EXHIBIT 10.59
PURCHASE AND SALE AGREEMENT
BY AND AMONG
MPT OPERATING PARTNERSHIP, L.P.
MPT OF BLOOMINGTON, LLC
(COLLECTIVELY, THE "MPT PARTIES")
AND
MONROE HOSPITAL, LLC
SOUTHERN INDIANA MEDICAL PARK II, LLC
(COLLECTIVELY, THE "SELLER PARTIES")
DATED AS OF OCTOBER 7, 2005
Table of Contents
Page
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PURCHASE AND SALE AGREEMENT.......................................................... 1
WITNESSETH:........................................................................... 1
ARTICLE I DEFINED TERMS.............................................................. 1
SECTION 1.1 Certain Defined Terms............................................... 1
SECTION 1.2 Interpretation; Terms Generally..................................... 10
ARTICLE II PURCHASE AND SALE OF ASSETS............................................... 11
SECTION 2.1 Purchase and Sale of Assets......................................... 11
SECTION 2.2 No Assumption of Liabilities........................................ 11
ARTICLE III PURCHASE PRICE........................................................... 11
SECTION 3.1 Purchase Price...................................................... 11
SECTION 3.2 Taxes, Rentals, Utilities........................................... 12
SECTION 3.3 Allocation of Purchase Price........................................ 12
ARTICLE IV REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER PARTIES........... 12
SECTION 4.1 Organization........................................................ 12
SECTION 4.2 Authorization; Enforcement, Absence of Conflicts.................... 12
SECTION 4.3 Absence of Conflicts................................................ 13
SECTION 4.4 Consents and Approvals.............................................. 13
SECTION 4.5 Financial Statements................................................ 13
SECTION 4.6 No Undisclosed Liabilities.......................................... 13
SECTION 4.7 Absence of Changes.................................................. 14
SECTION 4.8 Physicians.......................................................... 14
SECTION 4.9 Taxes............................................................... 14
SECTION 4.10 Title and Condition of the Real Property............................ 15
SECTION 4.11 Compliance with Environmental Laws.................................. 17
SECTION 4.12 Litigation.......................................................... 17
SECTION 4.13 Contracts, Obligations and Commitments.............................. 18
SECTION 4.14 Licenses............................................................ 18
SECTION 4.15 Good Title to Assets................................................ 18
SECTION 4.16 Accreditation; Medicare and Medicaid; Third Party Payors............ 18
SECTION 4.17 Healthcare Regulatory Matters....................................... 19
SECTION 4.18 Xxxx-Xxxxxx Obligations............................................. 20
SECTION 4.19 Medical Staff Matters............................................... 20
SECTION 4.20 Compliance with Law................................................. 20
SECTION 4.21 Intangible Property................................................. 20
SECTION 4.22 Records............................................................. 20
SECTION 4.23 Subsidiaries........................................................ 21
SECTION 4.24 Brokers............................................................. 21
SECTION 4.25 Representations Complete............................................ 21
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE MPT PARTIES.......................... 22
SECTION 5.1 Organization........................................................ 22
SeCTION 5.2 Authorization; Enforcement.......................................... 22
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SECTION 5.3 Absence of Conflicts................................................ 23
SECTION 5.4 Litigation.......................................................... 23
SECTION 5.5 Possession of Permits............................................... 23
SECTION 5.6 Compliance with Law................................................. 23
SECTION 5.7 Brokers............................................................. 24
SECTION 5.8 Representations Complete............................................ 24
ARTICLE VI TITLE AND SURVEY.......................................................... 24
SECTION 6.1 Survey.............................................................. 24
SECTION 6.2 Title Insurance..................................................... 24
ARTICLE VII PRE-CLOSING COVENANTS.................................................... 25
SECTION 7.1 No Shop............................................................. 25
SECTION 7.2 Access.............................................................. 25
SECTION 7.3 Confidentiality..................................................... 26
SECTION 7.4 Regulatory and other Authorizations, Notices and Consents........... 26
SECTION 7.5 Mutual Covenants.................................................... 26
SECTION 7.6 Schedule Updates.................................................... 27
SECTION 7.7 Conduct of Business by the Seller Parties Pending the Closing....... 27
SECTION 7.8 Public Announcements................................................ 27
ARTICLE VIII CLOSING CONDITIONS...................................................... 27
SECTION 8.1 Conditions to the Obligations of the Seller Parties................. 27
SECTION 8.2 Conditions to the Obligations of the MPT Parties.................... 28
ARTICLE IX CLOSING................................................................... 29
SECTION 9.1 Closing Date........................................................ 29
SECTION 9.2 The Seller Parties' Closing Date Deliverables....................... 29
SECTION 9.3 MPT Parties' Closing Date Deliverables.............................. 31
SECTION 9.4 Commitment and Construction Fees.................................... 31
ARTICLE X TERMINATION................................................................ 32
SECTION 10.1 Termination Prior to Closing........................................ 32
SECTION 10.2 Notice of Termination Prior to Closing.............................. 32
ARTICLE XI POST CLOSING COVENANTS................................................... 32
SECTION 11.1 JCAHO Compliance.................................................... 32
SECTION 11.2 HIPAA Compliance.................................................... 32
SECTION 11.3 Necessary Permits................................................... 32
SECTION 11.4 Participation in Government Programs................................ 32
SECTION 11.5 Compliance with Whole Hospital Exception............................ 32
SECTION 11.6 Post-Closing Access to Information.................................. 33
SECTION 11.7 Survival............................................................ 33
ARTICLE XII INDEMNIFICATION.......................................................... 33
SECTION 12.1 Indemnification of the MPT Parties.................................. 33
SECTION 12.2 Indemnification of the Seller Parties............................... 33
SECTION 12.3 Notification and Defense of Claims.................................. 33
SECTION 12.4 Limitations on Claims............................................... 35
SECTION 12.5 Investigations...................................................... 35
SECTION 12.6 Treatment of Indemnification Payments............................... 36
SECTION 12.7 Insured Losses...................................................... 36
SECTION 12.8 Exclusive Remedy.................................................... 36
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ARTICLE XIII DISPUTE RESOLUTION...................................................... 36
SECTION 13.1 Governing Law....................................................... 36
SECTION 13.2 Jurisdiction and Venue.............................................. 36
ARTICLE XIV MISCELLANEOUS............................................................ 37
SECTION 14.1 Assignment.......................................................... 37
SECTION 14.2 Notice.............................................................. 37
SECTION 14.3 Syndication......................................................... 38
SECTION 14.4 Securities Offering and Filings..................................... 38
SECTION 14.5 Expenses............................................................ 38
SECTION 14.6 Captions............................................................ 38
SECTION 14.7 Entire Agreement; Modification...................................... 38
SECTION 14.8 Schedules and Exhibits.............................................. 39
SECTION 14.9 Severability........................................................ 39
SECTION 14.10 Construction........................................................ 39
SECTION 14.11 Further Assurances.................................................. 39
SECTION 14.12 Counterparts........................................................ 39
SECTION 14.13 Binding Effect...................................................... 39
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PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is made and entered into as
of October 7, 2005, by and among MPT OPERATING PARTNERSHIP, L.P., a Delaware
limited partnership ("MPT"), MPT OF BLOOMINGTON, LLC, a Delaware limited
liability company (the "Acquisition Sub") (MPT and Acquisition Sub being
hereinafter referred to, collectively, as the "MPT Parties"); and MONROE
HOSPITAL, LLC, an Indiana limited liability company (the "Monroe Operator"), and
SOUTHERN INDIANA MEDICAL PARK II, LLC, an Indiana limited liability company
("Monroe Seller") (each a "Seller Party" and, collectively, the "Seller
Parties").
WITNESSETH:
WHEREAS, the Monroe Seller is the current owner of that certain parcel of real
property located in Bloomington, Indiana, the legal description of which is set
forth on EXHIBIT A attached hereto (the "Land");
WHEREAS, MPT has caused the Acquisition Sub to be formed for the purpose of
acquiring the Land and other assets described herein from Seller Parties, and
developing and constructing the Hospital (as hereinafter defined) thereon
pursuant to the terms and subject to the conditions of the Funding Agreement (as
hereinafter defined);
WHEREAS, the Monroe Operator desires to lease from the Acquisition Sub the Land
and the Hospital Improvements to be constructed thereon (collectively, the "Real
Property") pursuant to the terms and subject to the conditions of that certain
Lease Agreement in the form attached hereto as EXHIBIT B (the "Lease") which
shall, subject to the satisfaction of the conditions hereinafter set forth, be
entered into by and between the Acquisition Sub and the Monroe Operator as of
Closing (as hereinafter defined);
WHEREAS, Acquisition Sub desires to make a loan (the "Loan") to Monroe Seller in
the amount of One Hundred Sixty-Five Thousand Dollars ($165,000.00), payment of
such amount to be evidenced by a Promissory Note in the form attached hereto as
EXHIBIT C hereto (the "Promissory Note"), and secured as provided therein; and
WHEREAS, the parties desire that a thirty-four (34) acre portion of the Land be
subject to repurchase as provided in the Repurchase Agreement attached hereto as
EXHIBIT C-1;
NOW, THEREFORE, in consideration of the promises and mutual agreements contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto do hereby agree as follows:
DEFINED TERMS
CERTAIN DEFINED TERMS. Capitalized terms used herein shall have the respective
meanings ascribed to them in this Section 1.1.
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"Acquisition Sub" shall have the meaning set forth in the preamble to this
Agreement.
"Acquisition Sub Instruments" shall have the meaning set forth in Section 5.2
hereof.
"Affiliate" shall mean, as to the Person in question, any Person that directly
or indirectly controls, is controlled by, or is under common control with, the
Person in question and any successors or assigns of such Persons; and the term
"control" means possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person whether through
ownership of voting securities, by contract or otherwise.
"Agreement" means this Agreement, and all Exhibits and Schedules hereto, as
amended from time to time in accordance with the terms of this Agreement.
"Ambulatory Surgery Center" means the ambulatory surgery center currently owned
and operated by PMC (as defined herein) in Bloomington, Monroe County, Indiana.
"Appraisal" means that certain appraisal of the Land and an accompanying
reliance letter expressly stating that MPT may rely thereon, each in form and
substance, and prepared by a Person, satisfactory to MPT in its sole discretion.
"Appraised Value" means the fair market value of the Land and the proposed
improvements to be constructed on the Land pursuant to the Funding Agreement and
the Development Agreement, as set forth in the Appraisal.
"ASC" means Monroe Hospital Outpatient ASC, LLC, an Indiana limited liability
company and wholly-owned subsidiary of Monroe Operator.
"Assets" shall have the meaning set forth in Section 2.1 hereof.
"Balance Sheet "shall have the meaning set forth in Section 4.5 hereof.
"Balance Sheet Date" shall have the meaning set forth in Section 4.5 hereof.
"Business" means the operation of the Hospital and the engagement in and pursuit
and conduct of any business ventures or activities reasonably related thereto,
including, without limitation, ASC's operation of the Ambulatory Surgery Center;
provided, however, that the operation of the Ambulatory Surgery Center shall be
deemed to be within the term "Business" only until such time as Lessee achieves
the necessary licensure and certification to provide inpatient and outpatient
surgery services, whereupon, Monroe Operator shall cease to operate the
Ambulatory Surgery Center.
"Business Day" means any day, other than a Saturday or Sunday, that is neither a
legal holiday nor a day on which banking institutions in New York, New York are
authorized or required by law, regulation or executive order to close.
"Claim" shall have the meaning set forth in Section 4.12 hereof.
"Closing" shall have the meaning set forth in Section 9.1 hereof.
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"Closing Date" shall have the meaning set forth in Section 9.1 hereof.
"Code" means the United States Internal Revenue Code of 1986, as amended through
the date hereof, and all regulations thereunder. Any reference herein to a
specific section or sections of the Code shall be deemed to include a reference
to any corresponding provision of future law.
"Commitment Amount" means the approximate amount of Thirty Five Million Five
Hundred Thousand and No/100 Dollars ($35,500,000.00); provided, however, the
Commitment Amount shall not exceed the lesser of (i) the Appraised Value, (ii)
the replacement cost of the Real Property, or (iii) an amount that gives an
EBITDAR coverage based on the Base Rent (as defined in the Lease) of at least
two hundred percent (200%).
"Commitment Fee" shall have the meaning set forth in Section 9.4 hereof.
"Commitment Fee Deposit" shall have the meaning set forth in Section 9.4 hereof.
"Commitment Letter" means that certain Commitment Letter dated February 28,
2005, by and between MPT and the Monroe Operator, as amended.
"Confidentiality Agreement" means that certain Confidentiality Agreement dated
February 3, 2005 by and between MPT and the Monroe Operator.
"Construction Fee" means an amount in cash equal to Fifty Thousand and No/100
Dollars ($50,000.00).
"Contracts" shall have the meaning set forth in Section 4.13 hereof.
"Conveyance Documents" shall have the meaning set forth in Section 2.3 hereof.
"Damages" means demands, claims, actions, losses, damages, liabilities,
penalties, Taxes, costs and expenses (including, without limitation, attorneys'
and accountants' fees, settlement costs, arbitration costs and any other
reasonable expenses for investigating or defending any Claim or threatened
Claim).
"Deed" shall have the meaning set forth in Section 9.2(b) hereof.
"Developer" means Monroe Hospital Development, LLC, an Indiana limited liability
company.
"Development Agreement" means that certain Development Agreement among the
Monroe Operator, the Developer and Acquisition Sub dated as of the Closing Date.
"Effective Date" shall mean the date upon which all of the parties hereto have
executed this Agreement.
"EBITDAR" means earnings before the deduction of interest, taxes, depreciation,
amortization and rent, as determined in accordance with GAAP, or the meaning as
set forth in the Lease.
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"Environmental Claim" means any claim, action, cause of action, investigation or
notice (written or oral) by any Person alleging actual or potential liability
for investigatory, cleanup or governmental response costs, or natural resources
or property damages, or personal injuries, attorney's fees or penalties relating
to (i) the presence, or release into the environment, of any Hazardous Materials
at any location owned or operated by the Seller Parties or any Affiliate of the
Seller Parties, now or in the past, or (ii) circumstances forming the basis of
any violation, or alleged violation, of any Environmental Law.
