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EXHIBIT 2.6
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") made and entered into
as of this 28th day of February, 1996, by and between SENIOR CARE OF WISCONSIN,
INC., a Wisconsin corporation (hereinafter referred to as "Seller"),
AND
BALANCED CARE CORPORATION, or its assigns, a Delaware corporation
(hereinafter referred to as "Buyer").
W I T N E S S E T H:
WHEREAS, Seller is the owner of certain residential facilities that
are operated under the name "Harmony Manor" and located in Portage,
Pardeeville, Waupun, Mauston, Beloit, Monroe and Tomah, Wisconsin
(collectively, the "Facilities"); and
WHEREAS, Seller desires to sell certain assets used or held for use in
the operation of each of the Facilities to Buyer on the terms and conditions
hereinafter set forth, to which Buyer is agreeable.
NOW, THEREFORE, in consideration thereof and the mutual covenants
hereinafter set forth, and for good, valuable and sufficient consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
each intending to be legally bound hereby, do covenant and agree as follows:
SECTION 1. PURCHASE OF ASSETS.
1.1 Included Assets. Under the terms and conditions set forth in this
Agreement, and based upon the representations and warranties of Seller on the
Closing Date (as defined in Paragraph 3.3), Seller shall sell, assign, convey,
transfer and deliver to Buyer, and Buyer shall purchase from Seller, free and
clear of any and all interests, claims, liens and encumbrances, all of Seller's
right, title and interest in and to the following assets, property, leases,
leasehold improvements, contracts, licenses, permits and other rights of Seller
(collectively, the "Assets"):
(a) All inventories of supplies, drugs, food, beverages,
medical supplies, linens and other similar disposables and consumables
which are owned by Seller and are usable and on hand at each of the
Facilities on the Closing Date (collectively, the "Inventory").
(b) All Facility leases and other leases for real or personal
property, equipment, furnishings, furniture or other improvements
arising in connection with or relating to the operation of each of the
Facilities as listed on Schedule 1.1(b)
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(collectively, the "Leases").
(c) All contracts, agreements, management agreement,
concessions, purchase orders, sales orders, supply contracts, service
agreements or other commitments arising in connection with or relating
to the operation of each of the Facilities as listed on Schedule
1.1(c), including but not limited to contracts arising under or in
connection with the Community Option Program (collectively, the
"Contracts").
(d) All licenses, permits, registrations, approvals,
certificates, consents, accreditations, entitlements, memberships,
franchises and other authorizations arising in connection with or
relating to the operation of each of the Facilities, if any, as listed
on Schedule 1.1(d) (collectively, the "Licenses and Permits").
(e) All resident records, resident agreements, resident care
policies, admission agreements, third-party payor agreements, employee
rosters, employee records, employee files, employment agreements,
confidentiality agreements, medical staff rosters and files, financial
records, advertising materials, proprietary materials, programs,
manuals, handbooks and promotional materials arising in connection
with or relating to the operation of each of the Facilities.
(f) All rights under express or implied warranties,
representations or guarantees vested in or that may be asserted by or
on behalf of Seller with respect to any of the Assets, including but
not limited to any of the foregoing arising under the Community Option
Program.
(g) All claims, rights and choses in action that are being or
may be asserted by or on behalf of Seller with respect to any of the
Assets.
(h) All of Seller's right, title and interest in and to the
trade names "Harmony Manor," "Harmony Manor II" or variations thereof,
and all other trade names used at each of the Facilities, each of
which are set forth on Schedule 1.1(h); provided, however, Seller
shall be permitted to use the name "Harmony" in connection with
Seller's facilities located in Dane County and Manitowac County,
Wisconsin, and at such other locations that are not in conflict with
Seller's covenant-not-to-compete set forth in Paragraph 12.5 of this
Agreement. In addition, Buyer shall be permitted to use the trade
names set forth on Schedule 1.1(h) with respect to any additional
facilities with Seller's prior approval, which approval may be
withheld in Seller's sole and absolute discretion.
(i) All other tangible or intangible property owned by Seller
arising in connection with or relating to the operation of each of the
Facilities as listed in Schedule 1.1(i).
