EX-10.1 2 glc_ex10z1.htm STOCK PURCHASE AGREEMENT STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of July ___, 2015 (the “Effective Date”) by and among XXXXX X. XXXXXXX (the “Shareholder”), the sole shareholder of the Company, XXXXXXX, INC., a South Carolina corporation (the “Company”) and TNH ACQUISITION, LLC, a Georgia limited liability company (“Purchaser”).
WHEREAS, the Company owns certain land, buildings, improvements, furniture, fixtures and equipment comprising a skilled nursing facility located at 000 Xxxxxxxxxx Xxxx, Xxxxxxxx, Xxxxx Xxxxxxxx 00000 consisting of two buildings containing 68 licensed beds and 44 licensed beds, and certain property on the other side of Bellefield Road comprising a spray field for treated wastewater (the “Facility”); and
WHEREAS, the Facility is leased to Fairfield Home, LLC, a South Carolina limited liability company (“Tenant”) pursuant to a certain oral month to month lease agreement (the “Lease”); and
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ARTICLE 1 DEFINITIONS
1.1
“Agreement” shall mean this Stock Purchase Agreement, together with all Schedules and Exhibits attached hereto, as it and they may be amended from time to time as herein provided.
“Business Day” shall mean any day other than a Saturday, Sunday or any other day on which banking institutions in the State of South Carolina are authorized by law or executive action to close.
“Closing” shall mean the closing of the transaction contemplated by this Agreement.
“Closing Date” shall mean the first day of the month following the month in which Purchaser (or its designated operator) obtains all required licenses from the State of South Carolina to operate the Facility but no later than September 30, 2015, or if extended by Purchaser pursuant to Section 2.2 hereof, no later than October 31, 2015.
“Contracts” shall mean all of the Company’s service contracts, equipment leases, booking agreements, warranties and guaranties, and other arrangements or agreements which relate exclusively to the ownership, repair, maintenance, management, leasing or operation of the Facility.
“Deposit” shall mean the amount of Fifty Thousand and 00/100s Dollars ($50,000.00) deposited by Purchaser with Escrow Agent simultaneously with the entering hereof, and, if the Closing Date is extended until October 31, 2015 by the Purchaser pursuant to Section 2.2 hereof an additional of Fifty Thousand and 00/100s Dollars ($50,000.00) such that, in such event the Deposit shall mean One Hundred Thousand and No/100ths Dollars ($100,000.00) .
“Escrow Agent” shall mean Xxxxxx White Xxxxxxxx, P.C. as agent for the Title Company.
“Environmental Law” shall mean the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, including the Superfund Amendments and Reauthorization Act of 1986 (42 U.S.C. Sections 9601 et seq.), the Resource Conservation and Recovery Act of 1976 (42 U.S.C. Section 6901 et seq.), the Clean Water Act (33 U.S.C. Sections 466 et seq.), the Safe Drinking Water Act Sections 1401 (14 U.S.C. Section 1450), the Hazardous Materials Transportation Act (79 U.S.C. Sections 1801 et seq.), the Toxic Substances Control Act (15 U.S.C. Sections 2601-2629) and any other federal, state, or local law, regulation, or ordinance regarding environmental conditions or hazards.
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“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.
“FF&E” shall mean, collectively, all appliances, machinery, devices, fixtures, equipment (including, without limitation, all kitchen equipment), furniture, furnishings, partitions, signs or trade fixtures or other tangible personal property owned by the Company and located at the Facility.
“Hazardous Substance” shall mean any chemical, substance, material, object, condition, or waste harmful to human health or safety or to the environment due to its radioactivity, ignitability, corrosivity, reactivity, explosivity, toxicity, carcinogenicity, infectiousness, or other harmful or potentially harmful properties or effects, including, without limitation, petroleum or petroleum products, and all of those chemicals, substances, materials, objects, conditions, wastes, or combinations of them which are now or become listed, defined or regulated in any manner by any Environmental Law.
“Improvements” shall mean, collectively, all buildings and other structures and improvements situated on, affixed or appurtenant to the Land on which the Facility is located.
“Inspection Period” shall mean the period beginning on the Effective Date and expiring at 5:00 p.m. eastern time on the thirtieth (30th) day after the Effective Date.
“Land” shall mean the parcel or parcels of land described on Exhibit “B” attached hereto on which the Facility is located, together with all appurtenances thereto. The Land shall include sufficient real property located across Bellefield Road from the real property upon which the Improvements are located, to comprise and constitute an adequate spray field (the “Spray Field”) for wastewater generated from use and occupancy of the Facility and its Improvements. Shareholder shall at her expense have a survey prepared separating the Spray Field from the balance of the real property (and improvements thereto, if any, collectively the “Balance”) and convey the said Balance to the Shareholder or a third party prior to Closing. The Balance is not and shall not be a part of the Facility and will not be owned by the Company at Closing.
“Purchase Price” shall mean Three Million and 00/100s Dollars ($3,000,000.00).
“Real Property” shall mean, collectively, the Land and the Improvements related to the Facility.
“Seller shall mean the Shareholder.
“Tax Code” shall mean the Internal Revenue Code of 1986 and, to the extent applicable, the Treasury Regulations promulgated thereunder, each as from time to time amended.
“Title Company” shall mean Chicago Title Insurance Company or such other reputable national title insurance company as may be selected by Purchaser.