"Environmental Law" means each federal, state, local and foreign law and
regulation relating to pollution, protection or preservation of human health or
the environment including ambient air, surface water, ground water, land surface
or subsurface strata, and natural resources, and including each law and
regulation relating to emissions, discharges, releases or threatened releases of
Hazardous Materials, or otherwise relating to the manufacturing, processing,
distribution, use, treatment, generation, storage, containment (whether above
ground or underground), disposal, transport or handling of Hazardous Materials,
or the preservation of the environment or mitigation of adverse effects thereon
and each law and regulation with regard to record keeping, notification,
disclosure and reporting requirements respecting Hazardous Materials, including,
without limitation, the Resource Conservation and Recovery Act of 1976, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended by the Superfund Amendments and Reauthorization Act of 1986, the
Hazardous Materials Transportation Act, the Federal Water Pollution Control Act,
the Clean Air Act, the Clean Water Act, the Toxic Substances Control Act, the
Safe Drinking Water Act, in each case as amended from time to time and all
similar federal, state and local environmental statutes, ordinances and the
regulations, orders, or decrees now or hereafter promulgated thereunder.
"Equity Constituents" means, with respect to any Person, as applicable, the
members, general and/or limited partners, shareholders, stockholders or other
Persons, however designated, who are the owners of the issued and outstanding
equity or ownership interests of such Person.
"Exception Documents" means true, correct, current and legible copies of each
document listed as an exception to title on the Title Commitment.
"Excluded Liabilities" shall have the meaning set forth in Section 2.2 hereof.
"Financial Statements" shall have the meaning set forth in Section 4.5 hereof.
"Fixtures" means all permanently affixed non-medical equipment, machinery,
fixtures, and other items of real property, including all components thereof,
now and hereafter located in, on or used in connection with, and permanently
affixed to or incorporated into the Hospital, 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 vacuum, cable
transmission, oxygen and similar systems, all of which, to the greatest extent
permitted by law, are hereby deemed by the parties hereto to constitute real
estate, together with all replacements, modifications, alterations and additions
thereto.
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"Funding Agreement" means that certain Funding Agreement between Monroe Operator
and Acquisition Sub dated as of the Closing Date.
"GAAP" means United States generally accepted accounting principles as in effect
from time to time. Any accounting term used herein and not specifically defined
herein shall be construed in accordance with GAAP.
"Governing Documents" means, with respect to any Person, as applicable, such
Person's charter, articles or certificate of incorporation, bylaws, limited
partnership agreement, limited liability company agreement, stockholders'
agreement or other documents or instruments which establish the rules,
procedures and rights with respect to such Person' governance, and relations
among such Person's Equity Constituents, in each case as amended, restated,
supplemented and/or modified and in effect as of the relevant date.
"Governmental Entity" means any national, federal, regional, state, provincial,
municipal, foreign or multinational court or other governmental or regulatory
authority, administrative body or government, department, board, body, tribunal,
instrumentality or commission of competent jurisdiction.
"Government Programs" shall have the meaning set forth in Section 4.16 hereof.
"Hazardous Materials" means any substance deemed hazardous under any
Environmental Law, including, without limitation, asbestos or any substance
containing asbestos, the group of organic compounds known as polychlorinated
biphenyls, flammable explosives, radioactive materials, infectious wastes,
biomedical and medical wastes, chemicals known to cause cancer or reproductive
toxicity, lead and lead-based paints, radon, pollutants, effluents,
contaminants, emissions or related materials and any items included in the
definition of hazardous or toxic wastes, materials or substances under any
Environmental Law.
"Healthcare Fraud Laws" shall have the meaning set forth in Section 4.17(a)
hereof.
"HIPAA" shall have the meaning set forth in Section 11.2 hereof.
"Hospital" means the general acute care hospital facility and related Hospital
Improvements to be constructed on the Land pursuant to the Development
Agreement.
"Hospital Improvements" means all buildings, improvements, structures and
Fixtures, including, without limitation, landscaping, parking lots and
structures, roads, drainage and all above ground and underground utility
structures, equipment systems and other so-called "infrastructure" improvements
and all other improvements constructed for use or used in connection with the
Hospital.
"Indebtedness" of any Person means, without duplication, (a) all liabilities and
obligations, contingent or otherwise, of any such Person: (i) in respect of
borrowed money (whether secured or unsecured), (ii) under conditional sale or
other title retention agreements relating to property or services purchased
and/or sold by such Person, (iii) evidenced by bonds, notes, debentures or
similar instruments, (iv) for the payment of money relating to a capitalized
lease obligation, (v)
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evidenced by a letter of credit or a reimbursement obligation of such Person
with respect to any letter of credit, (vi) pursuant to any guarantee, or (vii)
secured by (or for which the holder of such obligation has an existing right,
contingent or otherwise, to be secured by) a Lien on the assets or property of
such Person, and (b) all liabilities and obligations of others of the kind
described in the preceding clause (a) and otherwise that (i) such Person is
responsible or liable for, directly or indirectly, as obligor, guarantor, surety
or otherwise, or (ii) which are secured by a Lien on any of the assets or
property of such Person.
"Indemnified Party" shall have the meaning set forth in Section 12.3(a) hereof.
"Indemnifying Party" shall have the meaning set forth in Section 12.3(a) hereof.
"Indemnity Periods" shall have the meaning set forth in Section 12.5(c) hereof.
"Intangible Property" shall have the meaning set forth in Section 4.21 hereof.
"JCAHO" shall have the meaning set forth in Section 11.1 hereof.
"Knowledge" means, with respect to any Person, such Person's actual or deemed
knowledge of a particular fact or matter if (i) any of such Person's current or
former officers or directors (or other Persons, however designated, currently or
formerly possessing and/or exercising similar authority with respect to such
Person) (a Person's "Knowledge Group") has actual knowledge of such fact or
matter; or (ii) any of such Person's Knowledge Group would reasonably be
expected to discover or otherwise become aware of such fact or matter after
conducting a reasonably diligent inquiry.
"Land" shall have the meaning set forth in the recitals to this Agreement.
"Law" means any federal, state or local statute, law, rule, regulation,
ordinance, order, code, policy or rule of common law, now or hereafter in
effect, and in each case as amended, and any judicial or administrative
interpretation thereof by a Governmental Entity or otherwise, including, without
limitation, any judicial or administrative order, consent, decree or judgment.
"Lease" means that certain Lease Agreement in the form attached hereto as
EXHIBIT B.
"Letter of Intent" means that certain Letter of Intent dated February 17, 2005
by and between MPT and the Monroe Operator.
"Liability Threshold" shall have the meaning set forth in Section 12.4(a)
hereof.
"Lien" means any mortgage, deed of trust, pledge, hypothecation, assignment,
charge or deposit arrangement, lien (statutory or otherwise) or preference,
security interest or other encumbrance of any kind or nature whatsoever.
"Loan" shall have the meaning set forth in the recitals to this Agreement.
"Material Adverse Effect" means any changes, event(s), occurrence(s) or
effect(s), whether direct or indirect, that, both before and after giving effect
to the transactions contemplated by this
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Agreement, could, individually or in the aggregate, reasonably be expected to
have a material adverse effect on (i) the Seller Parties' businesses,
properties, results of operations, assets, revenue, income, condition (financial
or otherwise) or ability to timely satisfy their obligations or liabilities
(whether absolute or contingent), (ii) the Assets, or (iii) the conduct of the
Business or the Seller Parties' ability to perform their obligations under,
and/or consummate the transactions contemplated by, this Agreement within the
time periods specified herein.
"Medicaid" shall have the meaning set forth in Section 4.16 hereof.
"Medicare" shall have the meaning set forth in Section 4.16 hereof.
"Monroe Operator" means Monroe Hospital, LLC, an Indiana limited liability
company.
"Monroe Seller" means Southern Indiana Medical Park II, LLC, an Indiana limited
liability company.
"MPT" means MPT Operating Partnership, L.P., a Delaware limited partnership.
"MPT Indemnified Parties" shall have the meaning set forth in Section 12.1
hereof.
"MPT Instruments" shall have the meaning set forth in Section 5.2 hereof.
"MPT Parties" means MPT and the Acquisition Sub, collectively.
"MPT Parties' Indemnity Period" shall have the meaning set forth in Section
12.4(a) hereof.
"Non-Prevailing Party" means, with respect to any Claim between any of the
parties to this Agreement, such party determined as the non-prevailing party by
a court with proper jurisdiction.
"Operational Date" means the date on which the construction of the Hospital is,
in accordance with the terms of the Development Agreement, substantially
complete.
"Ordinary Course of Business" means, with respect to any Person, any action
that: (a) is consistent in nature, scope and magnitude with the past practices
of such Person and is taken in the ordinary course of the normal, day-to-day
operations of such Person; (b) does not require authorization by the board of
directors (or other Persons, however designated, possessing and/or exercising
similar authority with respect to such Person) or Equity Constituents of such
Person and does not require any other special authorization of any nature; or
(c) is similar in nature, scope and magnitude to actions customarily taken,
without any special authorization, in the ordinary course of the normal,
day-to-day operations of other Persons that are in the same line of business as
such Person.
"Permits" shall have the meaning set forth in Section 4.14 hereof.
"Permitted Encumbrances" means (i) Liens for or arising from current ad valorem
taxes not yet due and payable; (ii) easements and other restrictions of record;
(iii) matters set forth in the Title
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Commitment issued by the Title Company; (iv) matters disclosed on the Survey;
and (v) other matters, encumbrances and defects approved by MPT in writing.
"Person" means an individual, a corporation, a limited liability company, a
general or limited partnership, an unincorporated association, a joint venture,
a Governmental Entity or other entity or group.
"Physicians" shall have the meaning set forth in Section 4.8 hereof.
"PMC" means Pain Management & Surgery Center of Southern Indiana, P.C., an
Indiana professional corporation.
"PMC Balance Sheet" shall have the meaning set forth in Section 4.25(a) hereof.
"PMC Balance Sheet Date" shall have the meaning set forth in Section 4.25(a)
hereof.
"PMC Financial Statements" shall have the meaning set forth in Section 4.25(a)
hereof.
"Projected Total Development Costs" means an amount equal to Thirty Five Million
Five Hundred Thousand and No/100 Dollars ($35,500,000.00).
"Promissory Note" shall mean that certain Promissory Note executed by Monroe
Seller in favor of Acquisition Sub in the form attached hereto as EXHIBIT C.
"Public Taking" shall have the meaning set forth in Section 4.10(e) hereof.
"Purchase Price" shall have the meaning set forth in Section 3.1 hereof.
"Real Property" shall have the meaning set forth in the recitals to this
Agreement.
"Repurchase Agreement" shall have the meaning set forth in the recitals to this
Agreement.
"Review Period" shall have the meaning set forth in Section 7.2 hereof.
"Search Reports" means reports of searches made of the uniform commercial code
records of the county in which the Land is located, and of the office of the
secretary of state of the state in which the Land is located and in the state(s)
in which the principal office(s) of the Seller Parties are located.
"Seller Indemnified Parties" shall have the meaning set forth in Section 12.2
hereof.
"Seller Party Instruments" shall have the meaning set forth in Section 4.2
hereof.
"Seller Parties' Indemnity Period" shall have the meaning set forth in Section
12.4(a) hereof.
"Service Provider" means any Person who has rendered, is rendering or is
expected to render services relating to the Business or on behalf of either of
the Seller Parties.
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"Single Purpose Entity" means an entity which (i) exists solely for the purpose
of owning and/or leasing all or any portion of the Real Property and conducting
the operation of the Business, (ii) conducts business only in its own name,
(iii) does not engage in any business other than the ownership and/or leasing of
all or any portion of the Real Property and the operation of the Business, (iv)
does not hold, directly or indirectly, any ownership interest (legal or
equitable) in any entity or any real or personal property other than the
interest which it owns in the Real Property and the other assets incident to the
operation of the Business, (v) does not have any debt other than as permitted by
the Lease or arising in the Ordinary Course of Business and does not guarantee
or otherwise obligate itself with respect to the debts of any other Person, (vi)
has its own separate books, records, accounts, financial statements and tax
returns (with no commingling of funds or assets), (vii) holds itself out as
being a company separate and apart from any other entity, and (viii) maintains
all corporate or limited liability company formalities independent of any other
entity.
"Subsidiary" means, with respect to any Person, any Person of which fifty
percent (50%) or more of the total voting power of the voting securities is
owned or controlled (as defined in the definition of "Affiliate" above),
directly or indirectly, by such Person.
"Survey" means a current "as-built" ALTA survey, certified to ALTA requirements,
prepared by an engineer or surveyor licensed in the state in which the Land is
located acceptable to MPT in its sole discretion, which shall be prepared in
accordance with the provisions set forth in Section 6.1 of this Agreement.
"Taxes" means any and all taxes, charges, fees, levies or other assessments,
including, without limitation, any and all income, gross receipts, excise, real
and personal property (including leaseholds and interests in leaseholds), sales,
use, occupation, transfer, license, ad valorem, gains, profits, gift, minimum
estimated, alternative minimum, social security, unemployment, disability,
premium, recapture, credit, payroll, withholding, severance, stamp, capital
stock, value added leasing, franchise and other taxes or similar charges of any
kind including any interest and penalties on or additions thereto or
attributable to any failure to comply with any requirement regarding any Tax
Return (as hereinafter defined).
"Tax Return" means any return, declaration, filing, report, claim for refund or
information return or other statement relating to Taxes (whether filed with or
submitted to, or required to be filed with or submitted to, any Governmental
Entity), including any schedule or attachment thereto, and including any
amendment or extension thereof.
"Tax Structure" shall have the meaning set forth in Section 7.3 hereof.
"Tax Treatment" shall have the meaning set forth in Section 7.3 hereof.
"Tenant" means the lessees or tenants under the Tenant Leases, if any.
"Tenant Leases" shall have the meaning set forth in Section 4.10(i) hereof.
"Third Party Claim" shall have the meaning set forth in Section 12.3 hereof.
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"Title Commitment" means a current commitment issued by the Title Company to the
MPT Parties pursuant to the terms of which the Title Company shall commit to
issue the Title Policy to the MPT Parties in accordance with the provisions of
this Agreement, and reflecting all matters which would be listed as exceptions
to coverage on the Title Policy.