(j) All of Seller rights and interests in and to all
employees employed at any
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of the Facilities who elect, in their sole and absolute discretion,
to be employed by Buyer on and as of the Closing Date.
SECTION 2. ASSUMPTION OF LIABILITIES.
2.1 Assumed Liabilities. Subject to the terms and conditions
set forth in this Agreement, Buyer shall assume and agree to pay,
perform and discharge the following and only the following liabilities
of Seller as the same exist at 12:01 a.m on the Closing Date
(collectively, the "Assumed Liabilities"):
(a) Seller's liability after the Closing Date for the Leases
listed on Schedule 1.1(b).
(b) Seller's liability after the Closing Date for the
Contracts listed on Schedule 1.1(c).
(c) Seller's obligations as of the Closing for inventory and
supplies to be delivered after the Closing in the ordinary course of
business and which inventory and supplies are not included in the
Inventory purchased by Buyer at the Closing.
(d) Seller's obligations under its Benefit Plan as set forth
on Schedule 4.14 as of the Closing and continuing for the 1996
calendar year for continuation of the employee benefits for all
employees retained by Buyer.
Buyer shall not be liable for, and Seller shall indemnify and hold
Buyer harmless from and against, any asserted liability directly relating to a
defect in the assignment of the Assumed Liabilities from Seller to Buyer
resulting from any act or failure to act on the part of Seller, which shall
include penalties, premiums, termination or the like resulting from such
assignment.
2.2 Excluded Liabilities. Except for the Assumed Liabilities, no
obligation or liability of Seller relating to or arising from the operation of
each of the Facilities or the other Assets on or prior to the Closing, of any
nature (whether expressed or implied, fixed or contingent, liquidated or
unliquidated, known or unknown, accrued, due or to become due), is to be
assumed by Buyer, nor shall Buyer be liable to pay, perform or discharge any
such obligation or liability, nor shall the Assets be subject to any such
obligation or liability (all such obligations or liabilities other than the
Assumed Liabilities are referred to as the "Excluded Liabilities"). Subject to
the limitations set forth in Paragraph 4.7, the term "Excluded Liabilities"
includes among others, the following to the extent that such items are in
existence on the Closing Date or arise after the Closing Date based on facts,
circumstances or conditions existing prior to or on the Closing Date and to the
extent they are not Assumed Liabilities:
(a) Long-term indebtedness and other obligations or
guaranties of Seller.
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(b) Federal, state or local tax liabilities or obligations of
Seller in respect to periods prior to the Closing, and the
transactions contemplated hereunder, including, without limitation,
income taxes payable under the Internal Revenue Code 1986, as amended
("IRC"), any income tax, any franchise tax, any tax recapture, any
accrued ad valorem property taxes, any FICA, workers' compensation and
any and all other taxes or amounts due or payable for a period prior
to the Closing. Sales and use taxes, transfer taxes, and all other
impositions of tax arising solely by reason of the transfers
contemplated by this Agreement (excluding all federal, state and local
income and gross receipt taxes on the earnings or gross receipts of
each of the Facilities through the Closing Date, which shall remain
the sole responsibility of Seller) shall be the responsibility of and
shall be borne equally by Seller and Buyer (any real estate and
personal property taxes for the year in which the Closing occurs shall
be pro-rated to the Closing Date, if the tax rates for the year in
which the Closing occurs shall not be fixed prior to the Closing Date
for a particular item of Assets, the pro-ration of taxes thereon shall
be based upon the tax rate for the year prior to the Closing applied
to the latest assessment valuation. However, in the event that any
such taxes are increased for the year in which the Closing occurs,
Seller shall then reimburse Buyer for amounts in excess of the
proration as determined as of the Closing Date).
(c) Liabilities or obligations of Seller for brokerage or
other commissions relating to this Agreement or to the transactions
contemplated hereunder.
(d) Liabilities or obligations arising out of any breach by
Seller of any Contract, Lease or any other agreement whether assumed
by Buyer.
