Exhibit 2.10
REGIONAL OFFICE AGREEMENT
This Agreement is made and entered into this 19th day of November, 1996
by and between Continental Medical Systems, Inc., a Delaware corporation ("CMS")
and Regency Rehab Hospitals, Inc., a California corporation ("Regency").
RECITALS
A. CMS and Regency and their affiliates are parties to a series of
Purchase and Sale Agreement pursuant to which CMS and its affiliates have agreed
to sell and Regency and its affiliates have agreed to purchase certain
rehabilitation hospitals, congregate living facilities and outpatient
rehabilitation clinics or the interests therein owned by CMS and its affiliates
(the "Purchase Transaction").
B. In connection with the Purchase Transaction, Regency has agreed to
hire certain employees located at CMS's California regional office and to assume
CMS obligations under the lease with respect to its regional office.
C. CMS and Regency are interested in documenting the terms and
conditions with respect to the
foregoing.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants of the parties set forth herein, IT IS HEREBY AGREED AS
FOLLOWS:
ARTICLE I
ASSIGNMENT AND ASSUMPTION
1.01. Assignment and Assumption of Lease. On the Closing Date (as
defined below), CMS shall sell, assign, transfer and convey to Regency and
Regency shall acquire, accept and assume from CMS, all of CMS's right, title and
interest in and to the following (the "Regional Office Assets"):
(a) That Lease Agreement dated March 24, 1993 between Willow Creek
Plaza Associates Limited Partnership, as lessor, and CMS, as lessee (the
"Regional Office Lease"), including, but not limited to, CMS' leasehold right,
title and interest in and to:
(i) The real property leased by CMS under the terms of the
Regional Office Lease and situated in the State of California and more
particularly described or shown in Exhibit 1.01 (a)(i) (the "Regional
Office Real Property") and the improvements thereon that comprise that
3,637 square foot office (the "Regional Office").
(ii) All equipment, furniture and fixtures located on or used
in connection with the operation of the Regional Office Real Property
whether owned by CMS (the "Owned Regional Office Personal Property") or
leased by CMS either under the Regional Office Lease or under those
contracts and commitments described in Exhibit 1.02(b) (the "Leased
Regional Office Personal Property"), which Leased Regional Office
Personal Property and Owned Regional Office Personal Property is more
fully described in Exhibit 1.02(a)(ii).
(iii) All rights of first refusal, extension rights, and
purchase options set forth in the Regional Office Lease.
1.02. Regency does not assume any liabilities of CMS with respect to
the Regional Office Assets, other than the following (the "Assumed
Liabilities"):
(a) The liability to make the lease and other payments and to perform
any other obligations under the Regional Office Lease which relate to the
periods on and after the Closing Date;
(b) The liability to make the equipment lease and other contract
payments under the contracts and commitments listed on Exhibit 1.02(b) (the
"Assumed Contracts") which relate to the periods on and after the Closing Date;
and
(c) The liability to pay when due the Accrued Benefits (as defined
below).
ARTICLE II
CLOSING
2.01. The assignment and assumption of the Regional Office Assets
shall be effective as of 12:01
a.m. on January 1, 1997 unless extended by mutual agreement of the parties (the
"Outside Closing Date").
2.02. At Closing, CMS shall deliver title to the Regional Office Assets
free and clear of all liens and encumbrances.
2.03. Title to the Regional Office Assets shall be conveyed to
Regency at Closing by CMS's delivery
of the following documents:
(a) CMS shall deliver an Assignment Agreement in form and substance
substantially the same as that attached hereto as Exhibit 2.03(a) pursuant to
which CMS shall convey to Regency CMS's right, title and interest in and to the
Regional Office Lease (the "Assignment Agreement").
(b) A Xxxx of Sale in form and substance substantially the same as that
attached hereto as Exhibit 2.03(b) pursuant to which CMS shall convey to Regency
CMS' right, title and interest in and to the Owned Regional Office Personal
Property.
(c) Such other documents or instruments as may be necessary to convey
title to the Regional Office Assets to Regency in accordance with the terms
hereof.
ARTICLE III
COSTS AND PRORATIONS
The costs of the transaction and the expenses related to the ownership
of the Regional Office Assets shall be allocated between CMS and Regency as
follows:
3.01. CMS and Regency shall share on a 50-50 basis any State and County
transfer or excise taxes due on the transfer of the Regional Office Assets to
Regency.
3.02. Regency shall pay any sales tax due on the transfer of the
Regional Office Assets to Regency.
3.03. CMS shall pay the cost of obtaining and recording any releases
necessary to deliver title to the Regional Office Assets in accordance with the
terms of this Agreement.
3.04. CMS shall pay any reasonable attorneys fees, processing fees and
other fees and expenses contemplated by the terms of the Regional Office Lease
and the Assumed Contracts.
3.05. CMS shall pay any reasonable attorneys fees, processing fees and
other fees and expenses contemplated by the terms of that Amended and Restated
Credit Agreement dated September 26, 1995 between CMS and NationsBank of Texas,
N.A. (the "CMS's Credit Agreement") and Regency shall pay any reasonable
attorneys' fees, processing fees and other fees and expenses contemplated by the
terms of the Credit Agreement dated December 29, 1995 between Regency Health
Services, Inc. and NationsBank of Texas, N.A.