"Title Company" means the national service office of a title insurance company
licensed in the state in which the Land is located and selected by MPT in its
sole discretion.
"Title Policy" means a title insurance policy in form and substance satisfactory
to MPT in its sole discretion.
"Total Development Costs" means any amount or cost required to be invested,
contributed, expended, and/or incurred by the Acquisition Sub, its members and
all of their Affiliates from time to time in connection with, as applicable, the
acquisition, development, construction and lease of the Land, the Hospital and
the Hospital Improvements, whether pursuant to the Development Agreement or
otherwise in connection with the transactions contemplated by this Agreement.
"Warranties" means all warranties, representations and guaranties with respect
to any of the Assets, whether express or implied, which either Seller Party or
any of such Seller Party's Affiliates now holds or under which either Seller
Party or any of its Affiliates is the beneficiary.
INTERPRETATION; TERMS GENERALLY. The definitions set forth in Section 1.1 and
elsewhere in this Agreement shall apply equally to both the singular and plural
forms of the terms defined. Whenever the context may require, any pronoun shall
include the corresponding masculine, feminine and neuter forms. Unless otherwise
indicated, the words "include", "includes" and "including" shall be deemed to be
followed by the phrase "without limitation." The words "herein", "hereof" and
"hereunder" and words of similar import shall be deemed to refer to this
Agreement (including the preamble, recitals, Schedules and Exhibits) in its
entirety and not to any part hereof, unless the context shall otherwise require.
All references herein to Articles, Sections, Schedules and Exhibits shall be
deemed to refer to Articles, Sections and Schedules of, and Exhibits to, this
Agreement, unless the context shall otherwise require. Unless the context shall
otherwise require, any references to any agreement or other instrument or
statute or regulation are to it as amended and supplemented from time to time
(and, in the case of a statute or regulation, to any corresponding provisions of
successor statutes or regulations). References to any party to this Agreement
shall include references to its respective successors and permitted assigns.
References to a judgment shall include references to any order, writ,
injunction, decree, determination or award of any court or tribunal. References
to any law are references to that law as of the Closing Date, unless clearly
indicated otherwise, and shall also refer to all rules and regulations
promulgated thereunder, unless the context requires otherwise. Any reference in
this Agreement to a "day" or number of "days" that does not refer explicitly to
a "Business Day" or "Business Days" shall be interpreted as a reference to a
calendar day or number of calendar days. If any action or notice is to be taken
or given on or by a particular calendar day, and such calendar day is not a
Business Day, then such action or notice shall be deferred until, or may be
taken or given on, the next Business Day.
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PURCHASE AND SALE OF ASSETS
PURCHASE AND SALE OF ASSETS. Based upon the representations and warranties of
the Seller Parties as set forth herein, and subject to the terms and conditions
hereof, at the Closing, the Seller Parties, in consideration of the payment of
the Purchase Price in accordance with Section 3.1, shall grant, sell, assign,
transfer, convey and deliver to Acquisition Sub, and Acquisition Sub shall
purchase and acquire from the Seller Parties, free and clear of all Liens, other
than Permitted Encumbrances, the following assets of the Seller Parties
(collectively, the "Assets"):
the Land;
to the extent assignable, all rights in all intangible property relating
exclusively to the Land, including, but not limited to, zoning rights, Permits
(other than operating permits) and indemnification or similar rights and all
Warranties affecting or inuring to the benefit of the Land or the owner thereof
(including, without limitation, any indemnification or similar rights and
Warranties related to the Land);
all of the Seller Parties', title and interest in and to site plans, surveys,
soil and substrata studies, architectural drawings, plans and specifications,
inspection reports, engineering and environmental plans and studies, title
reports, floor plans, landscape plans and other plans relating to the Real
Property; and
all of the Seller Parties' right, title and interest in and to all causes of
action, claims and rights in litigation (or which could result in litigation
against any party) pertaining or relating to the Land (including, without
limitation, any causes of action, claims or rights in litigation or other rights
related to or arising under any purchase contracts respecting the Land).
NO ASSUMPTION OF LIABILITIES. Notwithstanding anything in this Agreement to the
contrary, no MPT Party shall assume or agree to pay, satisfy, discharge or
perform, and or be deemed by virtue of the execution and delivery of this
Agreement or any other document delivered at the Closing pursuant to this
Agreement, or as a result of the consummation of the transactions contemplated
by this Agreement or such other document, to have assumed, or to have agreed to
pay, satisfy, discharge or perform, and shall not be liable for, any liability,
obligation, contract or Indebtedness of the Seller Parties, any Affiliate of the
Seller Parties, PMC or any other Person, whether primary or secondary, direct or
indirect, including, without limitation, any liability or obligation relating to
the ownership, use or operation of the Ambulatory Surgery Center or the Assets
prior to Closing, any liability or obligation arising out of or related to any
breach, default, tort or similar act committed by the Seller Parties or any
Affiliate of the Seller Parties or for any failure of the Seller Parties or any
Affiliate of the Seller Parties to perform any covenant or obligation for or
during any period prior to Closing (collectively, the "Excluded Liabilities").
PURCHASE PRICE
PURCHASE PRICE. The purchase price for the Assets shall be Two Million Four
Hundred Twenty Thousand and No/100 Dollars ($2,420,000.00), subject to increase
as provided in the Xxxxxxxxxx
00
Agreement in the form attached hereto as EXHIBIT C-1 (the "Purchase Price").
Subject to the terms and conditions hereof, at Closing, Acquisition Sub shall
pay the Purchase Price to Monroe Seller via transfer of immediately available
federal funds to an account specified in writing by the Seller Parties not less
than three (3) Business Days prior to the Closing Date.
TAXES, RENTALS, UTILITIES. The parties acknowledge that all utility charges and
all real and personal property Taxes related to the Assets and the Hospital
shall be the responsibility of the Monroe Operator pursuant to the terms of the
Lease.
ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be allocated among the
Assets for purposes of Section 1060 of the Code as set forth on SCHEDULE 3.3.
The parties agree to use, and to not take any position which is inconsistent
with, such allocation in the preparation and filing of any Tax Return (including
Form 8594).
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER PARTIES
With the understanding that the MPT Parties shall rely hereon, and as a material
inducement to the MPT Parties to enter into this Agreement and the Development
Agreement, the Seller Parties hereby severally represent, warrant and covenant
to the MPT Parties as of the date hereof and as of the Closing Date as follows:
ORGANIZATION. Each Seller Party is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of Indiana and
is duly qualified and registered as a foreign limited liability company in good
standing under the laws of each jurisdiction in which the nature of the business
conducted, or the assets owned, operated and/or leased by such Seller Party
requires or makes such qualification or registration necessary. SCHEDULE 4.1
attached hereto sets forth the ownership of each of the Seller Parties and,
except as set forth therein, no other Person has, and neither Seller Party has
offered to any Person, any equity interest in such Seller Party or any option,
warrant or other right to acquire the same, except for those options or rights
listed on SCHEDULE 4.1. The Seller Parties are, and have been, at all times
since the date of their formation, Single Purpose Entities. ASC is a
wholly-owned subsidiary of Monroe Operator, and except as set forth on SCHEDULE
4.1, neither ASC, nor any other Person has offered to any Person, any equity
interest in ASC or any option, warrant or other right to acquire the same,
except for those options or rights listed on SCHEDULE 4.1.
AUTHORIZATION; ENFORCEMENT. Each Seller Party has the requisite limited
liability company power and authority to conduct its business as it is now being
conducted and as proposed to be conducted and to execute, deliver and carry out
the terms of this Agreement, all documents and agreements necessary to give
effect to the provisions of this Agreement, including the Lease, and to
consummate the transactions contemplated hereby and thereby. All limited
liability company actions required to be taken by the applicable Seller Party to
authorize the execution, delivery and performance of this Agreement, the Lease,
as well as all documents, agreements and instruments executed by the Seller
Parties which are necessary to give effect thereto (collectively, the "Seller
Party Instruments") and all transactions contemplated hereby and thereby, have
been duly and properly taken or obtained in accordance and in compliance with
each Seller Party's Governing Documents. No other action on the part of the
Seller Parties or the
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Seller Parties' directors (or other Person's possessing and exercising similar
control and authority over either Seller Party) or Equity Constituents is
necessary to authorize the execution, delivery and performance of this
Agreement, the Lease, the Seller Party Instruments and all transactions
contemplated hereby and thereby. This Agreement, the Seller Party Instruments
and all agreements to which the Seller Parties will become a party hereunder,
including the Lease, are and will constitute the valid and legally binding
obligations of the Seller Parties, and are and will be enforceable against the
Seller Parties in accordance with the respective terms hereof or thereof, except
as enforceability may be restricted, limited or delayed by applicable
bankruptcy, insolvency or other similar laws affecting creditors' rights
generally and except as enforceability may be subject to and limited by general
principles of equity (regardless of whether considered in a proceeding in equity
or at law).
ABSENCE OF CONFLICTS. The Seller Parties' execution, delivery and performance of
this Agreement, the Lease and the Seller Party Instruments, and the consummation
of the transactions contemplated hereby and thereby will not, with or without
the giving of notice and/or the passage of time: (i) violate or conflict with
any provision of either Seller Party's Governing Documents; (ii) violate or
conflict with any provision of any Law to which either the Seller Party or any
of its Equity Constituents is subject; (iii) violate or conflict with any
judgment, order, writ or decree of any court applicable to either of the Seller
Parties; (iv) result in or cause the creation of a Lien on the Land or any of
the Assets; or (v) except as disclosed on SCHEDULE 4.3, result in the breach or
termination of any provision of, or create rights of acceleration or constitute
a default under, the terms of any indenture, mortgage, deed of trust, contract,
agreement or other instrument to which either Seller Party is a party or by
which either of the Seller Parties or any of the Assets is bound.
CONSENTS AND APPROVALS. Except as set forth on SCHEDULE 4.4 attached hereto, no
license, permit, qualification, order, consent, authorization, approval or
waiver of, or registration, declaration or filing with, or notification to, any
Governmental Entity or other Person is required to be made or obtained by or
with respect to either of the Seller Parties in connection with the execution,
delivery and performance of this Agreement, the Lease or the Seller Party
Instruments, or the consummation of the transactions contemplated hereby or
thereby.
FINANCIAL STATEMENTS. SCHEDULE 4.5 sets forth (i) the unaudited balance sheet of
the Monroe Operator (the "Balance Sheet") at August 31, 2005 (the "Balance Sheet
Date") and (ii) the unaudited statement of income and cash flows of the Monroe
Operator for the month ended August 31, 2005 (the financial statements described
in this sentence, being referred to herein collectively, as the "Financial
Statements"). Except as set forth on SCHEDULE 4.5, the Financial Statements have
been prepared in accordance with GAAP, are based on the books, records and
accounts of the Monroe Operator and fairly present the financial condition and
results of operations, cash flows and stockholders' or partners' equity of the
Monroe Operator as of the respective dates thereof and for the respective
periods indicated therein, except (i) that the Financial Statements do not
include complete note (including footnote) disclosure as required by GAAP; and
(ii) that the Financial Statements are subject to normal, year-end adjustments
which are not, and will not be, material in amount or effect, either
individually or in the aggregate.
NO UNDISCLOSED LIABILITIES. Except as set forth on SCHEDULE 4.6 attached hereto,
the Monroe Operator has no liabilities or obligations, whether absolute,
accrued, contingent or otherwise,
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including any potential future liability arising out of acts or omissions which
have already occurred, which are not fully and accurately reflected or reserved
against in the Balance Sheet except for liabilities or obligations that may have
arisen in the Ordinary Course of Business since the Balance Sheet Date (none of
which results from, arises out of, relates to, is in the nature of, or was
caused by any breach of contract, breach of warranty, tort, infringement or
violation of law), and the Monroe Operator has no Knowledge of any fact,
condition or circumstance which could form the basis of any Claim in respect of
any such liability or obligation.
ABSENCE OF CHANGES. Except as set forth on SCHEDULE 4.7 attached hereto, since
the Balance Sheet Date, each Seller Party has, as applicable:
except as otherwise provided in this Agreement, conducted its business only in
the Ordinary Course of Business;
not suffered any change, event or circumstance which has had, or would be
reasonably expected to have, a Material Adverse Effect;
preserved its legal existence and retained its business organization intact;
paid or satisfied all of its material debts, liabilities or obligations in the
Ordinary Course of Business;
timely made all applicable filings with Governmental Entities;
not mortgaged, pledged, subjected to Lien, charged, encumbered or granted a
security interest in or to any of its assets (including, without limitation, any
of the Assets);
not suffered any material damage, destruction or loss (whether or not covered by
insurance) affecting any of its assets;
not made or suffered any change to its Governing Documents;
maintained its books and records in accordance with GAAP, consistent with past
practices;
not received any notice of any defections of or other problems related to its
prospective medical staff; and
not agreed or offered, whether in writing or otherwise, to take any action
described in Section 4.7(a) through Section 4.7(j) above.
PHYSICIANS. SCHEDULE 4.8 sets forth the names of all of the physicians who are
Equity Constituents, directors or officers of each Seller Party as well as the
names of all physicians who may be admitted to the staff of the Hospital (the
"Physicians"). This information will be kept confidential.
TAXES. Each Seller Party has filed or caused to be filed all Tax Returns of such
Seller Party which have become due (taking into account valid extensions of time
to file) prior to the date hereof. Such Tax Returns are accurate and complete in
all material respects, and each Seller
14
Party has paid or caused to be paid all Taxes for the periods covered by such
Tax Returns, whether or not shown to be due on such Tax Returns. There are (i)
no outstanding Liens for any Taxes that have been filed by any Governmental
Entity against either Seller Party or the Business, any of the Assets or the
other assets of either Seller Party (other than for ad valorem taxes not yet due
and payable), and (ii) no claims being asserted in writing with respect to any
Taxes relating to either of the Seller Parties, the Land, the Business, any of
the Assets or any other assets of either of the Seller Parties for which either
of the MPT Parties could be held liable, and there is no basis for the assertion
of any such claim. The Land has not been classified under any designation
authorized by law to obtain a special low ad valorem tax rate or to receive a
reduction, abatement or deferment of ad valorem taxes which, in such case, could
result in additional, catch-up or roll-back ad valorem taxes in the future in
order to recover the amounts previously reduced, abated or deferred, and the
transactions contemplated by this Agreement will not cause a reassessment or
increase of ad valorem taxes.
