement.
No party shall settle any claim for which indemnification is sought without the
written consent of the Seller and Buyer, which consent shall not be unreasonably
withheld, delayed or conditioned.
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(D) Any Buyer Indemnitee shall be entitled to, but shall no
be required to, offset any claim made by such Buyer Indemnitee pursuant to this
Agreement against any amount payable under the Note. Buyer shall not be
permitted such offsets if Seller is complying with all of its obligations under
this Section 11.6, provided, however, (i) such matter is covered by insurance
and/or Seller posts a bond or provides other reasonably acceptable security, or
(ii) the remaining balance of the Note is greater than twice the amount claimed,
in which event, Buyer shall be entitled to escrow any scheduled principal
payments pursuant to a commercially reasonable escrow agreement.
(E) If any of the Group Members shall be subject to a
dispute with Buyer or IHS with respect to indemnification rights or matters ,
they shall, unless Buyer elects otherwise in its sole and absolute discretion,
be required to act as a group with respect to any and all rights and obligations
with respect to the resolutions of dispute and Seller shall act as their sole
representative and shall be bound by all actions taken or omitted by Seller on
behalf of any Group Member as provided in this Agreement, and each Group Member
shall be deemed to have received any notice deemed given or payment made to
Seller in accordance with the notice provisions of this Agreement on the date
deemed given or the date paid to Seller and Buyer and IHS shall be entitled to
rely on all notices and consents given, and all settlements entered into on
behalf of any Group Member to the extent authorized pursuant to the terms of
this Agreement notwithstanding any objections made by any Group Member prior to,
concurrently with or subsequent to the giving of any such notice or consent or
the settlement of any such matter.
(F) Upon payment in full by an indemnifying party of any
indemnification claim, whether such payment is effected by setoff or otherwise,
or upon the payment in full by an indemnifying party of any judgment with
respect to a third-party claim, the indemnifying party shall be subrogated (to
the extent permitted by applicable law) to the extent of such payment to the
rights of the indemnified party against any vendors, fee mortgagees, insurance
carrier, workmens' compensation fund, attorneys, title insurance carrier,
engineers, surveyors, environmental inspectors, zoning experts and the other
parties to the Transaction Documents.
ARTICLE XII: TERMINATION
12.1 TERMINATION . This Agreement may be terminated at any time at
or prior to the time of Closing by:
(A) Buyer, if any condition precedent to Buyer's
obligations hereunder, including without limitation those conditions set forth
in Section 2.4 or Article IX hereof, have not been satisfied by the Closing Date
or pursuant to Section 13.1 if any portion of the Property is damaged or
destroyed;
23
(B) Seller, if any condition precedent to Seller's
obligations hereunder, including without limitation those conditions set forth
in Article X hereof, have not been satisfied by the Closing Date; or
(C) the mutual consent of Buyer and Seller.
12.2 EFFECT OF TERMINATION . If a party terminates this Agreement
because one of its conditions precedent has not been satisfied, or if this
Agreement is terminated by mutual consent, this Agreement shall become null and
void without any liability to the terminating party except to the extent that
said terminating party shall have been in breach of this Agreement. If such
termination is by Buyer pursuant to Section 12.1(a) as a result of a breach by
any Group Member of any of its representations, warranties, obligations or
covenants made pursuant to this Agreement, nothing herein shall affect the right
of Buyer and IHS to damages on account of such breach or to elect specific
performance or injunctive relief on account of such breach, and (ii) if such
termination is by Seller pursuant to Section 12.1 (b) as a result of a breach by
Buyer or IHS of any of its representations, warranties, obligations or covenants
in this Agreement, nothing herein shall affect the Group Members' right to
damages on account of such breach.
ARTICLE XIII: CASUALTY, RISK OF LOSS
13.1 CASUALTY, RISK OF LOSS . If at any time prior to the Closing
any portion of the Property is damaged or destroyed as a result of fire, other
casualty or for any reason whatsoever. Buyer shall have the right, in its sole
and absolute discretion, within thirty (30) days of receipt of such notice (and
the scheduled Closing Date shall be correspondingly extended), to (1) elect not
to proceed with the Closing and terminate this Agreement, or (2) proceed to
Closing and consummate the transactions contemplated hereby and receive any and
all insurance proceeds received or receivable by Seller on account of any such
casualty, in which case Buyer shall be deemed to have accepted the Property in
its damaged condition and waived any right to indemnification or other claim due
from Seller with respect to such casualty.