ARTICLE IV
POSSESSION
On the Closing Date, Regency shall be entitled to possession of the
Regional Office Assets.
ARTICLE V
CMS'S REPRESENTATIONS AND WARRANTIES
CMS hereby warrants and represents to Regency that:
5.02. Validity and Conflicts. This Agreement is valid, binding and
enforceable against CMS in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization
other similar laws relating to the enforcement of creditors' rights generally
and by general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law). Subject to CMS obtaining
consent of the landlord under the Regional Office Lease, if applicable, the
execution of this Agreement and the consummation of the transactions
contemplated herein in accordance with the terms hereof will not result in a
breach of the terms and conditions of nor constitute a default under or
violation of CMS's Articles of Incorporation or Bylaws or any law, regulation,
court order, mortgage, note, bond, indenture, agreement, license or other
instrument or obligation to which CMS is now a party or by which any of the
Regional Office Assets may be bound or affected or any agreement, option,
understanding or commitment or any privilege granted by CMS to any other party
to purchase or otherwise acquire the Regional Office Assets or result in the
acceleration of or an increase in the interest rate payable under any
indebtedness to which is a party other than indebtedness of CMS which does not
relate to the Regional Office Assets or indebtedness which is to be discharged
by CMS as of the Closing Date.
5.02. Authority. Subject to CMS obtaining the consent of the landlord
under the Office Lease and the consent of any third parties to the Assumed
Contracts, if applicable. CMS has full corporate power and authority to execute
and to deliver this Agreement and all related documents, and to carry out the
transactions contemplated herein and therein.
5.03 The Regional Office Lease. A true and correct copy of the Regional
Office Lease has been provided by CMS to Regency. The Regional Office Lease
remains in full force and effect and has not been amended or modified. CMS has
not received from the landlord under the Regional Office Lease any written
notice that it is in default of its obligations under the Regional Office Lease
or that any guarantor thereof is in default of its obligations under any
Guaranty delivered in conjunction therewith nor does CMS have knowledge of any
events which, with the passage of time or the giving of notice, would constitute
a material default thereunder. Except as set forth in the Regional Office Lease
with respect to any common areas, CMS enjoys exclusive, peaceful and undisturbed
possession under the Regional Office Lease. There are no security deposits
posted with respect to the Regional Office Lease.
5.04. Necessary Action. CMS has duly and properly taken or obtained or
caused to be taken or obtained, or prior to Closing will have duly and properly
taken or obtained or caused to be taken or obtained, all action necessary for
CMS (i) to enter into and to deliver this Agreement and any and all documents
and agreements executed by CMS in connection herewith or in furtherance hereof
and (ii) to carry out the terms hereof and thereof and the transaction
contemplated herein, which action shall include, but not be limited to,
obtaining the consent of the landlord under the Regional Office Lease, if
required by the terms thereof. No other action by or on behalf of CMS is or will
be necessary to authorize the execution, delivery and performance of this
Agreement and any documents and agreements executed by CMS in connection
herewith or consummation of the transactions contemplated herein. CMS represents
and warrants that as of the date of execution of this Agreement, it has secured
the consent of its Board of Directors and of the Board of Directors of Horizon
to the execution of this Agreement and of any documents and agreements necessary
to carry out the terms hereof and for the consummation of the transactions
contemplated by this Agreement. Nothing herein shall be construed as a guarantee
by CMS that it will be able to secure the consent of the landlord under the
Regional Office Lease and of any third parties under the Assumed Contracts, if
applicable, but rather this paragraph shall be limited to CMS's representation
and warranty that it will use its best efforts to secure the same subject to the
limitations on the costs which CMS must incur in obtaining such consents being
limited in the manner set forth in Paragraph 3.04.
5.05. EVA Bonus. The EVA bonuses to be paid pursuant to Section 12.01
shall be calculated by CMS in a manner consistent with past practices and in
accordance with the terms of the EVA Bonus Plan (the "EVA Calculation"). The EVA
Calculation when prepared shall be true, correct and complete in all material
respects and all bonus payments reflected in said EVA Calculation will be paid
in accordance with Section 12.01.
5.06. Disclosure. No representation or warranty by or on behalf of CMS
contained in this Agreement contains or will contain any untrue statement of a
material fact, or omits or will omit to state any material facts which are
necessary in order to make the statements contained herein in light of the
circumstances under which they were made, not misleading.
ARTICLE VI
REGENCY REPRESENTATIONS AND WARRANTIES
Regency hereby warrants and represents to CMS that:
6.01. Validity and Conflicts. This Agreement is valid, binding and
enforceable against Regency in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
or other similar laws relating to the enforcement of creditors' rights generally
and by general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law). The execution of this
Agreement and the consummation of the transactions contemplated herein have been
approved by the Board of Directors of Regency and do not and will not result in
a breach of the terms and conditions of nor constitute a default under or
violation of the Articles of Incorporation or Bylaws of Regency, or any law,
regulation, court order, mortgage, note, bond, indenture, agreement, license or
other instrument or obligation to which Regency is now a party or by which any
of its assets may be bound or affected.