TITLE AND CONDITION OF THE REAL PROPERTY.
A legal description of the Land is set forth on EXHIBIT A. Except as set forth
on SCHEDULE 4.10(a), the Monroe Seller is the sole and exclusive legal and
equitable owner of all right, title and interest in the Land and at Closing will
have and convey to Acquisition Sub good and marketable title in fee simple to
the Land, free and clear of any and all Liens, encumbrances, restrictions or
easements of any kind whatsoever (other than Permitted Encumbrances).
Neither the sale of the Land pursuant to this Agreement nor the construction and
operation of the Hospital thereon violates or will violate any applicable law,
statute, ordinance, rule, regulation, order or determination of any Governmental
Entity or any restrictive covenant or deed restriction (recorded or otherwise)
affecting the Land, including, without limitation, any applicable zoning or
subdivision ordinance or building code, flood disaster law or health and
environmental law or regulation.
With regard to the Land, except as set forth on SCHEDULE 4.10(c), to the
Knowledge each Seller Party, there are no (i) encroachments onto or from
adjacent properties; (ii) violations of set-back, building or side lines; (iii)
encroachments onto any easements or servitudes located on such Land; (iv)
pending or, to the Knowledge of each Seller Party, threatened boundary line
disputes; (v) portions of such Land located in a flood plain or in an area
defined as a wetland under applicable state or federal law; (vi) cemeteries or
gravesites located on, within or under the Land; or (vii) mine shafts under the
Land or any other latent defects, such as sinkholes, regarding or affecting the
Land.
Upon completion of the Hospital, the water, sewer, gas and electricity lines,
storm sewer and other utility systems shall be adequate to serve the utility
needs of the Real Property.
Except as set forth on SCHEDULE 4.10(e), neither the whole nor any portion of
the Land has been condemned, requisitioned or otherwise taken by any public
authority (a "Public Taking"), and no notice of any Public Taking has been
received by either Seller Party with regard to any portion of the Land. The
Seller Parties have no Knowledge of any Public Taking being threatened or
contemplated. The Seller Parties have no Knowledge of any public improvements
which have been ordered to be made and/or which have not heretofore been
assessed, and, to the Knowledge
15
of the Seller Parties, there are no special, general or other assessments
pending or threatened against or affecting any of the Land (except those
expressly identified in the Title Commitment).
Except as set forth on SCHEDULE 4.10(f), there are no Claims, actions, suits,
proceedings or investigations pending or, to the Knowledge of either Seller
Party, threatened, against or affecting all or any portion of the Land.
Except as set forth on SCHEDULE 4.14 and SECTION 11.3, all licenses, permits,
certificates of need (if applicable), authorizations and approvals required by
all Governmental Entities having jurisdiction, have been issued for the
Hospital, and, as of the Closing, all of the same will be in full force and
effect.
Neither Seller Party has Knowledge of any fact or condition which would result
in the termination of the current access from the Land to any presently existing
public highways and/or roads adjoining or situated on the Land or to sewer or
other utility services to serve the Land
SCHEDULE 4.10(i) attached hereto sets forth an accurate and complete list of all
leases, subleases, commitment letters, letters of intent and other rental
agreements, whether written or oral, now or hereafter in effect, if any, that
grant or will grant a possessory interest in and to any space in the Real
Property or that otherwise assign or convey rights with regard to the Real
Property (collectively referred to as the "Tenant Leases"). SCHEDULE 4.10(i)
designates which of the Tenant Leases described therein are with the referral
sources (as determined by any of the Healthcare Fraud Laws) of the Monroe
Operator and/or any of its Affiliates. SCHEDULE 4.10(i) specifies the rent and
security deposit, if any, for each Tenant Lease. The Monroe Operator has
provided MPT with complete, correct and current copies of all Tenant Leases. The
Monroe Operator shall provide MPT prior to Closing with Tenant Lease estoppels
in form satisfactory to MPT from all Tenants under the applicable Tenant Leases.
Except for the Tenant Leases and any other items listed on SCHEDULE 4.10(i),
there are no purchase contracts, leases of space, options, rights of first
refusal or other written or oral agreements of any kind whereby any person or
entity will have acquired or will have any basis to assert any right, title or
interest in, or right to the possession, use, enjoyment or proceeds of, any part
or all of the Real Property.
The Monroe Operator has not accepted the payment of rent or other sums due under
any of the Tenant Leases for more than one (1) month in advance. As of the
Closing, none of the Tenant Leases and none of the rents or other charges
payable thereunder, if any, will have been assigned, pledged or encumbered.
Except as set forth on SCHEDULE 4.10(j), as of the Closing, no brokerage or
leasing commissions or other compensation will be due or payable to any Person
with respect to, or on account of, the Lease or any Tenant Lease or any
extensions or renewals thereof, if any, excepting those agreements entered into
or accepted in writing by MPT.
Except as set forth on SCHEDULE 4.10(k): (i) the Tenant Leases are freely
assignable by the Monroe Operator to Acquisition Sub, have not been modified,
amended or assigned, are legally valid, binding and enforceable against the
Monroe Operator (and, to the Knowledge of the Monroe Operator, against the other
parties to such Tenant Leases) in accordance with their respective terms and are
in full force and effect; (ii) there are no monetary defaults and no material
nonmonetary defaults by Monroe Operator or, to the best of the Monroe Operator's
Knowledge, any other party to the Tenant Leases; (iii) the Monroe Operator has
not received
16
written notice of any default, offset, counterclaim or defense under any of the
Tenant Leases; (iv) no condition or event has occurred which with the passage of
time or the giving of notice or both would constitute a default or breach by the
Monroe Operator of the terms of any of the Tenant Leases; and (v) the terms and
structure of the Tenant Leases comply with all Healthcare Fraud Laws.
COMPLIANCE WITH ENVIRONMENTAL LAWS. Except as set forth in that certain Phase I
environmental site assessment of the Land dated July 2, 2004, prepared by Alt &
Xxxxxx Engineering, Inc., and as otherwise set forth in SCHEDULE 4.11 attached
hereto:
No Governmental Entity or any nongovernmental third party has notified either
Seller Party, or to each Seller Party's Knowledge, any other party, of any
alleged violation or investigation of any suspected violation under the
Environmental Laws in connection with the ownership or operation of the Land,
including any litigation or cause of action alleging personal injury or property
damage caused by exposure to, or the disposal, release or migration of, any
Hazardous Materials. To the Seller Parties' Knowledge, the Land is in full
compliance with the Environmental Laws;
With respect to the ownership of the Land, to the Knowledge of each Seller
Party, no Hazardous Materials have been stored, disposed of or arranged for the
disposal thereon, except in compliance with the Environmental Laws and there are
no underground storage tanks located at, on or under the Land;
To the Knowledge of each Seller Party, there have been no actions, activities,
circumstances, conditions, events or incidents, including, without limitation,
the generation, transportation, treatment, storage, release, emission,
discharge, presence or disposal of any Hazardous Materials on or from any of the
Land that could form the basis of any Environmental Claim against either Seller
Party or either MPT Party;
Neither Seller Party has contractually assumed or succeeded to any liability of
any direct or indirect predecessors or any other Person related or with respect
to any Environmental Law; and
To the Knowledge of each Seller Party, there are no conditions presently
existing on, at or emanating from the Land, including, without limitation, any
condition created or that came into being prior to the ownership of the Land by
the Monroe Seller that may result in any liability, investigation or clean-up
cost under any Environmental Law.
LITIGATION. There is no suit, action, proceeding, inquiry or investigation (a
"Claim") against or involving either Seller Party or any of its properties or
rights, pending or, to the Knowledge of each Seller Party threatened (including,
without limitation any suit, action, proceeding or investigation pursuant to
Title 11 of the Civil Rights Act of 1964, the Americans with Disabilities Act,
the Age Discrimination in Employment Act, the Family and Medical Leave Act of
1993, or any other federal, state or local law regulating employment) nor to the
Knowledge of each Seller Party are there any facts which might result in or form
the basis of any such Claim. Except as set forth on SCHEDULE 4.12 attached
hereto, there is no judgment, decree, injunction, rule or order of any
Governmental Entity or any other Person (including, without limitation, any
arbitral tribunal) outstanding against either Seller Party and neither Seller
Party is in violation of
17
any term of any judgment, decree, injunction or order outstanding against it.
Furthermore, there is no Claim by or before any Governmental Entity or other
Person pending or, to the Knowledge of each Seller Party, threatened which
questions or challenges the validity of this Agreement or any action taken or to
be taken by the Seller Parties pursuant to this Agreement or in connection with
the transactions contemplated hereby, and there is no basis for any such Claim.
CONTRACTS, OBLIGATIONS AND COMMITMENTS. SCHEDULE 4.13 attached hereto sets forth
a list of all contractual agreements, whether written or oral, or relating to or
affecting the assets or the operation of the Business to which either Seller
Party is a party (the "Contracts"). The Seller Parties have provided to MPT
complete and correct copies of all of the Contracts. Except as set forth on
SCHEDULE 4.13, (i) the Contracts are legally valid, binding and enforceable
against the Seller Parties (and, to the Knowledge of each Seller Party, against
the other parties thereto) in accordance with their respective terms and are in
full force and effect; (ii) there are no defaults by either of the Seller
Parties, or to the Knowledge of each Seller Party, any other party to the
Contracts; (iii) neither Seller Party has received written notice of any
default, offset, counterclaim or defense under any Contract; (iv) no condition
or event has occurred which with the passage of time or the giving of notice or
both would constitute a default or breach by either Seller Party of the terms of
any Contract; and (v) the Contracts are in compliance with Healthcare Fraud
Laws.
LICENSES. SCHEDULE 4.14 attached hereto sets forth a current, complete and
accurate list of all licenses, permits, certificates of need and other
authorizations of Governmental Entities (the "Permits") which will be required
for the construction and development and operation of the Hospital and the
conduct of the Business. Except as set forth in SCHEDULE 4.14, Monroe Operator
possesses all such Permits, such Permits are in full force and effect and true
and correct copies of such Permits have been delivered to MPT. No notice from
any authority in respect to, as applicable, the threatened, pending or possible
denial, revocation, termination, suspension or limitation of any of the Permits
has been received by the Seller Parties and neither Seller Party has Knowledge
of any proposed or threatened issuance of any such notice or of any grounds
which would form the basis for any such notice.
GOOD TITLE TO ASSETS. Except as set forth on SCHEDULE 4.15, each Seller Party
has good, absolute and marketable title to, and unrestricted possession of, all
of the Assets (other than the Land, which is addressed in Section 4.10 above),
free and clear of all Liens (other than Permitted Encumbrances) and any adverse
Claims of third parties.
ACCREDITATION; MEDICARE AND MEDICAID; THIRD PARTY PAYORS. Except as set forth on
SCHEDULE 4.16 attached hereto, the Monroe Operator will enroll and become a
provider authorized to participate without restriction under Title XVIII of the
Social Security Act ("Medicare") and Title XIX of the Social Security Act
("Medicaid"), the Medicare and the Medicaid programs of the State of Indiana and
the TRICARE/CHAMPUS programs (the "Government Programs"). The Monroe Operator
expects to receive Medicare or Medicaid reimbursement with respect to the
Hospital and to be eligible to receive payment without restriction under
Medicare and Medicaid. Neither the Monroe Operator nor any Person who is either
an officer, director or manager of, or directly or indirectly owns an equity
interest in, the Monroe Operator, nor, to the Knowledge of each Seller Party,
any Physician or Service Provider (i) has been excluded,
18
suspended or debarred from, or otherwise ineligible for, participation in any
Government Program including Medicare and Medicaid, or (ii) has been convicted
of a criminal or civil offense related to conduct that would trigger an
exclusion from any Government Program.
HEALTHCARE REGULATORY MATTERS.
Except as described on SCHEDULE 4.17 hereto, no Seller Party, or, to the
Knowledge of each Seller Party, any Physician or Service Provider (i) is a party
to or has received notice of the commencement of any investigation or debarment
proceedings or any governmental investigation or action (including any civil
investigative demand or subpoena) under the False Claims Act (31 U.S.C. Section
3729 et seq.), the Anti-Kickback Act of 1986 (41 U.S.C. Section 51 et seq.), the
Federal Health Care Programs Anti-Kickback statute (42 U.S.C. Section
1320a-7a(b)), the Ethics in Patient Referrals Act of 1989, as amended (Xxxxx
Law) (42 U.S.C. 1395nn), the Civil Money Penalties Law (42 U.S.C. Section
1320a-7a), or the Truth in Negotiations (10 U.S.C. Section 2304 et seq.), Health
Care Fraud (18 U.S.C. 1347), Wire Fraud (18 U.S.C. 1343), Theft or Embezzlement
(18 U.S.C. 669), False Statements (18 U.S.C. 1001), False Statements (18 U.S.C.
1035), and Patient Inducement Statute or equivalent state statutes or any rule
or regulation promulgated by a Governmental Entity with respect to any of the
foregoing ("Healthcare Fraud Laws") affecting either of the Seller Parties or
the Business (and no grounds for any such proceeding, investigation or action
exist); and (ii) is not in full compliance with all applicable Healthcare Fraud
Laws.