ARTICLE XIV: MISCELLANEOUS PROVISIONS
14.1 PUBLIC ANNOUNCEMENTS . Any general public announcements or
similar media publicity with respect to this Agreement or the transactions
contemplated herein shall be at such time and in such manner as Buyer shall
determine, subject to the reasonable approval of Seller.
14.2 COSTS AND EXPENSES . Except as expressly otherwise provided
in this Agreement, each party hereto shall bear its own costs and expenses in
connection with this Agreement and the transactions contemplated hereby.
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14.3 PERFORMANCE . In the event of a breach by any Group Member of
its, his or her obligations hereunder, Buyer and IHS shall have the right, in
addition to any other remedies which may be available, to obtain specific
performance of the terms of this Agreement, and the Group Members hereby waive
the defense that there may be an adequate remedy at law and any requirement that
Buyer post any bond or security. Should any party default in its performance, or
other remedy, the prevailing party shall be entitled to its reasonable
attorneys' fees.
14.4 BENEFIT AND ASSIGNMENT . This Agreement binds and inures to
the benefit of each party hereto and its successors and proper assigns. Buyer
may assign its rights and interest under this Agreement to any other person or
entity; provided that IHS shall continue to be liable for all of its obligations
hereunder.
14.5 EFFECT AND CONSTRUCTION OF THIS AGREEMENT . This Agreement
and the Exhibits and Schedules hereto embody the entire agreement and
understanding of the parties and supersede any and all prior agreements,
arrangements and understandings relating to matters provided for herein. The
captions used herein are for convenience only and shall not control or affect
the meaning or construction of the provisions of this Agreement. This Agreement
may be executed in one or more counterparts, and all such counterparts shall
constitute one and the same instrument.
14.6 COOPERATION - FURTHER ASSISTANCE . Subject to the terms and
conditions herein provided, each of the parties hereto shall use its best
efforts to take, or cause to be taken, such action, to execute and deliver, or
cause to be executed and delivered, such additional documents and instruments,
and to do, or cause to be done, all things necessary, proper and advisable under
the provisions of this Agreement and under applicable law to consummate and make
effective the transactions contemplated by this Agreement.
14.7 NOTICES . All notices required or permitted hereunder shall
be in writing and shall be deemed to be properly given when personally delivered
to the party or parties entitled to receive the notice or three (3) business
days after sent by certified or registered mail, postage prepaid, or on the
business day after sent by nationally recognized overnight courier, in each
case, properly addressed to the party or parties entitled to receive such notice
at the address stated below:
If to any Group Member,
to the Seller at: Xxxx Xxxxxxxx
0000 Xxxxxxxx Xxxx Xxxxx
Xxxxxxxxxx, XX 00000
with a copy to: Xxxxxx Xxxxxxxxx, Esq.
Xxxxxx Tackabery Xxxxx & Xxxxxxxxx
000 Xxxxx Xxxxxxxxx Xxxx
Xxxxxxx-Xxxxx, XX 00000-0000
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If to the Buyer or IHS: Integrated Health Services, Inc.
00000 Xxx Xxx Xxxxxxxxx
Xxxxxx Xxxxx, XX 00000
Attn: Xxxxxx X. Xxxxx,
Senior Vice President
and
with a copy to: Integrated Health Services, Inc.
00000 Xxx Xxx Xxxxxxxxx
Xxxxxx Xxxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxxx, General Counsel
and
Blass & Xxxxxx, Esqs.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
14.8 WAIVER, DISCHARGE, ETC. This Agreement shall not be released,
discharged, abandoned, changed or modified in any manner, except by an
instrument in writing executed by or on behalf of each of the parties hereto by
its duly authorized officer or representative. The failure of any party to
enforce at any time any of the provisions of this Agreement shall in no way be
construed to be a waiver of any such provision, nor in any way to affect the
validity of this Agreement or any part hereof or the right of any party
thereafter to enforce each and every such provision. No waiver of any breach of
this Agreement shall be held to be a waiver of any other or subsequent breach.