6.02. Authority. Regency has full corporate power and authority to
execute and to deliver this Agreement and all related documents, and to carry
out the transactions contemplated herein and therein. Regency further has full
power and authority (i) to own the Interests and (ii) to conduct its business
from and after the Closing Date as the same is now being conducted.
6.03. Necessary Action. Regency has such Third Party Consents and
Regulatory Approvals and has duly and properly taken or obtained or caused to be
taken or obtained, or prior to Closing will have duly and properly taken or
obtained or caused to be taken or obtained, all action necessary for Regency (i)
to enter into and to deliver this Agreement and any and all documents and
agreements executed by Regency in connection herewith or in furtherance hereof
and (ii) to carry out the terms hereof and thereof and the transactions
contemplated herein. No other action by or on behalf of Regency is or will be
necessary to authorize the execution, delivery and performance of this Agreement
and any documents and agreements executed by Regency in connection herewith or
consummation of the transactions contemplated herein. Regency represents and
warrants that as of the date of execution of this Agreement, it has secured the
consent of its Board of Directors and of the Board of Directors of Regency to
the execution of this Agreement and of any documents and agreements necessary to
carry out the terms hereof and for the consummation of the transactions
contemplated by this Agreement.
ARTICLE VII
CMS COVENANTS
7.01. Pre-Closing Date. CMS covenants that between the date hereof
and the Closing Date, except as
contemplated by this Agreement or with the consent of Regency, which consent
shall not be unreasonably
withheld, conditioned or delayed, CMS:
(a) Will operate the Regional Office only in the ordinary course and
with due regard to the proper maintenance and repair of any real property or
personal property associated therewith, ordinary wear and tear excepted;
(b) Will not, except in the ordinary course of business, increase the
compensation or bonuses payable or to become payable to any of the employees
located at or connected with the operation of the Regional Office, or grant any
severance benefits to any such employees other than to the extent such bonuses
or severance payments impose no obligation on Regency after the Closing Date;
(c) Will, during normal business hours, provide Regency and its agents
and employees with access on twenty-four (24) hours notice to the books and
records of CMS with respect to the Regional Office provided they do not
interfere with the operation thereof;
(d) Will proceed with all due diligence to secure the consent of the
landlord under the Regional Office Lease and by any third parties under the
terms of the Assumed Contracts, if required by the terms thereof;
(e) Will not amend or modify the Regional Office Lease or the
Assumed Contracts;
(f) Will comply with its obligations under the Regional Office
Lease or the Assumed Contracts.
7.02. Closing Date. On the Closing Date, CMS will deliver the following
to Regency or to a designated
escrow agent in accordance with any written escrow instructions executed by CMS
and Regency:
(a) The Benefits Schedule (as defined in Paragraph 14.01).
(b) A duly executed original of the Assignment and Assumption
Agreement with respect to the
Regional Office Lease.
(c) The duly executed Xxxx of Sale.
In addition, on the Closing Date, the CMS shall pay the closing costs
for which it is responsible under Article IV.
7.03. Post-Closing. CMS covenants and agrees that after the Closing
Date it will:
(a) Take such actions and properly execute and deliver to Regency such
further instruments of assignment, conveyance and transfer as, in the reasonable
opinion of counsel for Regency and CMS, may be reasonably necessary to assure,
complete and evidence the full and effective transfer and conveyance of the
Regional Office Assets.
(b) Fulfill any obligations which it may have under this Agreement
which survive Closing in accordance with the terms hereof or which, by agreement
of the parties, have not been fully performed as of the Closing Date and the
performance of which, by written agreement of the parties, has been extended
until after the Closing Date.
ARTICLE VIII
REGENCY COVENANTS
8.01. Pre-Closing Date. Regency covenants that between the date
hereof and the Closing Date,
except as contemplated by this Agreement or with the consent of CMS, which
consent shall not be unreasonably
withheld, conditioned or delayed:
(a) Unless specifically prohibited by law, Regency will use its best
efforts to cause all of the conditions to Closing set forth in Paragraphs 10.01
and 10.02 which are within its control to be satisfied prior to the Outside
Closing Date and Regency will not take any action inconsistent with its
obligations under this Agreement or which could hinder or delay the consummation
of the transactions contemplated by this Agreement.
8.02. Closing Date. On the Closing Date, Regency will deliver to
the Escrow Agent (unless CMS and
Regency agree in writing in the Escrow Instructions to handle the same outside
of escrow) the executed Office
Lease Assignment Agreement.
8.03. Post-Closing. After the Closing Date, Regency will:
(a) Take such actions and properly execute and deliver such further
instruments as CMS may reasonably request to assure, complete and evidence the
transaction provided for in this Agreement.
(b) Fulfill any obligations which it may have under this Agreement
which survive Closing in accordance with the terms thereof or which, by
agreement of the parties, have not been fully performed as of the Closing Date
and the performance of which, by written agreement of the parties, has been
extended until after the Closing Date.