Except as described on SCHEDULE 4.17 hereto, no Seller Party or, to the
Knowledge of each Seller Party, any Physician or Service Provider has ever been
charged or implicated in any violation of any state or federal statute or
regulation involving false, fraudulent or abusive practices relating to its
participation in state or federally sponsored reimbursement programs, including
but not limited to false or fraudulent billing practices. No Seller Party, or,
to the Knowledge of each Seller Party, any Physician or Service Provider has
engaged in any of the following: (i) knowingly and willfully making or causing
to be made a false statement or representation of a material fact in any
applications for any benefit or payment under Medicare or Medicaid program; (ii)
knowingly and willfully making or causing to be made any false statement or
representation of a material fact for use in determining rights to any benefit
or payment under Medicare or Medicaid program; (iii) failing to disclose
knowledge of any event affecting the initial or continued right to any benefit
or payment under Medicare or Medicaid program on its own behalf or on behalf of
another, with intent to secure such payment or benefit fraudulently; (iv)
knowingly and willfully soliciting, paying, or receiving any remuneration
(including kickback, bribe or rebate), directly or indirectly, overtly or
covertly, in cash or in kind or offering to pay such remuneration (a) in return
for referring an individual to a Person for the furnishing or arranging for the
furnishing of any item or service for which payment may be made in whole or in
part by Medicare or Medicaid, or (b) in return for purchasing, leasing or
ordering or arranging for or recommending the purchasing, leasing or ordering of
any good, facility, service, or item for which payment may be made in whole or
in part by Medicare or Medicaid; (v) presenting or causing to be presented a
claim for reimbursement for services that is for an item or service that was
known or should have been known to be (a) not provided as claimed, or (b) false
or fraudulent; or (vi) knowingly and willfully making or causing to be made or
inducing or seeking to induce the making of any false statement or
representation (or omitting to state a fact required
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to be stated therein or necessary to make the statements contained therein not
misleading) of a material fact with respect to (a) a facility in order that the
facility may qualify for Governmental Entity certification or (b) information to
be provided under 42 USC Section 1320a-3.
The Physicians' investment in and ownership of the Monroe Operator (including
the transfer of the Ambulatory Surgery Center business to ASC and the payments
to be made to Xxxxx X. Xxxxxx, M.D. in connection therewith), if any, and the
referral of patients to the Hospital and the Business by such Physicians do not
violate any applicable Laws, including any Healthcare Fraud Law.
XXXX-XXXXXX OBLIGATIONS. The Seller Parties shall not have any patient care or
other obligations under the Federal Xxxx-Xxxxxx program with respect to the
operation of the Hospital.
MEDICAL STAFF MATTERS. Except as set forth in SCHEDULE 4.19 attached hereto,
there are no pending or, to the Knowledge of each of the Seller Parties,
threatened appeals, challenges, disciplinary or corrective actions, or disputes
involving applicants to the medical staff of the Hospital. For confidentiality
purposes, all persons identified on SCHEDULE 4.19 are identified by a
Hospital-assigned number rather than name. True and correct copies of Medical
Staff Bylaws of the Hospital, the Hospital's Medical Staff Rules and
Regulations, and the Hospital's Medical Staff Hearing Procedures, all as
proposed to be in effect following completion of the Hospital Improvements, have
been previously delivered by the Seller Parties to MPT.
COMPLIANCE WITH LAW. Each Seller Party (a) is in material compliance with every
applicable law, rule, regulation, ordinance, license, permit and other
governmental action and authority and every order, writ, and decree of every
Governmental Entity in connection with the ownership, conduct, operation and
maintenance of the Business and its ownership and use of its assets, and no
event has occurred or circumstance exists which (without notice or lapse of
time) would result in any noncompliance with any such law, rule, regulation,
ordinance, license permit, order, writ or decree; and (b) has timely made or
given all filings and notices required to be made by such Seller Party with the
regulatory agencies of any Governmental Entity.
INTANGIBLE PROPERTY. A true and complete list of the trademarks, service marks,
and other intangible assets of the Seller Parties to be used in the operation of
the Hospital is set forth in SCHEDULE 4.21 (the "Intangible Property") attached
hereto. The Seller Parties own or possess adequate, enforceable licenses or
other rights to use all of the Intangible Property, and no rights thereto have
been granted to others by the Seller Parties. Except as set forth in SCHEDULE
4.21, all of the Intangible Property is owned or used by the Seller Parties free
and clear of all assignments, licenses, restrictions, encumbrances, charges or
claims for infringement, and none is subject to any outstanding order, decree,
judgment, stipulation or charge. There is no unauthorized use, disclosure,
infringement or misappropriation of any of the Intangible Property by any third
party. The Seller Parties' use of the Intangible Property does not infringe upon
or otherwise violate the rights of others. No one has asserted to either Seller
Party that its use of the Intangible Property infringes upon the patents, trade
secrets, trade names, trademarks, service marks, copyrights or other
intellectual property rights of any other Person.
RECORDS. True and complete copies of each Seller Party's Governing Documents
have been delivered to MPT prior to the execution and delivery of this
Agreement. The books of account,
20
minute books, stock record books and other records of the Seller Parties, all of
which have been made available to MPT, are complete and correct. The minute
books of the Seller Parties contain records of all meetings and other company
actions of the directors (or other Persons, however designated, possessing
and/or exercising similar authority and control over the Seller Parties) and
Equity Constituents of the Seller Parties, and have been delivered to MPT prior
to the execution and delivery of this Agreement.
SUBSIDIARIES. Except as set forth on SCHEDULE 4.23 attached hereto, no Seller
Party owns any Subsidiary.
BROKERS. Except as set forth on SCHEDULE 4.24 attached hereto, no Person is or
will be entitled to any brokerage, finder's or other fee, commission or payment
in connection with or as a result of the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of either of the Seller
Parties.
THE AMBULATORY SURGERY CENTER.
SCHEDULE 4.25(a) sets forth (i) the unaudited balance sheet of PMC (the "PMC
Balance Sheet") at June 30, 2005 (the "PMC Balance Sheet Date") and (ii) the
unaudited statement of income and cash flows of PMC for the six (6) month period
ended June 30, 2005 (the financial statements described in this sentence, being
referred to herein collectively, as the "PMC Financial Statements"). The PMC
Financial Statements set forth on SCHEDULE 4.25(a) have been prepared on a cash
basis, are based on the books, records and accounts of PMC and fairly present
the financial condition and results of operations, cash flows and stockholders'
or partners' equity of PMC as of the respective dates thereof and for the
respective periods indicated therein, except that the PMC Financial Statements
are subject to normal year-end adjustments which are not, and will not be,
material in amount or effect, either individually or in the aggregate.
Except as set forth on SCHEDULE 4.25(b) attached hereto, PMC has no liabilities
or obligations, whether absolute, accrued, contingent or otherwise, including
any potential future liability arising out of acts or omissions which have
already occurred, which are not fully and accurately reflected or reserved
against in the PMC Balance Sheet, or which would cause any appraisal or
valuation to be misleading or fail to accurately reflect the fair market value
of the Ambulatory Surgery Center, except for liabilities or obligations that may
have arisen in the Ordinary Course of Business since the PMC Balance Sheet Date
(none of which results from, arises out of, relates to, is in the nature of, or
was caused by any breach of contract, breach of warranty, tort, infringement or
violation of law), and the Seller Parties have no Knowledge of any fact,
condition or circumstance which could form the basis of any Claim in respect of
any such liability or obligation.
Except as described on SCHEDULE 4.25(c) hereto, neither PMC, nor, to the
Knowledge of each Seller Party, any physician or service provider with respect
to the Ambulatory Surgery Center (i) is a party to or has received notice of the
commencement of any investigation or debarment proceedings or any governmental
investigation or action (including any civil investigative demand or subpoena)
under any Healthcare Fraud Laws affecting PMC or PMC's operation of the
Ambulatory Surgery Center (and no grounds for any such proceeding, investigation
or action exist); and (ii) is not in full compliance with all applicable
Healthcare Fraud Laws.
21
PMC (i) is in material compliance with every applicable law, rule, regulation,
ordinance, license, permit and other governmental action and authority and every
order, writ, and decree of every Governmental Entity in connection with the
ownership, conduct, operation and maintenance of the Ambulatory Surgery Center
business and its ownership and use of its assets, and no event has occurred or
circumstance exists which (without notice or lapse of time) would result in any
noncompliance with any such law, rule, regulation, ordinance, license permit,
order, writ or decree; and (ii) has timely made or given all filings and notices
required to be made by PMC with the regulatory agencies of any Governmental
Entity.
(e) A true, correct and complete copy the valuation report for the Ambulatory
Surgery Center has been delivered to the MPT Parties.
REPRESENTATIONS COMPLETE. The representations and warranties made by the Seller
Parties in this Agreement and the statements made in or information contained on
any Schedules or certificates furnished by the Seller Parties pursuant to this
Agreement do not contain and will not contain, as of their respective dates and
as of the Closing Date, any untrue statement of a material fact, nor do they
omit or will they omit, as of their respective dates or as of the Closing Date,
to state any material fact necessary to make the statements contained herein or
therein, in the light of the circumstances under which they were made, not
misleading.
REPRESENTATIONS AND WARRANTIES OF THE MPT PARTIES
The MPT Parties hereby represent and warrant to the Seller Parties as of the
date hereof and as of the Closing Date as follows:
ORGANIZATION. MPT is a limited partnership duly organized, validly existing and
in good standing under the laws of the State of Delaware. MPT is duly qualified
as a foreign limited partnership in good standing under the laws of the
jurisdiction(s) in which the nature of the business conducted, or the assets
owned, operated and/or leased by MPT requires or makes such qualification
necessary. Acquisition Sub is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of Delaware
and qualified as a foreign limited liability company in good standing under the
laws of the State of Indiana. Acquisition Sub is and always has been a Single
Purpose Entity, which currently holds no assets and was created for the sole
purpose of the completion of the transactions contemplated herein. Acquisition
Sub is wholly-owned by MPT.
AUTHORIZATION; ENFORCEMENT, ABSENCE OF CONFLICTS. Each MPT Party has, as
applicable, the requisite limited partnership or limited liability company power
and authority to conduct its respective businesses as they are now being
conducted and as proposed to be conducted and to execute, deliver and carry out
the terms of this Agreement and all documents and agreements necessary to give
effect to the provisions of this Agreement, and to consummate the transactions
contemplated hereby and thereby. All limited partnership or limited liability
company actions required to be taken by MPT and Acquisition Sub to authorize the
execution, delivery and performance of this Agreement, as well as all other
documents, agreements and instruments executed and delivered by MPT and
Acquisition Sub which are necessary to give effect thereto (all such other
documents, agreements and instruments executed and delivered by MPT being
22
referred to herein collectively as the "MPT Instruments"; and, all such other
documents, agreements and instruments executed and delivered by Acquisition Sub
being referred to herein collectively as the "Acquisition Sub Instruments") and
all transactions contemplated hereby and thereby, have been duly and properly
taken or obtained in accordance and compliance with, as applicable, MPT's
Governing Documents and Acquisition Sub's Governing Documents. No other action
on the part of either MPT or Acquisition Sub, or the respective Equity
Constituents thereof, is necessary to authorize the execution, delivery and
performance of, as applicable, this Agreement, the MPT Instruments, the
Acquisition Sub Instruments and all transactions contemplated hereby and
thereby. This Agreement, the MPT Instruments and the Acquisition Sub Instruments
are and will constitute the valid and legally binding obligations of MPT and
Acquisition Sub, as applicable, and are and will be enforceable against MPT and
Acquisition Sub, as applicable, in accordance with their respective terms,
except as enforceability may be restricted, limited or delayed by applicable
bankruptcy, insolvency or other similar laws affecting creditors' rights
generally and except as enforceability may be subject to and limited by general
principles of equity (regardless of whether considered in a proceeding in equity
or at law).
ABSENCE OF CONFLICTS. The execution, delivery and performance of this Agreement
by MPT and Acquisition Sub, the execution, delivery and performance of the MPT
Instruments by MPT, the execution, delivery and performance of the Acquisition
Sub Instruments by Acquisition Sub, and the consummation of the transactions
contemplated hereby and thereby will not, with or without the giving of notice
and/or the passage of time: (i) violate or conflict with any provision of the
Governing Documents of either MPT Party; (ii) violate or conflict with any
provision of any Law to which either MPT Party is subject or (iii) violate or
conflict with any judgment, order, writ or decree of any court applicable to
either MPT Party.
LITIGATION. There is no Claim pending or, to the Knowledge of either MPT Party,
threatened against or affecting either MPT Party that has had or would
reasonably be expected to have a material adverse effect on either MPT Party's
business, properties, assets, financial condition or ability to perform this
Agreement or any aspect of the transactions contemplated hereby and, to the
Knowledge of the MPT Parties, there is no basis for any such Claim.
POSSESSION OF PERMITS. MPT and Acquisition Sub, where applicable, possess all
franchises, certificates, licenses, permits and other authorizations from
governmental political subdivisions or regulatory authorities, and all patents,
trademarks, service marks, trade names, copyrights, licenses and other rights,
free from burdensome restrictions, that are necessary for the ownership,
maintenance and operation of any of their properties and assets, except where
the failure to possess any of the foregoing would not prevent or impede MPT or
Acquisition Sub from consummating the transactions contemplated hereby.
COMPLIANCE WITH LAW. MPT and Acquisition Sub, where applicable (a) are in
compliance with every applicable law, rule, regulation, ordinance, license,
permit and other governmental action and authority and every order, writ, and
decree of every Governmental Entity in connection with the ownership, conduct,
operation and maintenance of their businesses, and their ownership and use of
their assets, except where non-compliance would not prevent or impede MPT or
Acquisition Sub from consummating the transactions contemplated hereby or the
ability of MPT or Acquisition Sub to perform this Agreement and, to the
Knowledge of the MPT Parties, no
23
event has occurred or circumstance exists which (without notice or lapse of
time) would result in any noncompliance with any such law, rule, regulation,
ordinance, license permit, order, writ or decree which would prevent or impede
either MPT Party from consummating the transactions contemplated hereby; and (b)
have timely made or given all filings and notices required to be made by MPT and
Acquisition Sub with the regulatory agencies of any Governmental Entity, except
where such failure would prevent or impede MPT or Acquisition Sub from
consummating the transaction contemplated hereby.
BROKERS. No Person is or will be entitled to any brokerage, finder's or other
fee, commission or payment in connection with or as a result of the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
any MPT Party.
REPRESENTATIONS COMPLETE. The representations and warranties made by the MPT
Parties in this Agreement and the statements made in or information contained on
any Schedules or certificates furnished by the MPT Parties pursuant to this
Agreement do not contain and will not contain, as of their respective dates and
as of the Closing Date, any untrue statement of a material fact, nor do they
omit or will they omit, as of their respective dates or as of the Closing Date,
to state any material fact necessary in order to make the statements contained
herein or therein, in the light of the circumstances under which they were made,
not misleading.