(e) Any liability arising out of or in connection with
claims, acts or omissions arising from or relating to the ownership or
operation of the Assets by Seller prior to Closing; all meters or
other measures of actual use or consumption of any utility services of
any kind, whether public, quasi-public or private, at or for each of
the Facilities shall be read during the daylight hours on the day
immediately preceding the Closing Date, with all charges, costs and
expenses of such utility services so determined by such readings to be
paid by Seller.
(f) Any debt, obligation, expense or liability of Seller
arising out of or incurred in respect of any transaction of Seller
occurring after the Closing or for any violation by Seller of any
federal, state or local law, statute, rule, regulation, ordinance,
order, judgment or decree.
(g) Any liability or obligation (contingent or otherwise) of
Seller arising out of any threatened or pending litigation or claim
(known or unknown).
(h) Any obligation or liability of Seller relating to any
Hazardous Substances (as hereinafter defined in Section 6.2),
including clean-up or other remedial action related thereto, that
arises out of or results from any act, omission or occurrence or
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state of facts existing prior to Closing.
(i) Any other liabilities or obligations of Seller
(contingent or otherwise) existing on the Closing Date or based on
facts existing on or prior thereto and not expressly assumed by Buyer
under this Agreement, including but not limited to any workers'
compensation claims, insurance claims and all management fees and
related expenses incurred by Seller in the operation of each of the
Facilities.
2.3 Adjustments to be Made at Closing. Operation of the Facilities
until 12:01 a.m. on the Closing Date shall be for the account of Seller, and
thereafter for the account of Buyer. The items of accrued liabilities and
prepaid expenses set forth on Schedule 2.3 shall be prorated and/or adjusted
between Buyer and Seller on and as of the Closing Date, and shall include, but
not be limited to, employee wages, the credit for employee benefits (as more
specifically set forth below), accounts receivable, advance resident fees and
security deposits (together with any interest, late charges, penalties,
collection fees and other sums that are or may become due and payable with
respect thereto). Either party collecting any item that exceeds its proration
of such item after the Closing Date shall remit the same to the other party
within ten (10) days of the collection thereof. A credit for employee benefits
shall be made in Buyer's favor in the amount set forth on Schedule 2.3 in
consideration for Buyer's obligation to continue Seller's Benefit Plan as set
forth on Schedule 4.14 for the calendar year of 1996 for all employees retained
by Buyer.
2.4 No Expansion of Third Party Rights. The assumption by Buyer of the
Assumed Liabilities and the transfer thereof by Seller shall not expand the
rights or remedies of any person or entity against Buyer or Seller as compared
to the rights and remedies that such person or entity would have had against
Seller had Buyer not assumed the Assumed Liabilities. Without limiting the
generality of the foregoing, the assumption by Buyer of the Assumed Liabilities
shall not create any third party beneficiary rights.
SECTION 3. PURCHASE PRICE, PAYMENT OF PURCHASE PRICE AND CLOSING.
3.1 Purchase Price.
(a) The purchase price payable to Seller for the Assets (the
"Price") is and shall be a total of One Million Eight Hundred
Thousand Dollars ($1,800,000.00), subject to the adjustments, if any,
to be made pursuant to Paragraph 3.1(b). The Price shall be allocated
in the manner set out in Schedule 3.1, and the parties agree to
report the transaction for federal tax purposes in accordance with
such allocation. In consideration of an amount equal to Ten Thousand
Dollars ($10,000.00), which amount is included in the Price and
hereby acknowledged to be adequate and sufficient, Seller covenants
not to compete with Buyer and not to solicit the contractors or
employees of any of the Facilities, as more particularly set forth in
Section 12.5 of this Agreement.
(b) The prorations made in connection with Schedule 2.3 shall
be subtracted
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from, or added to, the Price at Closing, as the case may be.