ARTICLE IX
MUTUAL COVENANTS
9.01. General Covenants. Following the execution of this Agreement,
CMS and Regency agree:
(a) If any event should occur, either within or without the knowledge
or control of any party, which would prevent fulfillment of the conditions to
the obligations of any party hereto to consummate the transactions contemplated
by this Agreement, to use its or their reasonable efforts to cure the same as
expeditiously as possible;
(b) To cooperate fully with each other in preparing, filing,
prosecuting, and taking any other actions which are or may be reasonable and
necessary to obtain the consent of any governmental instrumentality or any third
party, to accomplish the transactions contemplated by this Agreement;
(c) To deliver such other instruments of title, certificates, consents,
endorsements, assignments, assumptions and other documents or instruments, in
form reasonably acceptable to the party requesting the same and its counsel, as
may be reasonably necessary to carry out and/or to comply with the terms of this
Agreement and the transactions contemplated herein;
(d) To confer on a regular basis with the other, report on material
operational matters and promptly advise the other orally and in writing of any
change or event having, or which, insofar as can reasonably be foreseen could
have, a material adverse effect on such party or which would cause or constitute
a material breach of any of the representations, warranties or covenants of such
party contained herein; and
(e) To promptly provide the other (or its counsel) with copies of all
other filings made by such party with any state or federal governmental entity
in connection with this Agreement or the transactions contemplated hereby.
ARTICLE X
CONDITIONS
10.01. Regency Conditions. All obligations of Regency under this
Agreement are subject to the
fulfillment, prior to or as of the Outside Closing Date (as defined below), of
each of the following
conditions any one or more of which may be waived in writing by Regency:
(a) The representations and warranties of CMS contained in this
Agreement shall be true and correct at and as of the Closing Date as though such
representations and warranties were then again made, other than any
representations or warranties which specifically relate to an earlier period,
which shall have been true as of the date thereof.
(b) CMS shall have performed all of its obligations under this
Agreement that are to be performed by it prior to or as of the Closing Date.
(c) Regency and CMS shall have received the consent of the
landlord under the Regional Office
Lease, if applicable.
(d) The closing of the transactions which are the subject of the
agreements described in Exhibit 10.01(d) (the "Other Agreements") shall have
occurred.
10.02. CMS Conditions. All obligations of CMS under this Agreement are
subject to the fulfillment, prior to or as of the Outside Closing Date, of each
of the following conditions any one or more of which may be waived by CMS in
writing:
(a) The representations and warranties of Regency contained in this
Agreement shall be true and correct at and as of the Closing Date as though such
representations and warranties were then again made, other than any
representations or warranties which specifically relate to an earlier period,
which shall have been true as of the date thereof.
(b) Regency shall have performed all of its obligations under this
Agreement that are to be performed by it prior to or as of the Closing Date.
(c) Regency and CMS shall have received the consent of the landlord
under the Regional Office Lease, if required by the terms thereof.
(d) The closing of the transaction which are the subject of the
Other Agreements shall have
occurred.
ARTICLE XI
TERMINATION
This Agreement may only be terminated in the event of a termination of
the Other Agreements.
ARTICLE XII
EMPLOYEE BENEFITS
12.01. On the Closing Date, CMS shall deliver to Regency a schedule
(the "Employee Schedule") which reflects among other things the following with
respect to the following employees located at the regional office, Xxxx Xxxxxx,
Xxxxxx Xxxxxx, Xxxxx Xxxx, Xxxxx Xxxxx, Xxxxxxx Xxxxx, Xxxxx Xxxxxx, Xxxxxxxx
Xxxxx and Xxxx Xxxxxxxx (the "Regional Offices"): (i) their positions and rates
of pay, (iii) a reasonable estimate as of the Closing Date of all earned and
accrued vacation, holiday and sick pay and earned or accrued "EVA" bonuses due
to and/or coming due to the Regional Office Employees (the "Estimated Accrued
Benefits"). Regency shall agree from and after the Closing Date, pay the Actual
Accrued Benefits to the Regional Office as and when due in accordance with
Regency's personnel policies from and after the Closing Date, it being agreed
for the benefit of CMS that such policies shall not be modified by Regency after
Closing with the intent or result being a reduction of benefits accrued in favor
of any of the Regional Office Employee as of the Closing Date. Within a
reasonable period of time following the Closing Date, which shall in no event be
more than thirty (30) days, CMS shall provide Regency with a schedule of the
Accrued Benefits which were earned or accrued as of the Closing Date (the
"Actual Accrued Benefits"). Regency acknowledges and agrees that in the event
the "accrued" EVA bonus due to an employee is more than the EVA bonus shown to
be due to such employee under the terms of the EVA Calculation, CMS shall pay
the EVA bonus amount reflected on the EVA Calculation.
12.02. Regency shall retain all of the Regional Office Employees on
terms which require said Regional Office Employees to perform comparable
services, in a comparable position and at substantially the same base salary as
such Regional Office Employees enjoyed with CMS prior to Closing. CMS or any of
its affiliates shall have the right to employ or offer to employ any Regional
Office Employee who declines to continue employment with Regency. The Regional
Office Employees who elect to accept continued employment with Regency shall
hereinafter be referred to as the "Hired Employees") and as to each of the Hired
Employees, Regency shall recognize each such Hired Employees original hire date
and shall continue to employ each such Hired Employee for a period of no less
than ninety (90) days following the Closing Date unless the employment of such
Hired Employee is terminated in accordance with Regency's personnel policies or
as a result of such Hired Employee's resignation.