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ARTICLE 2 PURCHASE AND SALE; CLOSING
2.1
2.2
2.3
(a)
Deposit. Within three (3) Business Days following the Effective Date, Purchaser shall deposit the Initial Deposit of $50,000.00 with the Escrow Agent by wire transfer of immediately available funds.
(b)
2.4
(a)
(b)
(c)
(d)
(d)
CPL. Prior to execution and delivery of the Escrow Agreement Escrow Agent shall deliver to Shareholder and Purchaser a Closing Protection Letter issued by the Title Company, addressed to the Shareholder and Purchaser and assuring each of them of performance of the duties of the Escrow Agent, by Escrow Agent.
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ARTICLE 3 DILIGENCE
3.1
Inspections and Other Diligence Activities.
(a)
Property Inspections. During the Inspection Period and thereafter until the Closing or the earlier termination of this Agreement, the Company shall permit Purchaser and its representatives to conduct non-invasive physical inspections of the Real Property and the Facility; provided, however, Purchaser shall not be permitted to perform any environmental investigations or invasive testing which are beyond the scope of typical so-called “Phase I” investigation without the Company’s prior written consent, which consent shall not be unreasonably withheld or delayed. Except for the administrator of the Facility (whom Purchaser may contact), Purchaser shall not contact any employees or any residents of the Facility without the Company’s prior written consent. All such inspections shall be performed in a manner consistent with this Agreement and so as to minimize any interference or disruptions to the residents or the operations of the Facility. Purchaser shall notify the Company at least one (1) Business Day prior to making any such inspections. For purposes of the preceding sentence only, notice may be given by e-mail to Xxxxx X. Xxxxxxx at xxxxx@xxxxxxxxx.xxx with a copy to Xxxxxx Xxxxxxx at XXxxxxxx@xxxxxx.xxx.
(b)
Diligence Materials. From and after the Effective Date until the Closing or the earlier termination of this Agreement, Shareholder shall deliver to Purchaser for Purchaser’s review true, correct and complete copies of any materials pertaining to the Real Property, the Facility and/or the Company that are reasonably requested by Purchaser to the extent such materials are within Shareholder’s possession or control.
3.2
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3.3
3.4
3.5
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ARTICLE 4 CONDITIONS TO PURCHASER’S OBLIGATION TO CLOSE
The obligation of Purchaser to acquire the Stock shall be subject to the satisfaction of the following conditions precedent on and as of the Closing Date:
4.1
(a)
(b)
(c)
(d)
Termination of the Lease and Management Agreement. Termination agreements for the Lease and Management Agreement in form and substance acceptable to Purchaser shall be executed and delivered to Purchaser.
(e)
(f)
Other Conveyance Documents. Such other conveyance documents and instruments as Purchaser or the Title Company may reasonably require and as are consistent with this Agreement and are customary in like transactions in the State of South Carolina.
4.2
4.3
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4.4
Condition of the Facility. The Facility shall, on the Closing Date, be in substantially the same condition as it was on the Effective Date, normal wear and tear excepted; provided, however, if a casualty or condemnation occurs with respect to the Facility, Article 10 shall govern the rights and obligations of the parties hereunder.
4.5
4.6
ARTICLE 5 CONDITIONS TO SHAREHOLDER’S OBLIGATION TO CLOSE
The obligation of Shareholder to convey the Stock to Purchaser is subject to the satisfaction of the following conditions precedent on and as of the Closing Date:
5.1
5.2
5.3
5.4
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ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF SHAREHOLDER AND COMPANY
6.1
(a)
(b)
(c)
(d)
Litigation. There are no pending investigations, actions or proceedings which questions the validity of this Agreement or any action taken or to be taken pursuant hereto or thereto. The Company has not received any written notice regarding any pending or threatened litigation or administrative proceedings which could reasonably be expected to materially adversely affect the Company or the Facility or the Company’s right to enter into this Agreement or to consummate the transactions contemplated by this Agreement. The Company is not subject to any judgment, order, writ, injunction, decree or award of any court, arbitrator or governmental department, agency, board, bureau or instrumentality issued or entered in a proceeding to which the Company or the Facility is or was a party.
(e)
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(f)
(g)
(h)
No Conflict. The execution and delivery of this Agreement by Shareholder, the consummation of the transactions contemplated herein by Shareholder, and the performance of the covenants and agreements of Shareholder, will not, with or without the giving of notice or the lapse of time, or both, (a) violate, conflict with or result in a breach or default under or cause termination of any term or condition of any mortgage, indenture, contract, license, permit, instrument, trust document, or other agreement, document or instrument to which Shareholder is a party or by which Shareholder or any of her properties may be bound; or (b) violate any provision of any law or any order or any legal requirement, to which Shareholder is a party or by which Shareholder or her properties may be bound.
(i)
Ownership of the Stock. Shareholder owns, of record and beneficially, good and valid title to the Stock in the amount set forth next to Shareholder’s name on Exhibit “A” and such shares of Stock (a) are validly issued, fully paid and nonassessable, and (b) are free and clear of any liens, with no defects of title whatsoever and constitute one hundred percent (100%) of the issued and outstanding shares of the Company. Other than the shares of Stock, Shareholder owns no shares of capital stock of the Company or any other equity security of the Company and no right of any kind to have any such equity security issued. Upon the Closing, Purchaser shall have obtained good and valid title to the Stock free and clear of any liens, and with no defects of title whatsoever. Shareholder has full and exclusive power, right and authority to vote the shares of Stock. Shareholder is not a party to or bound by any agreement affecting or relating to Shareholder’s right to transfer (including any right of first refusal) or vote the shares, and Shareholder is not a party to any contract, agreement or understanding that obligates the Company to repurchase, redeem or otherwise acquire any shares of capital stock or other securities of the Company.