3.2. Payment of Purchase Price. The Price shall be paid to Seller as
follows:
(a) Pursuant to that certain Letter of Intent executed and
delivered by and between Buyer and Seller on January 19, 1996 (the
"Letter of Intent"), Buyer has heretofore delivered to Xxxxx Xxxx of
Marcus & Millichap, as escrow agent for the parties (the "Escrow
Agent"), an option payment in the sum of Five Thousand Dollars
($5,000.00) (the "Option Payment"), the receipt and sufficiency of
which are hereby acknowledged by Seller, which Option Payment shall be
held in escrow in accordance with the terms and conditions of the
Escrow Agreement attached hereto as Exhibit "A" and by this reference
incorporated herein (the "Escrow Agreement").
(b) Upon execution and delivery of this Agreement by the
parties hereto, Buyer shall deliver to Escrow Agent a good faith
deposit in the sum of Forty Five Thousand Dollars ($45,000.00) (the
"Initial Deposit"), to be held in escrow in accordance with the terms
and conditions of the Escrow Agreement.
(c) Provided the Closing has not previously occurred and
neither party has terminated this Agreement in accordance with its
terms, on March 19, 1996, Buyer shall deliver to Escrow Agent a good
faith deposit in the sum of Fifty Thousand Dollars ($50,000.00) (the
"Final Deposit"), to be held in escrow in accordance with the terms
and conditions of the Escrow Agreement.
Hereinafter, the Option Payment, the Initial Deposit and the Final
Deposit may be collectively referred to as the "Deposits." At the
Closing, the Deposits previously made by Buyer shall be paid to Seller
and all interest, if any, earned thereon shall be returned to Buyer.
If the Closing does not occur, the Deposits previously made by Buyer
shall be distributed in accordance with the terms and conditions of
the Escrow Agreement and this Agreement
(d) The balance of the Price shall be paid to Seller at the
Closing in accordance with Section 3.4 (m) below.
3.3. Closing Date and the Closing. The closing for the sale and
purchase of the Assets hereunder (the "Closing") shall be conducted at the
offices of Seller in Madison, Wisconsin or at such other location as may be
mutually agreed upon by the parties hereto on the first to occur of (i) a date
mutually agreed upon by the parties or (ii) the date that is ten (10) days
after all of the conditions precedent set forth in this Agreement have been met
and satisfied; however, in no event later than April 18, 1996 (the "Closing
Date"), which date may be extended by the mutual agreement of the parties. TIME
IS AND SHALL BE OF THE ESSENCE WITH RESPECT TO THE CLOSING.
3.4 Closing Documents. At and as of the Closing, Seller and Buyer
shall execute and deliver all such bills of sale, consents, endorsements,
assignments and other instruments of
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assignment, transfer and conveyance as shall be necessary to transfer, assign
and convey to Buyer all of the Assets to be transferred, assigned and conveyed
under this Agreement, and for Buyer to assume the Assumed Liabilities
hereunder, together with all consents and certificates required hereunder and
all documents otherwise required under this Agreement, including, but not
limited to, the following (collectively, the "Closing Documents"):
(a) A xxxx of sale in form and substance satisfactory to
Buyer transferring to Buyer all of Seller's right, title and interest
in and to the Assets, as applicable, and covenanting and warranting
that Seller has good and marketable title to the items thereby
transferred, free and clear of all liens, mortgages, charges, security
interests and other encumbrances and against the acts of Seller.
(b) An assignment in form and substance satisfactory to Buyer
transferring to Buyer all of Seller's right, title and interest in and
to the Assets, as applicable, including but not limited to (i) the
Contracts, Leases, Permits and Licenses and (ii) all warranties,
representations and guarantees by third persons with respect to any of
the Assets.
(c) A certificate in form and substance satisfactory to Buyer
from Seller certifying that all representations and warranties made by
Seller in this Agreement and any of the Closing Documents are and
continue to be true and correct in all respects on and as of the
Closing Date and each and every covenant and agreement of Seller to be
performed prior to or as of the Closing Date pursuant to this
Agreement or any of the Closing Documents have been performed in all
respects.
(d) Copies of Seller articles of incorporation and bylaws,
certified by Seller's corporate secretary.