12.03. Regency and CMS acknowledge and agree that the provisions of
Section 12.02 are designed solely to ensure that CMS is not required to give
notice to the Regional Office Employees of the "closure" thereof under the
Worker Adjustment and Retraining Notification Act (the "WARN Act") or under any
comparable California state law. Accordingly, Regency agrees to indemnify,
defend and hold harmless CMS from any liability which it may incur under the
WARN Act or under comparable California State law in the event of a violation by
Regency of its obligations thereunder, including a violation which results from
allegations that Regency constructively terminated the Regional Office Employees
as a result of the terms and conditions of employment offered by Regency.
Nothing in Section 12.02 shall, however, create any rights in favor of any
person not a party hereto, including the Regional Office Employees, or
constitute an employment agreement or condition of employment for any employee
of CMS or any affiliate of CMS who is a Retained Employee or a Hired Employee.
12.04. CMS shall offer and provide, as appropriate, group health plan
continuation coverage pursuant to the requirements of Section 601, et seq. of
ERISA and Section 498B of the Internal Revenue Code ("COBRA") to all of the
Regional Office Employees to whom it is required to offer the same under
applicable law. CMS acknowledges and agrees that Regency is not assuming any of
CMS's obligations to its employees under COBRA or otherwise, except as
specifically provided in this Article XIV. As of the Closing Date, all active
Regional Office Employees: (i) who participate as of the Closing Date in group
health insurance coverage sponsored by CMS and (ii) who remain employees of
Regency after the Closing Date, shall be eligible for participation in a group
health plan (as defined for purposes of Internal Revenue Code Section 4980B)
established and maintained by Regency for the general benefit of its employees
and their dependents and all such employees shall be covered without a waiting
period and without regard to any pre-existing condition unless (A) they are
under a waiting period with CMS at the time of Closing, in which case they shall
be required to complete their waiting period while under Regency's group health
plan or (B) they were subject to a pre-existing condition exclusion while under
CMS's group health plan, in which case they shall be subject to the same
exclusion while in Regency's group health plan, which exclusion shall, if
applicable, be subject to the same time limitation while in Regency's employ as
was applicable thereto while said employees were in CMS's employ, with the time
limit calculated from the date the same commenced while in CMS's employ. CMS and
Regency acknowledge and agree that it is the intent of this provision that CMS
shall not be required to provide continued health coverage under ERISA or
Section 4980 of the Internal Revenue Code to any of such employees of the
Corporation who are retained after Closing or to any qualified beneficiary (as
defined for purposes of Section 4980B of the Internal Revenue Code) with respect
to any such employees.
12.05. CMS agrees that the continued employment of the Hired Employees
will be important to the viability of Regency's operations. Accordingly, CMS
agrees that for a period of one year after the Closing Date it will not directly
or indirectly solicit the employment of any of such Hired Employees nor shall it
take any action to directly or indirectly interfere with their employment
relationship with Regency or to induce them in any manner to terminate their
employment relationship with Regency. CMS acknowledges and agrees that Regency
would not be fully compensated by damages in the event of a breach or threatened
breach by CMS of this provision and accordingly agrees that Regency shall be
entitled, without the need to post a bond, to seek an injunction to restrain
such violation or threatened violation of this Paragraph 12.05.
ARTICLE XIII
INDEMNIFICATION
13.01. CMS shall indemnify and hold Regency harmless from and against
an amount equal to any and all damages, liabilities, losses, costs or expenses
(the "Losses") which Regency may incur as a result of the following):
(a) Except as otherwise provided in this Agreement, any obligations
under the Regional Office Lease or related to the Regional Office Assets with
respect to the period prior to the Closing Date;
(b) Any misrepresentation or breach of warranty of CMS set
forth in this Agreement or
nonfulfillment of any agreement on the part of CMS under this Agreement;
(f) Any and all actions, suits, proceedings, demands, assessments,
judgements, reasonable costs and other reasonable expenses, including, but not
limited to, reasonable attorney's fees, incident to the foregoing.
13.02. Regency shall indemnify and hold CMS harmless from and against
any and all damages, liabilities, losses, costs or expenses which it may incur
as a result of:
(a) Except as otherwise provided in this Agreement, any and all
obligations relating to the Regional Office Lease and the Regional Office Assets
from and after the Closing Date;
(b) Any misrepresentation or breach of warranty by Regency
set forth in this Agreement or
nonfulfillment of any agreement on the part of Regency under this Agreement; and
(c) Any and all actions, suits, proceedings, demands, assessments,
judgements, reasonable costs and other reasonable expenses, including, but not
limited to, reasonable attorney's fees, incident to the foregoing.
ARTICLE XIV
MISCELLANEOUS
14.01. Notices. Any notice, request or other communication to be
given by any party hereunder shall
be in writing and shall be sent by registered or certified mail,
postage prepaid, by overnight delivery, hand
delivery or facsimile transmission to the following address:
To CMS: c/o Horizon/CMS Healthcare Corporation
0000 Xxxxxx Xxxxxx Xxxx, X.X.
Xxxxxxxxxxx, XX 00000
Attn: Xxxx Xxxxxxx
Telephone No.: 000-000-0000
Facsimile No.: 505-881-6100
With copy to: Xxxx Xxxxxx, Esq.
c/o Horizon/CMS Healthcare Corporation
0000 Xxxxxx Xxxxxx Xxxx, X.X.
Xxxxxxxxxxx, XX 00000
Telephone No.: 000-000-0000
Facsimile No.: 505-881-6100
To Regency: Regency Rehab Hospitals, Inc.