(j)
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(k)
Absence of Other Claims. No prior offer, issue, redemption, call, purchase, sale, merger, transfer, involvement in any transfer, negotiation or other transaction of any nature or kind with respect to any capital stock (including shares, offers, options, warrants, or debt convertible into shares, options or warrants) of the Company owned by Shareholder has given or may give rise to (a) any valid claim or action by any person (including, without limitation, any former or present holder of any of the shares of stock owned by Shareholder); or (b) and, to the knowledge of Shareholder, no fact or circumstance exists which could give rise to any such right, claim, action or interest on behalf of any person.
(l)
Litigation and Absence of Undisclosed Liabilities; Current Investigation. There are no claims, charges, arbitrations, actions, suits, proceedings, or investigations pending or, to the knowledge of Shareholder, threatened against, relating to Shareholder, at law or in equity, or before or by any governmental body, which will prevent Shareholder from consummating the transactions contemplated by this Agreement.
(m)
(n)
(i)
The Company has the right, legal capacity, full power and authority to enter into this Agreement and the other agreements contemplated herein to which the Company is a party (the “Company Transaction Agreements”) and to perform its obligations hereunder and thereunder and to consummate the transactions contemplated herein and thereby. This Agreement has been duly and validly executed and delivered by the Company.
(ii)
Neither the execution or delivery of this Agreement, nor the consummation or performance by the Company or Shareholder of any of the transactions contemplated hereby will, directly or indirectly (with or without notice or lapse of time or both):
(A)
violate the Articles of Incorporation, Bylaws or other governing documents of the Company;
(B)
violate, contravene or conflict with any provisions of law or any order or legal requirement to which the Company or Shareholder is subject or by which the Company, Shareholder, the Stock or any of the properties or assets of the Company may be bound or give any governmental body or other person the right to challenge any of the contemplated transactions or to exercise any remedy or obtain any relief under, any order or legal requirement to which the Company, Shareholder, the Stock or any of the properties or assets of the Company may be subject, except as would not, individually or in the aggregate, result in a material adverse effect;
(o)
(i)
Schedule 6.1(p)(i) sets forth a complete and accurate list and description of all the personal property that the Company owns, has agreed (or has an option) to purchase, sell or lease, or may be obligated to purchase, sell or lease.
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(ii)
The Company (i) has good and valid title to all the personal and mixed, tangible and intangible properties and assets which it purports to own or which it uses in the conduct of its business (except for inventory); and (ii) owns such personal property free and clear of all liens of any nature whatsoever, including any mortgages, leases, chattel mortgages, conditional sales contracts, collateral, security arrangements and other title or interest retention arrangements. All properties and assets of the Company are in the possession of the Company.
(p)
Leases. Schedule 6.1(q) contains a complete and accurate list of all leases pursuant to which the Company leases personal property from others. The Company has made available to Purchaser true, correct and complete copies of such leases.
(q)
(i)
Schedule 6.1(r)(i) sets forth a true, correct, and complete list of all Contracts.
(ii)
Each Contract is in full force and effect and there are not now any existing defaults or events of default, real or claimed with respect to the Company and the other parties thereto, or events which with notice or lapse of time or both would constitute defaults, the consequence of which, severally or in the aggregate, would have a material adverse effect on the Company. The Contracts are valid and enforceable in accordance with their respective terms with respect to the Company and, to the Company’s knowledge, each other party thereto, except as enforceability may be limited by applicable equitable principles or by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally, and to the exercise of judicial discretion in accordance with general equitable principles. There exists no actual or, to the Company’s knowledge, threatened, termination, cancellation, or limitation of, or any amendment, modification, or change to, any Contract that would have a material adverse effect on the company. The Company has made available to Purchaser true, correct and complete copies of all Contracts.
(r)
Licenses and Permits. Schedule 6.1(t) contains a complete and accurate list of each license and permit that is held by the Company.
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(t)
(u)
(v)
(w)
(i)
Schedule 6.1(x) sets forth the names and current compensation (broken down by category, e.g., salary, bonus, commission) of all employees of the Company, together with the date and amount of the last increase in compensation for each such person.
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(ii)
To the Company’s knowledge, each foreign national employee of the Company is authorized to be present and employed in the United States. The Company is in compliance in all material respects with all Laws, Orders, and Legal Requirements relating to the regulation of foreign nationals in the United States including, without limitation, those items relating to the employment and compensation of foreign nationals in the United States. Moreover, there are no unresolved past, pending or, to the Company’s knowledge, threatened administrative, regulatory or judicial actions, proceedings, investigations, obligations, liabilities, losses, decrees, judgments, penalties, fines, fees, demands, demand letters, orders, directives, claims, or notices of noncompliance or violation relating in any way to the Company or its operations in connection with the Company’s employment of foreign nationals. As used herein, the term “foreign national” means a person who is not a citizen of the United States of America.