14.9 RIGHTS OF PERSONS NOT PARTIES. Nothing contained in this
Agreement shall be deemed to create rights in persons not parties hereto, other
than the successors and proper assigns of the parties hereto.
14.10 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the state of Florida
applicable to contracts executed, delivered and to be fully performed in the
state of Florida, disregarding any contrary rules relating to the choice or
conflict of laws.
14.11 SEVERABILITY. Any provision, or distinguishable portion of
any provision, of this Agreement which is determined in any judicial or
administrative proceeding to be prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction. To
the extent permitted by applicable law, the parties waive any provision of law
which renders a provision hereof prohibited or unenforceable in any respect.
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IN WITNESS WHEREOF, each of the parties hereto and in the capacity
indicated below has executed this Agreement as of the day and year first above
written.
INTEGRATED HEALTH SERVICES, INC.
By:/s/ Xxxxxx X. Xxxxx
----------------------------------
Title: Xxxxxx X. Xxxxx
-------------------------------
Senior Vice President
INTEGRATED HEALTH SERVICES OF
FLORIDA AT HOLLYWOOD HILLS, INC.
By:/s/ Xxxxxx X. Xxxxx
----------------------------------
Title: Xxxxxx X. Xxxxx
-------------------------------
Senior Vice President
MEDICAL ASSOCIATES IV LIMITED
PARTNERSHIP
By: Hillco PCS (Hialeah) Limited Partnership
Its: General Partner
By: Medical Asset Fund, LLC
Xxxx Xxxxxxxx, Manager
By:
----------------------------------
Xxxx X. Xxxxxxx, Xx., Manager
HILLCO PCS (HIALEAH)
LIMITED PARTNERSHIP
By: Medical Asset Fund, LLC
Its: General Partner
By:
----------------------------------
Its: Manager
MEDICAL ASSET FUND, LLC
27
IN WITNESS WHEREOF, each of the parties hereto and in the capacity
indicated below has executed this Agreement as of the day and year first above
written.
INTEGRATED HEALTH SERVICES, INC.
By:
----------------------------------
Title:
-------------------------------
INTEGRATED HEALTH SERVICES OF
FLORIDA AT HOLLYWOOD HILLS, INC.
By:
----------------------------------
Title:
-------------------------------
MEDICAL ASSOCIATES IV LIMITED
PARTNERSHIP
By: Hillco PCS (Hialeah) Limited Partnership
Its: General Partner
By: Medical Asset Fund, LLC
By: /s/ Xxxx Xxxxxxxx
----------------------------------
Xxxx Xxxxxxxx, Manager
By:/s/ Xxxx X. Xxxxxxx, Xx.
----------------------------------
Xxxx X. Xxxxxxx, Xx., Manager
HILLCO PCS (HIALEAH)
LIMITED PARTNERSHIP
By: Medical Asset Fund, LLC
Its: General Partner
By:/s/ Xxxx X. Xxxxxxx, Xx.
----------------------------------
Its: Manager
MEDICAL ASSET FUND, LLC
By: /s/ Xxxx Xxxxxxxx
----------------------------------
Xxxx Xxxxxxxx, Manager
By:/s/ Xxxx X. Xxxxxxx, Xx.
----------------------------------
Xxxx X. Xxxxxxx, Xx., Manager
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EQUITY HOLDERS:
/s/ Xxxx X. Xxxxxxxx
------------------------------------
Xxxx X. Xxxxxxxx
------------------------------------
Xx. Xxxx X. Xxxxxxx, Xx.
HIALEAH ACQUISITION FUND, L.P.
By:
----------------------------------
Its: General Partner
----------------------------------
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EQUITY HOLDERS:
------------------------------------
Xxxx X. Xxxxxxxx
/s/ Xx. Xxxx X. Xxxxxxx, Xx.
------------------------------------
Xx. Xxxx X. Xxxxxxx, Xx.
HIALEAH ACQUISITION FUND, L.P.
By:/s/ Xxxxxxxx X. Xxxxxxx
----------------------------------
Its: General Partner
28