0000 Xxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxxx
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
with copy to: Regency Rehab Hospitals, Inc.
0000 Xxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxx Xxxxx
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
and with copy to: Xxxxx X. Xxxxxxxxx, Esq.
0000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Telephone No.: 000-000-0000
Facsimile No.: 206-623-1738
Notices shall be deemed given three (3) business days after deposit in
the mail as provided herein or upon actual receipt if sent by overnight
delivery, facsimile transmission or hand delivery.
14.02 Sole Agreement. This Agreement may not be amended or modified in
any respect whatsoever except by instrument in writing signed by the parties
hereto. This Agreement, the Disclosure Letter of each of CMS and Regency and the
documents executed and delivered pursuant hereto constitute the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersede all prior negotiations, discussions, writings and agreements between
them.
14.03. Captions. The captions of this Agreement are for convenience
of reference only and shall not
define or limit any of the terms or provisions hereof.
14.04. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws
of the State of California.
14.05. Severability. Should any one or more of the provisions of
this Agreement be determined to be
invalid, unlawful or unenforceable in any respect, the validity, legality and
enforceability of the remaining
provisions hereof shall not in any way be affected or impaired thereby.
14.06. Counterparts. This Agreement may be executed in any number
of counterparts, each of which
shall be an original; but such counterparts shall together constitute but one
and the same instrument.
14.07 Knowledge Defined. To the extent that any of the representations
and warranties contained in this Agreement are limited by the phrases "to the
knowledge of" or "Regency has no knowledge of" or "CMS has no knowledge of" or
words or phrases of similar import, the same shall mean to the actual knowledge
of any of the corporate officers or directors of the party or its subsidiaries
making said representation or warranty after due and diligent inquiry with
respect thereto. To the extent that any of the representations and warranties
contained in this Agreement refer to verbal notice to a party such notice shall
be deemed to have been received if delivered to any officer of such party or to
an officer of one of its subsidiaries.
14.08. Expenses. Each party shall bear its own costs and
expenses (including legal fees and
expenses) incurred in connection with this Agreement and the transactions
contemplated hereby.
14.09. Third Party Beneficiary. Nothing in this Agreement express or
implied is intended to and shall not be construed to confer upon or create in
any person (other than the parties hereto and their successors and permitted
assigns) any rights or remedies under or by reason of this Agreement, including
without limitation, any right to enforce this Agreement.
14.10. Attorneys' Fees. In the event of a dispute between the parties
hereto with respect to the interpretation or enforcement of the terms hereof,
the prevailing party in any action resulting therefrom shall be entitled to
collect from the other its reasonable costs and attorneys' fees, including its
costs and fees on appeal.
14.11. Construction. The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state or local
statute or law shall be deemed also to refer to all rules and regulations
promulgated thereunder, unless the context requires otherwise. The word
"including" shall mean "including without limitation." The period covered by the
phrase "from and after the Closing Date" shall include the Closing Date.
14.12. Survival. The representations, warranties, covenants or
conditions set forth herein shall survive the Closing for a period of two years
after the Closing; provided, however, that in the event that, at anytime during
that two year period, any claim is made for a breach thereof, the same shall
survive until a final non-appealable resolution thereof. Nothing in this
Paragraph 14.12 shall be construed to limit the indemnity obligations of CMS and
Regency under Paragraphs 13.01 and 13.02 which shall survive for as long as the
matters to which they relate survive by the terms of this Agreement or, if no
such limitation is provided for herein, which shall survive until the expiration
of the applicable statute of limitations with respect to the matters to which
they relate.
14.13. Effectiveness of Agreement. This Agreement shall be of no
effect unless and until each of
the Other Agreements has been executed and delivered by the parties hereto or
thereto.
IN WITNESS WHEREOF, the parties hereby execute this Agreement as of the
day and year first set forth therein.
CONTINENTAL MEDICAL SYSTEMS, INC.
By: ___________________________
Its: ____________________________
REGENCY REHAB HOSPITALS, INC.
By: ____________________________
Its: ____________________________
HORIZON GUARANTY
Horizon/CMS Healthcare Corporation, a Delaware corporation ("Horizon")
as a material inducement to Regency Rehab Hospitals, Inc. ("Regency") to enter
into the Regional Office Agreement between Continental Medical Systems, Inc. and
Regency dated November 19, 1996 (the "Agreement"), hereby unconditionally,
irrevocably and jointly and severally with Seller, guarantees and promises to
and for the benefit of Regency that (i) the representations and warranties of
Seller are true and correct as of the date of execution of the Agreement and
shall be true and correct as of the Closing Date (as modified by any supplements
to the Seller Disclosure Letter to reflect events after the date hereof) and
(ii) Seller shall perform all of its obligations, covenants and agreements,
including, but not limited to, its indemnity obligations under Paragraph 13, to
be performed on its part under the Agreement. If Seller defaults under the
Agreement, Regency may proceed immediately against Horizon or Seller or both to
enforce any rights it has under the Agreement or this Guaranty. Notwithstanding
the foregoing, the representations and warranties of Seller will not survive
beyond the periods applicable thereto set forth in Paragraph 14.12 thereof and
this Guaranty shall not be construed to give Regency a claim or cause of action
against Horizon after the expiration of the applicable survival period for a
breach by Seller of any representation or warranty.