(iii)
The Company, within the last three (3) years, has not experienced any slowdown, work interruption, strike, or work stoppage. The Company is not a party to and has no obligation pursuant to, any oral or written agreement, collective bargaining or otherwise, with any party regarding the rates of pay or working conditions of any of its employees nor is the Company obligated under any agreement to recognize or bargain with any labor organization or union on behalf of such employees. Neither the Company, nor any member of the governing body of the Company, nor any of the Company’s officers or employees, has been charged or threatened in writing with the charge of any unfair labor practice. The Company is in compliance in all material respects with all applicable legal requirements concerning the employer-employee relationship in respect of its employees. The Company has paid, or will pay in a timely manner, any wages, bonuses, or commissions required to be paid to its employees for all services performed by them to the Closing Date. The Company does not have any employment contract, consulting agreement (other than the management agreement between Fairfield Home, LLC, the tenant of the Facility, and Xxxxxx Xxxx Healthcare, LLC, to provide management for the Facility, the “Management Agreement”), termination or severance agreement, salary continuation agreement, change of control agreement or any other contract or other agreement, including offers for any of the above, respecting the terms and conditions of employment or payment of compensation to any current or former employee or other service provider of the Company. To the knowledge of the Company, no employee of the Company is a party to, or is otherwise bound by, any contract, agreement or arrangement between such employee and any other person that in any way adversely affects or will affect the performance of such Person’s duties as an employee of the Company.
(iv)
Schedule 6.1(dd)(x) sets forth the name and title of each director and officer of the Company. The sole director of the Company receives compensation from the Company for services as a director or officer of the Company.
(v)
All persons classified by the Company as independent contractors have been properly classified in accordance with all applicable legal requirements and no such person is eligible to participate in any Company benefit plan or would be eligible to participate if the Company’s classification of such person as an independent contractor is subsequently determined to be incorrect. The Company has not received in writing a claim from any governmental body to the effect that the Company has improperly classified any person as an independent contractor, nor to the knowledge of the Company has any such claim been threatened.
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(x)
Employee Benefits.
(i)
All Company benefit plans are listed on Schedule 6.1(y). The Company does not maintain, nor in the last five (5) years has it maintained or contributed to, any Company benefit plan. Each Company benefit plan has been administered in compliance in all material respects with the applicable provisions of ERISA, the Tax Code and other applicable Governmental Regulations. Each Company benefit plan which is intended to be qualified within the meaning of the Tax Code §401(a) is so qualified and has received a determination, opinion or advisory letter from the Internal Revenue Service upon which it may rely regarding its qualified status and nothing has occurred, whether by action or failure to act, that could cause the loss of such qualification. No Company benefit plan is or has ever been subject to Title IV of ERISA, Section 412 of the Tax Code or Section 302 of ERISA, and neither Shareholder nor any ERISA Affiliate have incurred any liability under Title IV of ERISA. No Company benefit plan provides or promises to provide employee welfare benefits (as defined in ERISA §3(1)) to any current or former employee or his or her family members beyond termination of service or retirement, other than coverage mandated by law. To the Company’s knowledge, there have been no prohibited transactions or other fiduciary breaches with respect to any Company benefit plan. No action or investigation with respect to any Company benefit plan or any trustees or fiduciaries thereof (other than routine claims for benefits) is pending or, to the Company’s knowledge, threatened and no completed action or investigation has resulted in the imposition of any tax or penalty. Each “nonqualified deferred compensation plan” subject to the Tax Code §409A is either exempt from coverage by the Tax Code §409A or complies with the Tax Code §409A and has been operated and timely amended since January 1, 2005 in good faith compliance with the Tax Code §409A and all applicable guidance issued thereunder.
(ii)
The Company has never been a member of an affiliated service group under the Tax Code Section 414(m) and is not a party to an employee leasing arrangement covered by the Tax Code Section 414(n).
(iii)
The Company has made available to Purchaser: (i) copies of all material documents setting forth the terms of each Company benefit plan, including all amendments thereto and all related trust documents; (ii) the three most recent annual reports (Form Series 5500), if any, required under ERISA or the Tax Code in connection with each Company benefit plan; (iii) the most recent summary plan description, if any, required under ERISA with respect to each Company benefit plan; (iv) all material written contracts, instruments or agreements relating to each Company benefit plan, including administrative service agreements and group insurance contracts; (v) the most recent IRS determination or opinion letter issued with respect to each Company benefit plan intended to be qualified under Section 401(a) of the Tax Code; (vi) all documents relating to any governmental audit of a Company benefit plan; and (vii) all filings under the IRS’ Employee Plans Compliance Resolution System Program or any of its predecessors or the U.S. Department of Labor Delinquent Filer Program or Voluntary Fiduciary Correction Program.
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(iv)
All payments required by each Company benefit plan with respect to all prior periods have been made or provided for by the Company in accordance with the provisions of the Company benefit plan, applicable law and generally accepted accounting principles. The consummation of the transactions described herein (i) will not cause Purchaser or any of its ERISA Affiliates to incur or suffer any liability, contingent or otherwise, relating to any Company benefit plan, and (ii) will not cause, alone or in combination with other events, the acceleration of payment of vesting of any benefit under a Company benefit plan.
(y)
6.2
6.3
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6.4
AS-IS.
EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, SHAREHOLDER AND THE COMPANY HAVE NOT MADE, AND PURCHASER HAS NOT RELIED UPON, ANY INFORMATION, PROMISE, REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, REGARDING THE COMPANY OR THE FACILITY, INCLUDING, WITHOUT LIMITATION, ANY INFORMATION, PROMISE, REPRESENTATION OR WARRANTY REGARDING THE PHYSICAL CONDITION OR VALUE OF THE FACILITY, TITLE TO OR THE BOUNDARIES OF ANY OF THE REAL PROPERTY, PEST CONTROL MATTERS, SOIL CONDITIONS, THE PRESENCE, EXISTENCE OR ABSENCE OF HAZARDOUS SUBSTANCES, TOXIC SUBSTANCES OR OTHER ENVIRONMENTAL MATTERS, COMPLIANCE WITH BUILDING, HEALTH, SAFETY, LAND USE AND ZONING LAWS, REGULATIONS AND ORDERS, STRUCTURAL AND OTHER ENGINEERING CHARACTERISTICS, TRAFFIC PATTERNS, MARKET DATA, ECONOMIC CONDITIONS OR PROJECTIONS, AND ANY OTHER INFORMATION PERTAINING TO THE FACILITY OR THE MARKET AND PHYSICAL ENVIRONMENT IN WHICH IT MAY BE LOCATED AND SELLER EXPRESSLY DISCLAIMS ALL WARRANTIES RELEVANT TO THE COMPANY OR THE FACILITY, EITHER EXPRESS OR IMPLIED, INCLUDING MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND SUITABILITY FOR ITS INTENDED USE. PURCHASER ACKNOWLEDGES THAT (A) PURCHASER IS A SOPHISTICATED OWNER OF FACILITY SIMILAR TO THE FACILITY, (B) PURCHASER HAS ENTERED INTO THIS AGREEMENT WITH THE INTENTION OF MAKING AND RELYING UPON ITS OWN INVESTIGATION OR THAT OF THIRD PARTIES WITH RESPECT TO THE PHYSICAL, ENVIRONMENTAL, ECONOMIC AND LEGAL CONDITION OF THE COMPANY AND THE FACILITY AND (C) PURCHASER IS NOT RELYING UPON ANY STATEMENTS, REPRESENTATIONS OR WARRANTIES OF ANY KIND, AND IS ACQUIRING THE FACILITY IN “AS IS, WHERE IS” CONDITION, EXCEPT AS SPECIFICALLY SET FORTH IN THIS AGREEMENT.
ARTICLE 7 REPRESENTATIONS AND WARRANTIES OF PURCHASER
7.1
(a)
Status and Authority of Purchaser. Purchaser is a limited liability company duly formed, validly existing and in good standing under the laws of its state of formation, and has all requisite power and authority under the laws of such state and its charter documents to enter into and perform its obligations under this Agreement and to consummate the transactions contemplated hereby and thereby.
(b)
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constitute the valid and binding obligations and agreements of Purchaser, enforceable against Purchaser in accordance with their respective terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws of general application affecting the rights and remedies of creditors.
(c)
"The shares represented by this certificate were issued by the corporation pursuant to exemptions from registration under both federal and South Carolina securities laws, rules and regulations. Such exemptions may prohibit certain transfers of these shares. Therefore, none of the shares (nor any interest in such shares) may be transferred in any manner whatsoever (either voluntarily or involuntarily, directly or indirectly, by pledge, sale, gift, levy, or any other attempted method of transfer) without the prior written consent of the shareholder(s) of the corporation that such transfer is permitted, or the prior written opinion of an attorney licensed to practice law in South Carolina who was appointed in writing by the shareholder(s) of the corporation to render such opinion, that such transfer is permitted."
(d)
(e)
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7.2
ARTICLE 8 COVENANTS
8.1
(a)
Material Agreements. Not to enter into, modify, amend or terminate any material agreement which would encumber or be binding upon the Company from and after the Closing Date, without in each instance obtaining the prior written consent of Purchaser, which consent may be withheld in Purchaser’s sole and absolute discretion.
(b)
9.1
Apportionments.
(a)
Prorations. The following items for the Company and the Real Property shall be apportioned at the Closing as of 11:59 p.m. on the day immediately preceding the Closing Date:
(i)
real estate taxes and assessments other than special assessments, based on the rates and assessed valuation applicable in the fiscal year for which assessed;
(ii)
municipal assessments and governmental license and permit fees;
(iii)
amounts payable under financing or equipment leases affecting personal property; and
(iv)
all other items of income and expense normally apportioned in sales of similar properties.
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If any of the foregoing cannot be apportioned at the Closing because of the unavailability of the amounts which are to be apportioned, such items shall be apportioned on the basis of a good faith estimate by the parties and reconciled as soon as practicable after the Closing Date but, in any event, no later than forty-five (45) days after the Closing Date.
(b)
Net Adjustments. If a net amount is owed by the Company to Purchaser pursuant to this Section 9.1, such amount shall be credited against the Purchase Price. If a net amount is owed by Purchaser to Shareholder pursuant to this Section 9.1, such amount shall be added to the Purchase Price.