(e) A certificate in form and substance satisfactory to Buyer
from Seller's corporate secretary certifying as to duly adopted
resolutions of Seller's board of directors and shareholders (if
necessary), authorizing the execution and delivery of this Agreement
and the Closing Documents, the transactions contemplated herein and
therein, and the performance by Seller of its obligations hereunder
and thereunder, together with a certificate of incumbency of the
officers of Seller authorized to execute this Agreement and all
documents related hereto.
(f) A certificate of status regarding Seller from the
Secretary of State of Wisconsin dated no more than thirty (30) days
prior to Closing.
(g) Copies of lien searches with respect to Seller and the
Assets conducted in the appropriate counties of Wisconsin and at the
Office of the Secretary of State of Wisconsin.
(h) An opinion of Seller's counsel ("Seller's Counsel"),
dated as of the Closing Date, and addressed to Buyer to the effect
that (i) Seller is a corporation duly
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organized, validly existing and in good standing under the laws of
the State of Wisconsin and is qualified to do business therein; (ii)
the execution and delivery of this Agreement and the Closing
Documents by Seller, the performance by Seller of its obligations
hereunder and thereunder and the sale and purchase of the Assets have
been duly authorized by all necessary corporate action on the part of
Seller (including any necessary approval by Seller's shareholders);
(iii) this Agreement and the Closing Documents executed by Seller are
valid and binding obligations of Seller enforceable against Seller in
accordance with their respective terms, subject to the effect of
bankruptcy, insolvency, reorganization, moratorium and other laws
applicable to creditors' rights and debtors' obligations generally;
(iv) the execution and delivery of this Agreement and the Closing
Documents, and the consummation of the transactions hereunder and
thereunder by Seller, do not and will not constitute an event of
default under, or a violation of, (A) Seller's articles of
incorporation and bylaws, (B) to the best of Seller's Counsel's
knowledge, any law, statute, rule or regulation of any court or
governmental authority now in effect applicable to Seller or the
Assets, or (C) to the best of Seller's Counsel's knowledge, any
instrument, contract or other agreement to which Seller is a party or
by which Seller is bound; (v) there is no pending or, to the best of
Seller's Counsel's knowledge, threatened, litigation or other
proceeding or governmental investigation against or relating to
Seller or to the Assets or to the transactions contemplated by this
Agreement and the Closing Documents; (vi) Seller has given all
required notices (if any) to the Wisconsin Department of Health and
Social Services, the appropriate human service agencies, the
Facilities' residents and all other governmental authorities or other
third parties that are necessary to permit the sale, transfer and
conveyance of the Assets in accordance with the terms and conditions
of this Agreement and all Department of Health and Social Services'
laws, regulations and orders, all of which are in full force and
effect and (viii) other than the notices referred to in Subparagraph
(vi), no consents, authorizations, approvals or authorizations of, or
registrations with, any governmental authorities or other third
parties are necessary to permit the sale, transfer and conveyance of
the Assets in accordance with the provisions of this Agreement or any
applicable laws, statutes and regulations, all of which are in full
force and effect. In connection with the foregoing opinion, Seller's
Counsel shall be entitled to rely upon the genuineness of signatures
(other than Seller's), the authenticity of original documents and the
conformity to authentic originals of documents submitted as copies.
As to factual matters, Seller's Counsel shall be entitled to rely on
Seller's certification as to the truthfulness of statements of fact.
(i) A "FIRPTA" certificate in form and substance satisfactory
to Buyer and in conformance with Section 1445(b)(2) of the IRC, to the
effect that neither Seller nor any third-party seller/transferor is a
foreign person.
(j) Seller's financial statements as required by Section 4.9.
(k) All other instruments, certificates, documents and
information to which Buyer may be entitled under any other provisions
of this Agreement or that Buyer may
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reasonably request in order to complete the Closing.