TITLE AND SURVEY
SURVEY. MPT shall cause to be prepared, at the Seller Parties' expense, a
current ALTA/ACSM Land Title Survey of the Land, prepared by a duly licensed
land surveyor. The survey shall be currently dated, shall show the location on
the Land of any improvements, fences, evidence of abandoned fences, ponds,
creeks, streams, rivers, easements, roads, rights-of-way, means of ingress and
egress, location of all utilities serving the Land, and encroachments, and shall
contain a legal description of the boundaries of the Land by metes and bounds
and the appropriate flood zone designation and the total number of acres
constituting the Land. The surveyor shall certify to the MPT Parties and to the
Title Company that the survey is correct and that there are no visible
discrepancies, conflicts, encroachments, overlapping of improvements, fences,
evidence of abandoned fences, ponds, creeks, streams, rivers, easements, roads
or rights-of-way except as are shown on the survey plat. Any and all matters
shown on such survey shall be legibly identified by appropriate volume and page
recording references with dates of recording noted. If MPT shall disapprove such
survey for any reason in MPT's sole discretion, MPT may treat such objection as
a title objection and request that it be cured. If the Seller Parties are unable
to cure any objection to the survey within twenty (20) days following delivery
of notice to the Seller Parties thereof, then MPT may terminate this Agreement
upon written notice to the Seller Parties.
TITLE INSURANCE. MPT will cause to be prepared, at the Seller Parties' expense,
a title commitment for the issuance of an ALTA Owner's Policy in form and
substance acceptable to MPT, and issued by a title insurance company acceptable
to MPT and qualified to insure titles in the State of Indiana (the "Title
Company"), in the amount of the Purchase Price, covering title to the Land at a
date not earlier than the date hereof and showing good and marketable title,
subject
24
only to the Permitted Encumbrances. All of the standard exceptions within the
policy and the exceptions for mechanic's and materialmen's liens and the survey
exception shall be deleted. If MPT shall disapprove any items stated in the
Title Commitment or the Exception Documents, MPT may treat such objection as a
title objection and request that it be cured. If the Seller Parties are unable
to cure any exception or objection to title that is not a Permitted Encumbrance
within twenty (20) days following delivery of notice to the Seller Parties
thereof, then MPT may terminate this Agreement upon written notice to the Seller
Parties.
PRE-CLOSING COVENANTS
From and after the execution and delivery of this Agreement to and including the
Closing Date (unless a later date or time is specified), the applicable party
shall observe the following covenants:
NO SHOP. Neither the Seller Parties nor any investment banker, attorney,
accountant, representative or other Person retained by or on behalf of the
Seller Parties shall, directly or indirectly, initiate contact with, respond to,
solicit or encourage any inquiries, proposals or offers by, participate in any
discussions or negotiations with, enter into any agreement with, disclose any
information concerning the Seller Parties or the Seller Parties' assets to,
afford any access to the properties, books or records of the Seller Parties to,
or otherwise assist, facilitate or encourage, any person in connection with any
possible proposal regarding a sale or lease of all or any material portion of
the Assets (including all or any portion of the Land) or any similar
transaction. The Seller Parties shall notify MPT immediately if any discussions
or negotiations are sought to be initiated, any inquiry or proposal is made, or
any such information is requested.
ACCESS. Between the date hereof and the Closing (the "Review Period"), the
Seller Parties shall (i) afford MPT and its authorized representatives full and
complete access to the Seller Parties' employees, medical staff, and other
agents and representatives and during normal working hours to all books,
records, offices and other facilities of the Seller Parties, (ii) permit MPT to
make such inspections and to make copies of such books and records as it may
reasonably require and (iii) furnish MPT with such financial and operating data
and other information relating to the Seller Parties and the Land as MPT may
from time to time reasonably request. MPT and its authorized representatives
shall conduct all such inspections under the supervision of personnel of the
Seller Parties in a manner that will minimize disruptions to the business and
operations of the Seller Parties and in a manner as to maintain the
confidentiality of this Agreement. Nothing herein shall require the Seller
Parties to disclose any information to the other if such disclosure would: (A)
cause significant competitive harm to its competitive position if the
transactions contemplated hereby are not consummated; (B) jeopardize any
attorney-client or other legal privilege; or (C) contravene any Law, fiduciary
duty or binding agreement entered into prior to the date of this Agreement
(including any confidentiality agreement to which it or its affiliates is a
party); provided, however, that if any Seller Party relies on this sentence of
Section 7.2 as a basis for such non-disclosure, such Seller Party shall
nevertheless inform MPT of the general nature of the information not being
disclosed and the basis for such non-disclosure.
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CONFIDENTIALITY. The provisions of the Confidentiality Agreement shall remain
binding and in full force and effect until the Closing. Notwithstanding anything
to the contrary contained herein or in the Confidentiality Agreement, the
confidentiality obligations as they relate to the transactions contemplated by
this Agreement shall not apply to the purported or claimed Federal income tax
treatment of the transactions (the "Tax Treatment") or to any fact that may be
relevant to understanding the purported or claimed Federal income tax treatment
of the transactions (the "Tax Structure"), and each party hereto (and any
employee, representative, or agent of any party hereto) may disclose to any and
all persons, without limitation of any kind, the Tax Treatment and Tax Structure
of the transactions contemplated by this Agreement and any materials of any kind
(including any tax opinions or other tax analyses) that relate to the Tax
Treatment or Tax Structure. In addition, each party hereto acknowledges that it
has no proprietary or exclusive rights to any tax matter or tax idea related to
the transactions contemplated by this Agreement. The preceding sentence is
intended to ensure that the transactions contemplated by this Agreement shall
not be treated as having been offered under conditions of confidentiality for
purposes of the Confidentiality Regulations and shall be construed in a manner
consistent with such purpose. The information contained herein, in the Schedules
hereto or delivered to MPT or its authorized representatives pursuant hereto
shall be subject to the Confidentiality Agreement as Information (as defined and
subject to the exceptions contained therein) until the Closing and, for that
purpose and to that extent, the terms of the Confidentiality Agreement are
incorporated herein by reference. All obligations of MPT under the
Confidentiality Agreement shall terminate simultaneously with the Closing.
REGULATORY AND OTHER AUTHORIZATIONS, NOTICES AND CONSENTS.
Each party hereto shall use all commercially reasonable efforts to obtain all
authorizations, consents, orders and approvals of all Governmental Entities and
officials that may be or become necessary for its execution and delivery of, and
the performance of its obligations pursuant to, this Agreement and each such
party will cooperate fully with the other parties hereto in promptly seeking to
obtain all such authorizations, consents, orders and approvals.
The Seller Parties shall give promptly such notices to third parties and use its
commercially reasonable efforts to obtain such third party consents and estoppel
certificates as MPT may in its sole and absolute discretion deem necessary or
desirable in connection with the transactions contemplated by this Agreement, as
may be or become necessary for its execution and delivery of, and performance of
its obligations under, this Agreement.
MPT shall cooperate and use commercially reasonable efforts to assist the Seller
Parties in giving such notices and obtaining such third party consents and
estoppel certificates; provided, however, that MPT shall not have any obligation
to give any guarantee or other consideration of any nature in connection with
any such notice, consent or estoppel certificate which MPT in its sole and
absolute discretion may deem adverse to the interests of MPT or Acquisition Sub.
MUTUAL COVENANTS. The parties shall use their good faith reasonable efforts to
satisfy the conditions to the closing of the transactions contemplated hereby.
Without limiting the generality of the foregoing, the respective parties shall
execute and/or deliver, or use their
26
respective good faith reasonable efforts to cause to be executed and/or
delivered, the documents contemplated to be executed and/or delivered by them at
Closing.
SCHEDULE UPDATES. From the date hereof until the Closing Date, MPT and
Acquisition Sub, on one hand, and the Seller Parties on the other hand, shall
immediately advise the other parties in writing of any additions or changes to
any Schedule to reflect any deficiencies or inaccuracies in such Schedule or to
reflect circumstances or matters which occur after the date of this Agreement
which, if existing prior to such date, would have been required to be described
in such Schedule; provided, however, that no additions or changes made to any
Schedule to correct deficiencies or inaccuracies in such Schedule shall be
deemed to cure any breach or inaccuracy of a representation or warranty,
covenant or agreement or to satisfy any condition unless otherwise agreed to in
writing by the other parties, but provided further, however, that an addition or
change made to any Schedule to reflect circumstances or matters which occur
after the date of this Agreement shall be deemed to cure a breach or inaccuracy
of a representation or warranty, covenant or agreement, but shall not be deemed
to satisfy any condition unless agreed to in writing by the other party.
CONDUCT OF BUSINESS BY THE SELLER PARTIES PENDING THE CLOSING. Each Seller Party
covenants and agrees that, during the period from the date hereof and continuing
until the earlier of the termination of this Agreement or the Closing Date,
unless MPT shall otherwise agree in writing, the Seller Parties shall conduct
the Business only in, and the Seller Parties shall not take any action except
in, the Ordinary Course of Business and in compliance in all material respects
with all applicable laws and regulations, and that the Seller Parties shall use
reasonable best efforts to preserve substantially intact the business
organization of the Seller Parties, to keep available the services of the
current officers, employees and consultants of the Seller Parties and to
preserve the present relationships of the Seller Parties with medical staff,
suppliers and other persons with which the Seller Parties have significant
business relations and the Seller Parties shall not take any actions or omit to
take any actions which would cause the representations and warranties described
in Section 4.7 to be untrue.
PUBLIC ANNOUNCEMENTS. Prior to the Closing Date, the parties agree to consult
with each other before any party hereto or any of their respective Affiliates
issues any press release or makes any public statement with respect to this
Agreement or the transactions contemplated hereby and, except as may be required
by applicable law or any listing agreement with any national securities
exchange, will not issue, or permit to be issued, any such press release or
make, or permit to be made, any such public statement prior to such
consultation.
CLOSING CONDITIONS
CONDITIONS TO THE OBLIGATIONS OF THE SELLER PARTIES. The obligations of the
Seller Parties to effect the transactions contemplated hereby shall be subject
to the fulfillment of the following condition(s), any one or more of which may
be waived by the Seller Parties:
All of the representations and warranties of the MPT Parties set forth in this
Agreement shall be true and correct when made and as of the Closing Date as if
made on the Closing Date;
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The MPT Parties shall have delivered, performed, observed and complied with all
of the items, instruments, documents, covenants, agreements and conditions
required by this Agreement to be delivered, performed, observed and complied
with by them prior to, or as of, the Closing;
The MPT Parties shall have made the Loan to Monroe Seller;
The MPT Parties shall have executed, where applicable, and delivered to the
Seller Parties the documents referenced in Section 9.3 hereof; and
The MPT Parties shall not have suffered any change, event or circumstance which
has had, or would be reasonably expected to have, a Material Adverse Effect.
CONDITIONS TO THE OBLIGATIONS OF THE MPT PARTIES. The obligations of the MPT
Parties to effect the transactions contemplated hereby shall be further subject
to the fulfillment of the following conditions, any one or more of which may be
waived by the MPT Parties:
All of the representations and warranties of the Seller Parties set forth in
this Agreement shall be true and correct when made and as of the Closing Date as
if made on the Closing Date;
The Seller Parties shall have delivered, performed, observed and complied with
all of the items, instruments, documents, covenants, agreements and conditions
required by this Agreement to be delivered, performed, observed and complied
with by it prior to, or as of, the Closing;
The Seller Parties shall not have suffered any change, event or circumstance
which has had, or would be reasonably expected to have, a Material Adverse
Effect;
MPT shall have completed the due diligence investigations of the Seller Parties
and the Land and shall be satisfied with the results of such investigations;
All necessary approvals, consents, estoppel certificates and the like of third
parties to the validity and effectiveness of the transactions contemplated
hereby have been obtained, and all required governmental filings or approvals,
and lender approvals, have been satisfied;
No portion of the Assets shall have been destroyed by fire or casualty;
MPT shall have received copies of all permits, licenses, certificates of need
and other approvals of governmental authorities required for the proposed
construction and development of the Hospital Improvements for their intended
use;
Intentionally deleted;
MPT shall have received evidence that the Seller Parties are maintaining
insurance on the Assets as required in the Lease and that MPT and its lenders,
if any, are named as additional insureds and, where applicable, loss payees;
The Seller Parties shall have executed where applicable and delivered to the MPT
Parties, as applicable, the documents referenced in Section 9.2 hereof;
28
There shall not have been instituted by any creditor of a Seller Party, any
Governmental Entity or any other Person (other than the Seller Parties or any
Affiliate thereof), any suit, action, proceeding or investigation which would
adversely affect the Assets or seek to restrain, enjoin or invalidate the
transactions contemplated by this Agreement; and
The Appraisal shall have been delivered to MPT and shall reflect an Appraised
Value that equals or exceeds the Projected Total Development Costs.
CLOSING
CLOSING DATE. The closing of the transactions contemplated hereby (the
"Closing") shall be held at the offices of Baker, Donelson, Bearman, Xxxxxxxx &
Xxxxxxxxx, P.C. in Birmingham, Alabama on October _____, 2005, or on such other
date and such other place as the parties hereto shall mutually agree (the actual
date of closing being herein referred to as the "Closing Date").
THE SELLER PARTIES' CLOSING DATE DELIVERABLES. On the Closing Date, the Seller
Parties shall deliver to the MPT Parties the documents listed below.