(c)
Accounts and Cash On Hand. All cash (“Cash”) on hand (including, without limitation, monies, checks received (whether deposited or to be deposited) and federal funds wire transfers and electronic wire transfers in transit or placed) on or before 11:59 p.m. on the day immediately preceding the Closing Date, and all accounts receivable (including, without limitation, unbilled work in progress) (“Accounts”) accruing on or before 11:59 p.m. on the day immediately preceding the Closing Date (the “Effective Time”) shall be the sole property of and belong to the Shareholder. All Accounts accruing after 11:59 p.m. on the day immediately preceding the Closing Date shall be the sole property of and belong to the Purchaser. Each of the parties agrees to provide reasonable assistance and at no cost to the other to assure timely payment to the party(ies) entitled thereto of all such Cash and Accounts, and that all funds so collected or received belonging to or for another party shall be received as trust funds and paid over as promptly as reasonably possible to the party(ies) entitled thereto, together with copies of all accountings and reports with respect thereto. Payments received by Purchaser after the Effective Time with respect to the Facility from third party payors, such as the Medicare Program, the Medicaid Program, the Veteran’s Administration, or managed care companies or health maintenance organizations, shall be handled as follows:
(i)
If the accompanying remittance advice indicates, or if the parties agree, that the payments relate solely to periods prior to the Effective Time, then (A) in the event that such payments are received by Purchaser, Purchaser shall as promptly as reasonably possible pay over such payments to Shareholder (but in any event, not later than ten (10) business days following the receipt of such payment, and until so deposited, shall be held in trust for the benefit of Shareholder) and (B) in the event that such payments are received by Shareholder, Shareholder shall retain the payments.
(ii)
If the accompanying remittance advice indicates, or if the parties agree, that the payments relate solely to periods after the Effective Time, then (A) in the event that such payments are received by Purchaser, Purchaser shall retain the payments and (B) in the event that such payments are received by Shareholder, Shareholder shall promptly forward such payments to Purchaser (but in any event, not later than ten (10) business days following the receipt of such payment, and until so forwarded, shall be held in trust for the benefit of Purchaser);
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(iii)
If the accompanying remittance advice indicates, or if the parties agree, that the payments relate to periods both prior to and after the Effective Time, then, (A) if such payment is received by Purchaser, Purchaser shall promptly pay the amount of such payment relating to periods prior to the Effective Time to Shareholder (but in any event, not later than ten (10) business days following the receipt of such payment), and (B) if such payment is received by Shareholder, Shareholder shall promptly pay the amount of such payment relating to periods following the Effective Time to Purchaser (but in any event, not later than ten (10) business days following the receipt of such payment).
(iv)
If the accompanying remittance advice does not indicate the period to which a payment relates or if there is no accompanying remittance advice and if the parties do not otherwise agree as to how to apply such payment, then any such payments received during the first ninety (90) days after the Effective Time shall be applied first to the payor’s pre-Effective Time balances and any remaining portion shall be applied to such payor’s post-Effective Time balance and any such payments received following the first ninety (90) days after the Effective Time shall be first applied to such payor’s post-Effective Time balances.
9.2
Closing Costs.
(a)
Purchaser’s Closing Costs. Purchaser shall pay the following costs in connection with the consummation of the Closing: (i) the premium charges for title policies and all of the charges for any endorsements thereto and (ii) all other charges incurred by Purchaser in connection with this Agreement (including, without limitation, the fees and expenses of Purchaser’s attorneys and other consultants).
(b)
Shareholder’s Closing Costs. The Shareholder shall pay the following costs in connection with the consummation of the Closing: (i) all commissions owed to any broker in accordance with the terms of a separate agreement between the Company and/or Shareholder and such broker; and (ii) all other charges incurred by the Shareholder in connection with this Agreement (including, without limitation, the fees and expenses for the Shareholder’s attorneys and other consultants).
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ARTICLE 10 DAMAGE TO OR CONDEMNATION OF PROPERTY
10.1
Casualty. If, prior to the Closing, all or any material part of the Facility is destroyed or materially damaged by fire or other casualty, the Company shall promptly notify Purchaser of such fact. In such event, Purchaser shall have the right to terminate this Agreement (in whole but not in part) by giving notice thereof to the Company not later than ten (10) days after receiving the Company’s notice (and, if necessary, the Closing Date shall be extended until the second Business Day after the expiration of such ten-day period). If Purchaser elects to terminate this Agreement as aforesaid, this Agreement shall terminate and be of no further force and effect, the Deposit shall be returned to Purchaser, and no party shall have any rights or obligations hereunder. If less than a material part of the Facility shall be affected or if Purchaser shall not elect to terminate this Agreement as aforesaid, there shall be no abatement of the Purchase Price and the Company shall assign to Purchaser at the Closing all of the Company’s right, title and interest in and to the proceeds, if any, under the Company’s insurance policies covering such property with respect to such damage or destruction and there shall be credited against the Purchase Price the amount of any applicable deductible.
10.2
Condemnation. If, prior to the Closing, all or any material part of the Facility is taken by eminent domain (or becomes the subject of a pending taking which has not yet been consummated), the Company shall notify Purchaser of such fact promptly after obtaining knowledge thereof and Purchaser shall have the right to terminate this Agreement (in whole but not in part) by giving notice thereof to the Company not later than ten (10) days after the giving of the Company’s notice (and, if necessary, the Closing Date shall be extended until the second day after the expiration of such ten-day period). If Purchaser elects to terminate this Agreement as aforesaid, whereupon, this Agreement shall terminate and be of no further force and effect, the Deposit shall be returned to Purchaser, and no party shall have any rights or obligations hereunder. If less than a material part of the Facility shall be affected or if Purchaser shall not elect to terminate this Agreement as aforesaid, the sale of the Stock shall be consummated as herein provided without any adjustment to the Purchase Price (except to the extent of any condemnation award received by the Company prior to the Closing) and the Company shall assign to Purchaser at the Closing all of the Company’s right, title and interest in and to all awards, if any, for the taking, and Purchaser shall be entitled to receive and keep all awards for the taking of the Facility or portion thereof.