The liability of Horizon hereunder shall not be affected by:
(a) The renewal, extension, modification or termination of the
Agreement by lapse of time or otherwise (all of which are hereby
authorized by Horizon) or a release or limitation of the liability of
Seller or its estate in any bankruptcy or insolvency proceeding;
(b) Any extension in the time for making any payment
due under the Agreement or
acceptance of partial payment from Seller;
(c) The acceptance or release by Regency of any
additional security for the performance
of Seller's obligations under the Agreement ;
(d) The failure during any period of time whatsoever of
Regency to attempt to collect any amount due under the Agreement or to
exercise any remedy available thereunder or any other security
instrument given as security for performance of the same, in the event
of a default in the performance by Seller in its obligations
thereunder;
(e) Any assignment or successive assignments of
Regency's interest under the Agreement
(whether absolute or as collateral);
(f) The assertion by Regency against Seller of any rights or
remedies reserved or granted to Regency under the Agreement , including
the commencement by Regency of any proceedings against Seller upon the
occurrence of a default thereunder; or
(g) Any dealings, transactions or other matter occurring
between Regency and Seller;
whether or not Horizon shall have knowledge or have been notified of or
agreed to any of the foregoing.
Horizon hereby expressly waives:
(a) Notice of acceptance of this Guaranty;
(b) Presentment, demand, notice of dishonor, protest and
notice of protest, and all other notices whatsoever, including, without
limitation, notice of any event or matter described in the first
paragraph hereof; provided, however, that nothing herein shall be
construed as a waiver by Horizon on its own behalf or on behalf of
Seller with respect to any notice required to be provided by Regency
under the terms of the Agreement ;
(c) Any and all claims or defenses based upon lack of
diligence in:
(i) collection of any amount, the payment of which is
guaranteed hereby;
(ii) protection of any collateral or other security for
the obligations which are the
subject of this Guaranty;
(iii) realization upon any other security given for the
obligations which are the subject
of this Guaranty; or
(iv) the discharge, liquidation or reorganization of
Seller in bankruptcy or the
rejection of the Agreement by Seller or by a trustee in
bankruptcy;
(d) Any and all defenses of suretyship; and
(e) Any defense based on the lack of consideration for
this Guaranty.
Nothing herein shall be construed, however, as a waiver by Horizon of
any of the defenses available to the Seller under the Purchase Agreement to the
extent Horizon is lawfully entitled to raise the same as a defense to its
obligations hereunder.
No delay or omission on the part of Regency in the exercise of any
right or remedy hereunder shall operate as a waiver thereof. All remedies of
Regency hereunder shall be in addition to, and exercisable consecutively or
concurrently in any combination with, any and all remedies available to Regency
by operation of law or under the Agreement , and Regency may exercise its
remedies hereunder without the necessity of any notice to Seller or Horizon of
nonpayment, nonobservance, nonperformance or other default by Seller under the
Agreement other than such notice as may be specifically required by the terms of
the Agreement prior to the exercising of such right or remedy.
Notwithstanding any provision of this Guaranty to the contrary, in the
event of the enforcement of this Guaranty by Regency, Regency shall be entitled
to collect from Horizon, Regency's costs of collection, including, without
limitation, reasonable attorneys' fees.
Horizon shall not be subrogated to any of the rights of Regency by
reason of any of the provisions of this Guaranty or by reason of the performance
by Guarantor of any of its obligations hereunder and Horizon shall look solely
to Seller for recoupment of any costs or expenses incurred by Horizon in
performing its obligations hereunder.
For so long as any of the obligations which are the subject of this
Guaranty remain outstanding Horizon shall, upon request, provide Regency with
its quarterly and annual financial statements as soon as the same are available
and with any other financial statements as may be reasonably requested by
Regency.
This Guaranty shall not be assignable by Horizon but shall be binding
upon the successors of Horizon. This Guaranty shall be assignable by Regency in
connection with a permitted assignment of the Agreement and shall inure to the
benefit of its successors and assigns.
If any term, restriction or covenant of this Guaranty is deemed illegal
or unenforceable, all other terms, restrictions and circumstances subject hereto
shall remain unaffected to the extent permitted by law; and if any application
of any term, restriction or covenant to any person or circumstances is deemed
illegal, the application of such term, restriction or covenant to other persons
and circumstances shall remain unaffected to the extent permitted by law.