Duly executed bills of sale and assignments transferring all Assets other than
the Land in form and substance satisfactory to MPT;
A duly executed general warranty deed in substantially the form as EXHIBIT
9.2(b) (the "Deed") conveying the Land from Monroe Seller to Acquisition Sub;
A certified copy of the resolutions of the governing body and/or Equity
Constituents of the Seller Parties and ASC dated as of the date hereof and
authorizing the Seller Parties' execution, delivery and performance of this
Agreement and all other documents to be executed in connection herewith;
Certificates of existence and good standing of each Seller Party and ASC from
the secretary of state of Indiana, dated the most recent practical date prior to
the Closing Date;
A statement certified by the chief financial officer of Monroe Operator
indicating that the Monroe Operator has received from its Equity Constituents,
and retained, equity capital contributions in an amount not less than Nine
Million and No/100 Dollars ($9,000,000.00);
Intentionally deleted;
The Title Commitment and Title Policy in form and substance satisfactory to MPT;
A Survey dated the most recent practical date prior to the Closing Date in form
and substance satisfactory to MPT;
29
A Phase I Environmental Site Assessment Report dated the most recent practical
date prior to the Closing Date in form and substance satisfactory to MPT (and a
Phase II if recommended by the Phase I Report);
Property condition reports for the Land, dated the most recent practical date
prior to the Closing Date and in form and substance satisfactory to MPT;
A Zoning Compliance Letter/Certificate dated the most recent practical date
prior to the Closing Date in form and substance satisfactory to MPT;
Tenant Estoppel Certificates in form and substance satisfactory to MPT;
Owner's Affidavits in form and substance satisfactory to MPT;
The Search Reports dated the most recent practical date prior to the Closing
Date in form and substance satisfactory to MPT;
A Non-Foreign Affidavit in form and substance satisfactory to MPT;
The Lease, together with a Memorandum of Lease Agreement in form and substance
satisfactory to MPT;
The Assignment of Rents and Leases in substantially the form attached hereto as
EXHIBIT 9.2(q);
The Security Agreements in substantially the form attached hereto as EXHIBIT
9.2(r);
The legal opinions of Xxxxxxx, Xxxxx & Diamond as counsel for the Seller
Parties, substantially in the form attached hereto as EXHIBIT 9.2(s) (it being
understood and agreed that Seller Parties shall cause Xxxxxx & Thorneburg, LLP
to deliver, within two (2) Business Days following the Closing Date, an opinion
in form and substance satisfactory to the MPT Parties addressing Indiana law as
it relates to the matters opined to in said Xxxxxxx, Xxxxx & Diamond opinion);
At the Closing, each Seller Party shall have furnished to the MPT Parties a
certificate dated the Closing Date signed by such Seller Party to the effect
that all of the representations and warranties of the Seller Parties contained
in the Agreement (considered collectively) and each of these representations and
warranties (considered individually) remain in all respects true and correct as
of the Closing Date as if made on such date and that the Seller Parties have
performed and satisfied in all material respects all covenants and conditions
required by this Agreement to be performed or satisfied by the Seller Parties on
or prior to Closing;
All necessary approvals, consents, estoppel certificates and the like of third
parties or Governmental Entities to the validity and effectiveness of the
transactions contemplated hereby;
The Noncompete Agreement substantially in the form attached as EXHIBIT 9.2(v);
The Promissory Note;
The Repurchase Agreement in the form attached hereto as EXHIBIT C-1; and
30
Such other instruments and documents as the MPT Parties reasonably deem
necessary to effect the transactions contemplated hereby.
MPT PARTIES' CLOSING DATE DELIVERABLES. On the Closing Date, the MPT Parties
shall deliver to the Seller Parties the documents listed below.
A certified copy of the resolutions of the governing body of each MPT Party
dated as of the date hereof authorizing the execution, delivery and performance
of this Agreement and all other documents to be executed in connection herewith;
Certificates of existence and good standing of each MPT Party from the Delaware
Secretary of State of the State of Delaware, dated the most recent practical
date prior to the Closing Date;
Certificates of good standing and foreign qualification of Acquisition Sub from
the Secretary of State of the State of Indiana, dated the most recent practical
date prior to the Closing Date;
The Lease, together with a Memorandum of Lease in form and substance
satisfactory to MPT;
The Assignment of Rents and Leases in substantially the form attached hereto as
EXHIBIT 9.2(q);
An Opinion of Baker, Donelson, Bearman, Xxxxxxxx & Xxxxxxxxx, P.C., as counsel
for the MPT Parties substantially in the form attached as EXHIBIT 9.3(f);
At the Closing, each MPT Party shall have furnished to the Seller Parties a
certificate dated the Closing Date signed by such MPT Party to the effect that
all of the representations and warranties of such MPT Party contained in the
Agreement (considered collectively) and each of these representations and
warranties (considered individually) remain in all respects true and correct as
of the Closing Date as if made on such date and that such MPT Party has
performed and satisfied in all material respects all covenants and conditions
required by this Agreement to be performed or satisfied by such MPT Party on or
prior to Closing;
Any bills of sale and assignments requiring the signature of any MPT Party;
The Security Agreement in substantially the form attached hereto as EXHIBIT
9.2(r);
The Noncompete Agreements substantially in the form attached as EXHIBIT 9.2(v);
and
The Repurchase Agreement in the form attached as EXHIBIT C-1.
COMMITMENT AND CONSTRUCTION FEES. The Monroe Operator shall, at Closing, pay to
MPT (or its designated Affiliates) (i) the Construction Fee; and (ii) an amount
in cash equal to one half of one percent (0.5%) of the Projected Total
Development Costs (the "Commitment Fee") less all amounts the Monroe Operator
has previously paid to MPT pursuant to and as required by the Letter of Intent
and the Commitment Letter (the "Commitment Fee Deposit"); provided, however,
that if, in the event the transactions contemplated by this Agreement fail to
close (A) by or before June 1, 2006, for any reason or no reason, then the
Commitment Fee may, in the sole discretion of MPT, be increased to an amount
equal to Three Quarters of One Percent
31
(0.75%) of the Projected Total Development Costs; or (B) for any reason, the
Commitment Fee Deposit shall be considered a fee earned by MPT and MPT shall not
be required to refund any portion thereof to the Monroe Operator.
TERMINATION
TERMINATION PRIOR TO CLOSING. Notwithstanding anything to the contrary in this
Agreement, the remaining obligations of the parties hereunder may be terminated
and the transactions contemplated hereby abandoned at any time prior to Closing:
(i) by mutual written consent of the Seller Parties and MPT; (ii) by the Seller
Parties if the conditions set forth in Section 8.1 shall not have been satisfied
on or before October 7, 2005; or (iii) by MPT if the conditions set forth in
Section 8.2 shall not have been satisfied on or before October 7, 2005.
NOTICE OF TERMINATION PRIOR TO CLOSING. In the event of the termination of this
Agreement pursuant to Section 10.1, the party terminating this Agreement shall
give prompt written notice thereof to the other party, and the transactions
contemplated hereby shall be abandoned, without further action by any party.
Each filing, application and other submission relating to the transactions
contemplated hereby shall, to the extent practicable, be withdrawn from the
person to which it was made. The confidentiality provisions set forth in this
Agreement shall survive any termination of this Agreement. Notwithstanding any
statement contained in this Agreement to the contrary, termination of this
Agreement shall not relieve any party from liability for any breach or violation
of this Agreement that arose prior to such termination.
POST CLOSING COVENANTS
JCAHO COMPLIANCE. The Monroe Operator shall, as of the Operational Date or as
soon as reasonably practicable thereafter, apply for and obtain accreditation by
the Joint Commission on Accreditation of Healthcare Organizations ("JCAHO").
HIPAA COMPLIANCE. The Monroe Operator shall use commercially reasonable efforts
to be in compliance, upon the Operational Date, with the standards for privacy
of individually-identifiable health information which were promulgated pursuant
to the Health Insurance Portability and Accountability Act of 1996 ("HIPAA").
NECESSARY PERMITS. Except as set forth in SCHEDULE 11.3, the Monroe Operator
either has or has begun applying for, and will have, as of the Operational Date,
obtained all Permits from all applicable federal, state and local authorities
and any other regulatory agencies necessary or proper in order to operate the
Hospital and to conduct the Business.
PARTICIPATION IN GOVERNMENT PROGRAMS. The Monroe Operator shall take all actions
necessary to cause the Hospital to be in compliance with the conditions of
participation for the Government Programs and to receive all approvals or
qualifications necessary for capital reimbursement.
COMPLIANCE WITH WHOLE HOSPITAL EXCEPTION. The Monroe Operator shall operate in
compliance with the Xxxxx Law whole hospital exception as set forth in 42 C.F.R.
Section 411.356(c)
32
and will not operate as a specialty hospital as defined in 42 C.F.R. Section
411.351. In addition, the Monroe Operator will not cease providing any services
as relied upon by counsel in issuing the opinion attached hereto as EXHIBIT
9.2(s) without obtaining written approval of MPT which will not be required if
42 C.F.R Section 411.356(c)(3)(ii) has been repealed or expired and twelve (12)
months has elapsed without the subsequent passage of legislation reinstating the
specialty hospital conditions of 42 C.F.R. 411.351.
POST-CLOSING ACCESS TO INFORMATION. The Seller Parties and the MPT Parties
acknowledge that, subsequent to Closing, each may need access to the Assets and
to information, documents or computer data in the control or possession of the
other for purposes of concluding the transactions contemplated herein and for
audits, investigations, compliance with governmental requirements, regulations
and requests, the prosecution or defense of third party claims. Accordingly, the
Seller Parties and the MPT Parties agree that they will make available to the
other parties and their agents, independent auditors and/or governmental
entities such documents and information as may be available relating to the
Assets and the Hospital and will permit the other parties to make copies of such
documents and information at the requesting party's expense.
SURVIVAL. The provisions of this Article XI shall survive Closing.
INDEMNIFICATION
INDEMNIFICATION OF THE MPT PARTIES. Subject to the limitations set forth in this
Article, the Seller Parties agree to jointly and severally indemnify, defend and
hold harmless the MPT Parties, their Affiliates and its respective officers,
directors, members, (general and limited) partners, shareholders, employees,
agents and representatives (collectively, the "MPT Indemnified Parties") from
and against all Damages asserted against or incurred by the MPT Indemnified
Parties or any of them arising out of or in connection with or resulting from
(i) any breach of, misrepresentation associated with or failure to perform under
any covenant, representation, warranty or agreement under this Agreement or the
other agreements contemplated hereby on the part of the Seller Parties, or (ii)
any liability relating to the operation of the Business prior to Closing.
INDEMNIFICATION OF THE SELLER PARTIES. Subject to the limitations set forth in
this Article, the MPT Parties hereby agree to indemnify, defend and hold
harmless the Seller Parties, the Seller Parties' Affiliates and their respective
officers, directors, members, (general and limited) partners, shareholders,
employees, agents and representatives (collectively, the "Seller Indemnified
Parties") from and against all Damages asserted against or incurred by the
Seller Indemnified Parties or any of them arising out of or in connection with
or resulting from (i) any breach of, misrepresentation associated with or
failure to perform under any covenant, representation, warranty or agreement
under this Agreement or the other agreements contemplated hereby on the part of
the MPT Parties, or (ii) the ownership and operation of the Assets by the MPT
Parties after Closing.
NOTIFICATION AND DEFENSE OF CLAIMS.
33
A party entitled to be indemnified pursuant to Section 12.1 or Section 12.2 (the
"Indemnified Party") shall notify the party liable for such indemnification (the
"Indemnifying Party") in writing of any claim or demand which the Indemnified
Party has determined has given or could give rise to a right of indemnification
under this Agreement, as soon as possible after the Indemnified Party becomes
aware of such claim or demand; provided, that the Indemnified Party's failure to
give such notice to the Indemnifying Party in a timely fashion shall not result
in the loss of the Indemnified Party's rights with respect thereto except to the
extent the Indemnified Party is materially prejudiced by the delay.
If the Indemnified Party shall notify the Indemnifying Party of any claim or
demand pursuant to the provisions hereof, and if such claim or demand relates to
a claim or demand asserted by a third party against the Indemnified Party (a
"Third Party Claim"), the Indemnifying Party shall have the obligation either
(i) to pay such claim or demand, or (ii) defend any such Third Party Claim with
counsel reasonably satisfactory to the Indemnified Party. After the Indemnifying
Party has assumed the defense of such Third Party Claim, the Indemnifying Party
shall not be liable to the Indemnified Party under this Section 12.3 for any
legal or other expenses subsequently incurred by the Indemnified Party in
connection with the defense thereof other than reasonable costs of
investigation, provided that the Indemnified Party shall have the right to
employ counsel, at the Indemnifying Party's expense, to represent it if (A) in
the Indemnified Party's reasonable opinion the Indemnifying Party is not
diligently prosecuting the defense of such Third Party Claim, (B) such Third
Party Claim involves remedies other than monetary damages and such remedies, in
the Indemnified Party's reasonable judgment, could have a material adverse
effect on such Indemnified Party, (C) the Indemnified Party may have available
to it one or more defenses or counterclaims that are inconsistent with one or
more defenses or counterclaims that may be alleged by the Indemnifying Party, or
(D) the Indemnified Party believes in its reasonable discretion that a conflict
of interest exists between the Indemnifying Party and the Indemnified Party with
respect to such third party claim or action, and in any such event the
reasonable fees and expenses of such separate counsel for the Indemnified Party
shall be paid by the Indemnifying Party. Subject to and without waiving
privilege, the Indemnified Party shall make available to the Indemnifying Party
or its agents all records and other materials in the Indemnified Party's
possession reasonably required by it for its use in contesting any third party
claim or demand.
No Indemnified Party may settle or compromise any claim or consent to the entry
of any judgment with respect to which indemnification is being sought hereunder
without the prior written consent of the Indemnifying Party, unless (i) the
Indemnifying Party fails to assume and diligently prosecuting the defense of
such claim pursuant to Section 12.3(a) or (ii) such settlement, compromise or
consent includes an unconditional release of the Indemnifying Party from all
liability arising out of such claim and does not contain any equitable order,
judgment or term which includes any admission of wrongdoing or could result in
any liability(including regulatory liability) of the Indemnifying Party or which
would otherwise in any manner affect, restrain or interfere with the business of
the Indemnifying Party or any Affiliate of the Indemnifying Party. An
Indemnifying Party may not, without the prior written consent of the Indemnified
Party, settle or compromise any claim or consent to the entry of any judgment
with respect to which indemnification is being sought hereunder unless such
settlement, compromise or consent includes an unconditional release of the
Indemnified Party from all liability arising
34
out of such claim and does not contain any equitable order, judgment or term
which includes any admission of wrongdoing or could result in any liability
(including regulatory liability) of the Indemnified Party or which would
otherwise in any manner affect, restrain or interfere with the business of the
Indemnified Party or any of the Indemnified Party's Affiliates.
LIMITATIONS ON CLAIMS.