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ARTICLE 11 INDEMNIFICATION AND DEFAULT
11.1
11.2
11.3
11.4
ARTICLE 12 MISCELLANEOUS
12.1
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12.2
(a)
(b)
Notice Addresses. All such notices shall be addressed,
If to the Company,
or Shareholder to:
Xxxxxxx, Inc.
0000 Xxxx Xxxxxx
Xxxxxx, X.X. 00000
Email: xxxxx@xxxxxxxxx.xxx
with a copy to:
Xxxxxx X. Xxxxx, Esq
Xxxxx, Cassell, Jackson, Peace & Silver, LLC
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxxx Xxx 00000 (postal zip code 29211-1656)
Columbia, S.C. 29201
Email: xxxxxx@xxxxx.xxx
And with a copy to:
Xxxxxx X. Xxxxxxx, Xx.
Sheheen, Xxxxxxx & Xxxxxx, LLP
0000 Xxxx Xxxxxx Xxxx Xxxxxx Xxxxxx 000 Xxxxxx, XX 00000
Email: XXxxxxxx@xxxxxx.xxx
If to Purchaser, to:
TNH Acquisition, LLC
Two Buckhead Plaza
0000 Xxxxxxxxx Xxxxxx, XX, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxxxxxx X. Xxxxxxx
Email: xxxxxxxxx@xxxxxxxxxxxxxxxxxxx.xxx
24
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with a copy to:
Xxxxxxx X. Xxxxx, Esq. Xxxx Xxx Xxxxxxx & Xxxxxxxxx, LLP 000 Xxxxxxxx Xxxx, Xxxxx 0000 Xxxxxxx, Xxxxxxx 00000 Facsimile: (000) 000-0000
Email: xxxxxx@xxxx.xxx
If to Escrow Agent, to:
Xxxxxxx X. Xxxxxx, Esq. Suite 570 South
0000 Xxxxx Xxxxx Xxxxxxx
Xxxxxxx, Xxxxxxx 00000 Facsimile No.: (000) 000-0000
Email: xxxxxxx@xxxxxxxxxxxxxx.xxx
(c)
Change of Notice Addresses. By notice given as herein provided, the parties hereto shall have the right from time to time and at any time to change their respective addresses to any other address within the United States of America effective upon receipt by the other parties of such notice.
12.3
12.4
12.5
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12.6
12.7
12.8
12.9
12.10
12.11
12.12
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12.13
Performance on Business Days. In the event the date on which performance or payment of any obligation of a party required hereunder is other than a Business Day, the time for payment or performance shall automatically be extended to the first Business Day following such date.
12.14
Governing Law. This Agreement shall be interpreted, construed, applied and enforced in accordance with the laws of the State of South Carolina.
12.15
Survival. The provisions of this Article 12 shall survive the Closing hereunder.
[Signatures on Following Page]
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THE COMPANY:
XXXXXXX, INC.,
a South Carolina corporation
By:
___________________________
Name:
Xxxxx X. Xxxxxxx
Title:
President
SHAREHOLDER:
_________________________________
Xxxxx X. Xxxxxxx
PURCHASER:
TNH Acquisition, LLC, a Georgia limited liability company
By:_____________________________
Name: Xxxxxxxxxxx X. Xxxxxxx
Title: Manager
28
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EXHIBIT “A”
SHAREHOLDER | NUMBER OF SHARES OWNED | OWNERSHIP PERCENTAGE |
Xxxxx X. Xxxxxxx | __________ | 100.0% |
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EXHIBIT “B”
LEGAL DESCRIPTION
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EXHIBIT “C”
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (hereinafter referred to as “Escrow Agreement”) is made and entered into as of ______________ ___, 2015 (the “Effective Date”) by and among (i) the XXXXX X. XXXXXXX (the “Shareholder”), (ii) XXXXXXX, INC., a South Carolina corporation (the “Company”) (iii) TNH ACQUISITION, LLC, a Georgia limited liability company (“Purchaser”) and (iv) XXXXXXX X. XXXXXX, ESQUIRE, (hereinafter referred to as “Escrow Agent”).
WHEREAS, Seller and Purchaser have entered into a Stock Purchase Agreement (“Stock Purchase Agreement”) dated as of _____________, 2015 for the purchase and sale of all issued and outstanding share of stock of the Company, the sole asset of which consists of a skilled nursing Facility located at 000 Xxxxxxxxxx Xxxx, Xxxxxxxx, Xxxxx Xxxxxxxx 00000 consisting of 68 licensed beds and 44 licensed beds; and
WHEREAS, Purchaser and Seller desire to have Escrow Agent hold certain xxxxxxx money funds in escrow as required under the Stock Purchase Agreement pursuant to the terms hereof;
Seller and Purchaser hereby appoint Xxxxxx, Xxxxxxx X. Xxxxxx, Esq. as Escrow Agent hereunder.