Seller's Parent:
HORIZON/CMS HEALTHCARE CORPORATION,
a Delaware corporation
By: ______________________________
Xxxx X. Xxxxxxx
President
REGENCY GUARANTY
Regency Health Services, Inc., a Delaware corporation ("Regency") as a
material inducement to Continental Medical Systems, Inc. ("Continental") to
enter into the Regional Office Agreement between Continental and Regency Rehab
Hospitals, Inc. ("Regency") dated November 19, 1996 (the "Agreement"), hereby
unconditionally, irrevocably and jointly and severally with Regency, guarantees
and promises to and for the benefit of Continental that (i) the representations
and warranties of Regency are true and correct as of the date of execution of
the Agreement and shall be true and correct as of the Closing Date (as modified
by any supplements to the Regency Disclosure Letter to reflect events after the
date hereof) and (ii) Regency shall perform all of its obligations, covenants
and agreements, including, but not limited to, its indemnity obligations under
Paragraph 15, to be performed on its part under the Agreement. If Regency
defaults under the Agreement, Continental may proceed immediately against
Regency or Regency or both to enforce any rights it has under the Agreement or
this Guaranty. Notwithstanding the foregoing, the representations and warranties
of Regency will not survive beyond the periods applicable thereto set forth in
Paragraph 16.13 hereof and this Guaranty shall not be construed to give
Continental a claim or cause of action against Regency after the expiration of
the applicable survival period for a breach by Regency of any representation or
warranty.
The liability of Regency hereunder shall not be affected by:
(a) The renewal, extension, modification or termination of the
Agreement by lapse of time or otherwise (all of which are hereby
authorized by Regency) or a release or limitation of the liability of
Regency or its estate in any bankruptcy or insolvency proceeding;
(b) Any extension in the time for making any payment
due under the Agreement or
acceptance of partial payment from Regency;
(c) The acceptance or release by Continental of any
additional security for the
performance of Regency's obligations under the Agreement;
(d) The failure during any period of time whatsoever of
Continental to attempt to collect any amount due under the Agreement or
to exercise any remedy available thereunder or any other security
instrument given as security for performance of the same, in the event
of a default in the performance by Regency in its obligations
thereunder;
(e) Any assignment or successive assignments of
Continental's interest under the
Agreement (whether absolute or as collateral);
(f) The assertion by Continental against Regency of any rights
or remedies reserved or granted to Continental under the Agreement,
including the commencement by Continental of any proceedings against
Regency upon the occurrence of a default thereunder; or
(g) Any dealings, transactions or other matter occurring
between Continental and Regency;
whether or not Regency shall have knowledge or have been notified of or
agreed to any of the foregoing.
Regency hereby expressly waives:
(a) Notice of acceptance of this Guaranty;
(b) Presentment, demand, notice of dishonor, protest and
notice of protest, and all other notices whatsoever, including, without
limitation, notice of any event or matter described in the first
paragraph hereof; provided, however, that nothing herein shall be
construed as a waiver by Regency on its own behalf or on behalf of
Regency with respect to any notice required to be provided by
Continental under the terms of the Agreement;
(c) Any and all claims or defenses based upon lack of
diligence in:
(i) collection of any amount, the payment of which is
guaranteed hereby;
(ii) protection of any collateral or other security for
the obligations which are the
subject of this Guaranty;
(iii) realization upon any other security given for the
obligations which are the subject
of this Guaranty; or
(iv) the discharge, liquidation or reorganization of
Regency in bankruptcy or the
rejection of the Agreement by Regency or by a trustee in
bankruptcy;
(d) Any and all defenses of suretyship; and
(e) Any defense based on the lack of consideration for
this Guaranty.
Nothing herein shall be construed, however, as a waiver by Regency of
any of the defenses available to the Regency under the Agreement to the extent
Regency is lawfully entitled to raise the same as a defense to its obligations
hereunder.
No delay or omission on the part of Continental in the exercise of any
right or remedy hereunder shall operate as a waiver thereof. All remedies of
Continental hereunder shall be in addition to, and exercisable consecutively or
concurrently in any combination with, any and all remedies available to
Continental by operation of law or under the Agreement, and Continental may
exercise its remedies hereunder without the necessity of any notice to Regency
or Regency of nonpayment, nonobservance, nonperformance or other default by
Regency under the Agreement other than such notice as may be specifically
required by the terms of the Agreement prior to the exercising of such right or
remedy.
Notwithstanding any provision of this Guaranty to the contrary, in the
event of the enforcement of this Guaranty by Continental, Continental shall be
entitled to collect from Regency, Continental's costs of collection, including,
without limitation, reasonable attorneys' fees.
Regency shall not be subrogated to any of the rights of Continental by
reason of any of the provisions of this Guaranty or by reason of the performance
by Regency of any of its obligations hereunder and Regency shall look solely to
Regency for recoupment of any costs or expenses incurred by Regency in
performing its obligations hereunder.
For so long as any of the obligations which are the subject of this
Guaranty remain outstanding Regency shall, upon request, provide Continental
with its quarterly and annual financial statements as soon as the same are
available and with any other financial statements as may be reasonably requested
by Continental.
This Guaranty shall not be assignable by Regency or by Continental but
shall be binding upon the successors of Regency and Continental.
If any term, restriction or covenant of this Guaranty is deemed illegal
or unenforceable, all other terms, restrictions and circumstances subject hereto
shall remain unaffected to the extent permitted by law; and if any application
of any term, restriction or covenant to any person or circumstances is deemed
illegal, the application of such term, restriction or covenant to other persons
and circumstances shall remain unaffected to the extent permitted by law.
Regency's Parent:
REGENCY HEALTH SERVICES, INC.
a Delaware corporation
By: ______________________________
Xxxxxxx Xxxxxx
President