Notwithstanding anything in this Article XII to the contrary, no Indemnified
Party's Damages shall be payable pursuant to this Article XII unless and until
the aggregate amount of Damages asserted against the applicable Indemnifying
Party under this Article XII equals or exceeds Fifty Thousand Dollars ($50,000)
(the "Liability Threshold") and then only to the extent of such excess.
The indemnification rights provided for under this Article XII shall be limited
in certain respects as follows: (i) the rights of any Seller Indemnified Party
to seek indemnification under this Article XII shall terminate on the second
anniversary of the Closing Date (the "Seller Parties' Indemnity Period"); (ii)
the rights of any MPT Indemnified Party to seek indemnification under this
Article XII shall terminate on the second anniversary of Closing Date (the "MPT
Parties' Indemnity Period"), except that the MPT Parties' Indemnity Period shall
terminate on the fifth anniversary of the Closing Date with respect to any Claim
related to any breach or inaccuracy of any representation or warranty set forth
in Section 4.10 or Section 4.11 hereof. Notwithstanding the foregoing, if, prior
to the close of business on the last day of, as applicable, the Seller Parties'
Indemnity Period or the MPT Parties' Indemnity Period, an Indemnifying Party
shall have been properly notified of a claim for indemnity hereunder and such
claim shall not have been finally resolved or disposed of at such date, such
claim shall continue to survive and shall remain a basis for indemnity hereunder
until such claim is finally resolved or disposed of in accordance with the terms
hereof.
The foregoing limitations on time and amount shall not apply to any Damages
asserted or incurred by any Indemnified Party arising or resulting from (i) any
act or omission of an applicable Indemnifying Party which constitutes fraud,
(ii) any breach by an Indemnifying Party of its post-closing covenants, or (iii)
in the case of any MPT Indemnified Party, the Excluded Liabilities.
Following full indemnification as provided for hereunder, the Indemnifying Party
shall be subrogated to all rights of the Indemnified Party with respect to all
Persons relating to the matter for which indemnification has been made.
Notwithstanding any provision of this Agreement to the contrary, in the event
any claim is made by one party to this Agreement against another party to this
Agreement, the Non-Prevailing Party, and only the Non-Prevailing Party, shall be
responsible for paying the reasonable legal fees, costs and expenses of the
other party to the claim and the term "Damages," as used herein with respect to
a Non-Prevailing Party, shall be deemed not to include the legal fees and
expenses of such Non-Prevailing Party.
INVESTIGATIONS. The right to indemnification based upon breaches or inaccuracies
of representations, warranties and covenants will not be affected by any
investigation conducted
35
with respect to, or knowledge acquired (or capable of being acquired) at any
time, whether before or after the execution and delivery of this Agreement or
the Closing Date, whether as a result of disclosure by a party pursuant to this
Agreement or otherwise, with respect to the accuracy or inaccuracy of or
compliance with any such representation, warranty or covenant. The waiver of any
condition based on the accuracy of any representation or warranty, or on the
performance of or compliance with any covenant, will not affect a party's right
to indemnification, payment of damages or other remedies based on such
representations, warranties and covenants.
TREATMENT OF INDEMNIFICATION PAYMENTS. All indemnification payments made
pursuant to this Article XII shall be treated by the parties for income Tax
purposes as adjustments to the Purchase Price, unless otherwise required by
applicable Law.
INSURED LOSSES. The amount of any damages for which indemnification is provided
under this Article XII shall be net of any duplicative amounts recovered by the
Indemnified Party under insurance policies or from unaffiliated third Persons
with respect to such damages; provided, however, such Indemnified Party shall
have no duty or obligation to seek recovery of any available insurance proceeds
in advance of exercising its rights or remedies under this Article XII to seek
indemnification by the Indemnifying Party.
EXCLUSIVE REMEDY. FROM AND AFTER CLOSING, THE PARTIES AGREE AND ACKNOWLEDGE THAT
THE INDEMNIFICATION RIGHTS PROVIDED IN THIS ARTICLE XII SHALL BE THE SOLE AND
EXCLUSIVE REMEDY OF THE PARTIES TO THIS AGREEMENT FOR BREACHES OF THIS AGREEMENT
AND FOR ALL DISPUTES ARISING UNDER OR RELATING TO THIS AGREEMENT AND ANY
ADDITIONAL AGREEMENTS OR DOCUMENTS EXECUTED OR DELIVERED IN OR ARISING OUT OF
THE TRANSACTIONS CONTEMPLATED HEREBY, EXCEPT FOR POST-CLOSING COVENANTS, CASES
WHERE SPECIFIC PERFORMANCE IS AVAILABLE AS A REMEDY AND EXCEPT IN CASES OF
FRAUD.
DISPUTE RESOLUTION
GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS EXECUTED AND
PERFORMED IN SUCH STATE, WITHOUT GIVING EFFECT TO CONFLICTS OF LAWS PRINCIPLES.
JURISDICTION AND VENUE. THE PARTIES CONSENT TO PERSONAL JURISDICTION IN
DELAWARE. THE PARTIES AGREE THAT ANY ACTION OR PROCEEDING ARISING FROM OR
RELATED TO THIS AGREEMENT SHALL BE BROUGHT AND TRIED EXCLUSIVELY IN THE STATE OR
FEDERAL COURTS OF DELAWARE. EACH OF THE PARTIES IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUCH ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT. THE SELLER PARTIES EXPRESSLY ACKNOWLEDGE THAT
DELAWARE IS A FAIR, JUST AND REASONABLE FORUM AND AGREE NOT TO SEEK REMOVAL OR
TRANSFER OF ANY ACTION FILED BY THE MPT PARTIES IN SAID
36
COURTS. FURTHER, THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY CLAIM
THAT SUCH SUIT, ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
SERVICE OF ANY PROCESS, SUMMONS, NOTICE OR DOCUMENT BY REGISTERED MAIL ADDRESSED
TO A PARTY AT THE ADDRESS DESIGNATED PURSUANT TO SECTION 14.2 SHALL BE EFFECTIVE
SERVICE OF PROCESS AGAINST SUCH PARTY FOR ANY ACTION OR PROCEEDING BROUGHT IN
ANY SUCH COURT. A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT MAY BE ENFORCED IN ANY OTHER COURT TO WHOSE JURISDICTION ANY OF THE
PARTIES IS OR MAY BE SUBJECT.
MISCELLANEOUS
ASSIGNMENT. This Agreement is not assignable by any party without the prior
written consent of the other parties hereto. Notwithstanding the foregoing, MPT
and Acquisition Sub may at any time and without the consent of the Seller
Parties assign all of their respective rights and obligations hereunder to one
or more of its Affiliates; provided, however, that no such assignment shall
relieve or release MPT or Acquisition Sub from their obligations hereunder.
NOTICE. All notices, demands, requests and other communications or documents
required or permitted to be provided under this Agreement shall duly be in
writing and shall be given to the applicable party at its address set forth
below or such other address as the party may later specify for that purpose by
notice to the other party:
If to any Seller Party: Monroe Hospital, LLC
0000 Xxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxxx, M.D.
With a copy to: Xxxxxxx, Xxxxx & Diamond, LLC
00 Xxxx Xxxxxx Xxxxxx
Xxxxx, Xxxx 00000
Attention: Xxxxx X. Xxxxx, Esq.
If to any MPT Party: c/o Medical Properties Trust, Inc.
0000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
With a copy to: Baker, Donelson, Bearman, Xxxxxxxx &
Xxxxxxxxx, P.C.
000 00xx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxx, Esq.
Each notice shall, for all purposes, be deemed given and received:
37
if by hand, when delivered;
if given by nationally recognized and reputable overnight delivery
service, the Business Day on which the notice is actually received by the
party; or
if given by certified mail, return receipt requested, postage prepaid, the
date shown on the return receipt as having been received or refused.
SYNDICATION. Subject to applicable healthcare regulatory requirements (including
the Healthcare Fraud Laws), MPT will permit up to thirty percent (30%) of
Acquisition Sub to be owned by certain of the Physicians. MPT and the Monroe
Operator will work together to decide which of the Physicians receive an
opportunity to invest in Acquisition Sub. The Physicians will invest on an equal
basis with MPT. Subject to applicable healthcare regulatory requirements
(including the Healthcare Fraud Laws), MPT shall provide financing to those
Physicians who are offered, and wish to acquire, interests in Acquisition Sub in
an amount equal to all or any portion of their respective investments in
Acquisition Sub. Such financing shall be evidenced by a note which shall be
secured by such Physician's interest in Acquisition Sub and bear interest at a
rate equal to the Base Rate (as defined in the Lease). Such notes shall have
maturity of seven (7) years, be payable, in whole or in part, at any time prior
to maturity and shall be subject to such further terms and conditions as are
customary in similar transactions.
SECURITIES OFFERING AND FILINGS. Notwithstanding anything contained herein to
the contrary, the Seller Parties agree to cooperate with MPT in connection with
any securities offerings, filings or financing transactions and, in connection
therewith, the Seller Parties shall furnish MPT with such financial and other
information as MPT shall request. MPT shall have the right of access, at
reasonable business hours and upon advance notice, to the Land and all
documentation and information relating to the Land and have the right to
disclose any information regarding this Agreement, the Commitment Letter, any
Seller Party, the Land and all other agreements executed in connection herewith
and all other documents in connection with the transactions contemplated hereby,
and such other additional information which MPT may reasonably deem necessary.
EXPENSES. The Seller Parties shall pay all costs and expenses incurred by the
Seller Parties and the MPT Parties in connection with the transactions
contemplated hereby, including, without limitation, the cost of survey,
appraisal, environmental, title and other third-party reports and all document
stamps, transfer, excise, recording, gains, sales, bulk sales, use and similar
conveyance Taxes and fees imposed by reason of and associated with the
transactions contemplated hereby and by deficiency, interest or penalty asserted
with respect thereto, as well as the cost of the survey, the title insurance and
all title endorsements required by the MPT Parties and their lenders, and all
attorneys' fees an expenses.
CAPTIONS. The section and paragraph headings or captions appearing in this
Agreement are for convenience only, are not a part of this Agreement, and are
not to be considered in interpreting this Agreement.
ENTIRE AGREEMENT; MODIFICATION. This Agreement, including the Exhibits and
Schedules hereto, and other written agreements executed and delivered at Closing
by the parties hereto,
38
constitute the entire agreement and understanding of the parties with respect to
the subject matter of this Agreement. This Agreement supersedes any prior oral
or written agreements between the parties with respect to the subject matter of
this Agreement. It is expressly agreed that there are no verbal understandings
or agreements which in any way change the terms, covenants, and conditions set
forth in this Agreement, and that no modification of this Agreement and no
waiver of any of its terms and conditions shall be effective unless it is made
in writing and duly executed by the parties hereto.
SCHEDULES AND EXHIBITS. All Schedules and Exhibits referred to in this Agreement
and attached hereto shall be deemed a part of this Agreement and are hereby
incorporated herein by reference.
SEVERABILITY. In case any one or more of the provisions contained in this
Agreement shall for any reason be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
any other provision hereof, and this Agreement shall be construed as if such
invalid, illegal or unenforceable provision had never been contained herein.
CONSTRUCTION. The parties hereby agree that each has played an equal part in the
negotiations and drafting of this Agreement, and in interpreting the provisions
hereof, therefore, there shall be no construction or interpretation of this
Agreement for or against either party based upon who drafted the same.
FURTHER ASSURANCES. From time to time after the Closing and without further
consideration, the Seller Parties shall execute and deliver to the Company such
instruments of sale, transfer, conveyance, assignment, consent or other
instruments as may be reasonably requested by MPT in order to vest all right,
title and interest of the Seller Parties in and to the assets conveyed and
delivered at the Closing or as otherwise required to carry out the purpose and
intent of this Agreement.
COUNTERPARTS. This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument. Executed signature pages to this Agreement may be
delivered by facsimile transmission and any such signature page shall be deemed
an original.
BINDING EFFECT. This Agreement shall bind and inure to the benefit of the
parties hereto and their successors and assigns; provided, however, that this
Agreement shall not inure to the benefit of any assignee pursuant to an
assignment which violates the terms of this Agreement.
[Signatures appear on the following pages.]
39
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby,
have caused this Agreement to be executed by their duly authorized officers on
the date first written above.
MPT PARTIES:
MPT OPERATING PARTNERSHIP, L.P.
By: /s/ Xxxxxx X. Xxxxx, Xx.
----------------------------
Xxxxxx X. Xxxxx, Xx.
Its: President and Chief Executive Officer
MPT OF BLOOMINGTON, LLC
BY: MPT OPERATING PARTNERSHIP, L.P.
ITS: SOLE MEMBER
By: /s/ Xxxxxx X. Xxxxx, Xx.
--------------------------
Xxxxxx X. Xxxxx, Xx.
Its: President and Chief Executive Officer
40
SELLER PARTIES:
MONROE HOSPITAL, LLC
By: /s/ Xxxxx X. Xxxxxx, M.D.
------------------------------
Name: Xxxxx X. Xxxxxx, M.D.
Title: Manager
SOUTHERN INDIANA MEDICAL
PARK II, LLC
By: /s/ Xxxxx X. Xxxxxx, M.D.
------------------------------
Name: Xxxxx X. Xxxxxx, M.D.
Title: Manager
41
EXHIBIT A
[Legal Description of the Land.]
A-1
EXHIBIT B
LEASE
[See attachment.]
B-1
EXHIBIT C
PROMISSORY NOTE
[See attachment.]
X-0
XXXXXXX X-0
XXXXXXXXXX AGREEMENT
[See attachment.]
C-1-1
EXHIBIT 9.2 (q)
ASSIGNMENT OF RENTS AND LEASES
[See attachment.]
EXHIBIT 9.2(r)
SECURITY AGREEMENT
[See attachment.]
EXHIBIT 9.2(s)
LEGAL OPINION OF XXXXXXX, XXXXX & DIAMOND
[See attachment.]
EXHIBIT 9.2(v)
NONCOMPETE AGREEMENT
[See attachment.]
EXHIBIT 9.3(f)
LEGAL OPINION OF BAKER, DONELSON, BEARMAN, XXXXXXXX & XXXXXXXXX, P.C.
[See attachment.]