Purchaser has, or will, deposit and deliver to Escrow Agent a wire transfer in the amount of Fifty Thousand and NO/100 Dollars ($50,000.00) (the “Xxxxxxx Money”) representing the Xxxxxxx Money due under the Stock Purchase Agreement. Additional monies may be deposited with Escrow Agent as may be provided in the Stock Purchase Agreement, all of which are to be held and disbursed as provided herein.
Escrow Agent agrees to deposit the funds in a non-interest bearing Georgia IOLTA attorney’s escrow account and to hold and disburse the funds as herein provided. Notwithstanding anything to the contrary contained in the Stock Purchase Agreement, the undersigned hereby agree that the disposition of the Xxxxxxx Money shall be solely governed by this Escrow Agreement.
Upon written notification from Purchaser and Seller that the contemplated sale is to be consummated, or in the alternative, that the contemplated sale shall not take place, Escrow Agent shall deliver the Xxxxxxx Money as jointly instructed by the parties, assuming said written instructions are mutually compatible. In the event of a dispute between any of the parties hereto sufficient in the sole discretion of Escrow Agent to justify its doing so, Escrow Agent shall be entitled to tender into the registry or custody of any court of competent jurisdiction all money or property in its hands held under the terms of this Escrow Agreement, together with such legal pleadings as it deems appropriate, and thereupon be discharged. Escrow Agent shall be fully indemnified by the parties hereto for all his expenses, costs, and attorney's fees incurred in
HNZW/513844_8.doc/4232-17
connection with any interpleader action which Escrow Agent may file, in its sole discretion, to resolve any dispute as to the Deposit, or which may be filed against the Escrow Agent. Escrow Agent's estimate of such costs, expenses or attorney's fees, may be deducted from the Deposit, and the parties hereby authorize and direct Escrow Agent to sever said estimate from the Deposit and acknowledge and agree that the interpleaded amount shall be the Deposit minus said estimate. The undersigned parties hereby agree that upon a final judgment of any action with regard to a dispute as to the Deposit, Escrow Agent shall be reimbursed from the corpus of the amount interpleaded for any costs, expenses or attorney's fees in excess of the said severed and retained estimate, and will remit to the parties to the action any excess amount remaining after payment of all Escrow Agent's costs, expenses and attorney's fees, in accordance with any directive contained within the final judgment. The undersigned Purchaser and Seller hereby consent to the Superior Court of Xxxx County, Georgia, as the venue for said interpleader action, or any other civil action with regard to this Agreement.
The parties hereto covenant and agree that in performing any of its duties under this Escrow Agreement, Escrow Agent shall not be liable for any loss, costs or damage which it may incur as a result of serving as Escrow Agent hereunder, except for any loss, costs or damage arising out of its sole default or negligence.
Accordingly, Escrow Agent shall not incur any liability with respect to (i) any action taken or omitted to be taken in good faith upon advice of its counsel given with respect to any questions relating to its duties and responsibilities or (ii) any action taken or omitted to be taken in reliance upon any document, including any written notice of instruction provided in this Escrow Agreement, not only as to its due execution and the validity and effectiveness of its provisions, but also the truth and accuracy of any information contained therein, which Escrow Agent shall in good faith believe to be genuine, to have been signed or presented by a proper person or persons and to conform with the provisions of this Escrow Agreement. Escrow Agent shall not incur any liability for any loss or fund due to bank or other depository failure, suspension or cessation of business or any action or inaction on the part of the bank or other depository. Escrow Agent is specifically authorized to refuse to act except upon the written instructions of Purchaser and Seller.
Purchaser and Seller hereby agree to indemnify and hold harmless Escrow Agent against any and all losses, claims, damages, liabilities and expenses, including without limitation, cost of investigation and attorneys’ fees and disbursements which may be imposed upon or incurred by Escrow Agent in connection with its serving as Escrow Agent hereunder.
If Purchaser should subsequently deliver any additional Xxxxxxx Money to Escrow Agent in connection with the sale contemplated by this Escrow Agreement, Escrow Agent shall hold such additional Xxxxxxx Money under the terms of this Escrow Agreement, unless instructed otherwise in writing by the parties.
[Signatures are set forth on the immediately following page.]
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IN WITNESS WHEREOF, the undersigned have caused this instrument to be duly
executed as of the day and year first above written.
THE COMPANY:
XXXXXXX, INC.,
a South Carolina corporation
By:
___________________________
Name:
___________________________
Title:
___________________________
SHAREHOLDER:
_________________________________
Xxxxx X. Xxxxxxx
PURCHASER:
TNH ACQUISITION, LLC, a Georgia limited liability company
By:_____________________________
Name: Xxxxxxxxxxx X. Xxxxxxx
Title: Manager
ESCROW AGENT:
_________________________________
Xxxxxxx X. Xxxxxx, Esq.
Date:_____________________________
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EXHIBIT “D”
STOCK TRANSFER POWER
For value received, _______________, an individual resident of the State of ____________, does hereby sell, assign and transfer unto Global Acquisition, LLC, a Georgia limited liability company, ____________ (____) shares of stock of Xxxxxxx, Inc., a South Carolina corporation (the “Company”), standing in its name on the books of said Company represented by Certificate No. __, and does hereby irrevocably Constitute and appoint _______________________ as the undersigned’s true and lawful attorney with full powers of substitution, to sell, assign and transfer said stock on the books of the Company and for that purpose to make and execute all necessary acts of assignment and transfer thereof.
Dated this __ day of ___________, 2015.
Shareholder:
____________________________
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SCHEDULE 12.1
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