(l) An opinion of Buyer's counsel ("Buyer's Counsel"), dated
as of the Closing Date, and addressed to Seller to the effect that (i)
Buyer is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and is (or on the
Closing Date will be) qualified to do business in the State of
Wisconsin; (ii) the execution and delivery of this Agreement and the
Closing Documents by Buyer, the performance by Buyer of its
obligations hereunder and thereunder and the sale and purchase of the
Assets have been duly authorized by all necessary corporate action on
the part of Buyer (including any necessary approval by Seller's
shareholders); (iii) this Agreement and the Closing Documents executed
by Buyer are valid and binding obligations of Buyer enforceable
against Buyer in accordance with their respective terms, subject to
the effect of bankruptcy, insolvency, reorganization, moratorium and
other laws applicable to creditors' rights and debtors' obligations
generally and (iv) the execution and delivery of this Agreement and
the Closing Documents, and the consummation of the transactions
hereunder and thereunder by Buyer, do not and will not constitute an
event of default under, or a violation of, (A) Buyer's articles of
incorporation and bylaws, (B) to the best of Buyer's Counsel's
knowledge, any law, statute, rule or regulation of any court or
governmental authority now in effect applicable to Buyer or the Assets
or (C) to the best of Buyer's Counsel's knowledge, any instrument,
contract or other agreement to which Buyer is a party or by which
Buyer is bound. In connection with the foregoing opinion, Buyer's
Counsel shall be entitled to rely upon the genuineness of signatures
(other than Buyer's), the authenticity of original documents and the
conformity to authentic originals of documents submitted as copies. As
to factual matters, Buyer's Counsel shall be entitled to rely on
Buyer's certification as to the truthfulness of statements of fact.
(m) Buyer shall tender to Seller the Price (subject to any
adjustments pursuant to Paragraph 3.1(b)), less the Deposits
previously made by Buyer, by wire transfer, bank cashier's check or
certified check, as may be satisfactory to Seller, and said Deposits
shall be paid to Seller with any accrued interest to be returned to
Buyer.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF SELLER.
Seller hereby represents, warrants and covenants to and in favor of
Buyer, Buyer's designee(s), nominee(s), and assigns(s) that:
4.1 Organization, Power and Ownership. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Wisconsin, is qualified to do business in the State of Wisconsin and has the
full power, authority and legal right to lease, own and operate the Assets
leased or owned by it and to execute and deliver and to perform the provisions
of this Agreement and the Closing Documents to which it is a party. Seller's
shareholders are the only shareholders of Seller, collectively owning all of
the issued and outstanding capital shares of Seller, and no other party has any
right to vote or acquire any
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shares of Seller.
4.2 Authorization. The execution and delivery of this Agreement and
the Closing Documents by Seller, the performance by Seller of its obligations
under this Agreement and the Closing Documents and the sale and purchase of the
Assets have been duly authorized by all necessary corporate action on the part
of Seller (including any necessary approval by Seller's shareholders). This
Agreement has been, and on the Closing Date the Closing Documents executed by
Seller hereunder will have been, duly executed and delivered by Seller, and
constitute and will constitute the valid and binding obligations of Seller
enforceable against Seller in accordance with their respective terms.
4.3 Solvency. Seller is solvent and is not in default in the payment
of liability or obligation, or subject to any judgment, order, decree, rule or
regulation of any governmental authority that would, in each case or in the
aggregate, adversely affect any of the Assets or the transactions contemplated
under this Agreement. As used herein, "solvent" means that on a given date (i)
the fair market value of the Assets of Seller is greater than the total amount
of liabilities, including contingent liabilities of Seller, (ii) the present
fair salable value of the Assets of Seller is not less than the amount that
will be required to pay the probable liability of Seller on its debts as they
become absolute and matured, (iii) Seller does not intend to, and does not
believe that it will, incur debts or liabilities beyond Seller's ability to pay
as such debts and liabilities mature, (iv) Seller is not engaged in business or
a transaction, and is not about to engage in business or a transaction, for
which Seller's Assets would constitute an unreasonably small capital and (v)
Seller has sufficient cash flow to enable it to pay its debts as they mature.
4.4 Consents. Other than the notices referred to in Paragraph 4.11, no
other consents, authorizations, approvals or authorizations of, or
registrations with, any governmental authorities or other third parties are
necessary to permit the sale, transfer and conveyance of the Assets in
accordance with the provisions of this Agreement or any applicable laws,
statutes and regulations, all of which are in full force and effect.
4.5 Litigation. There are no actions, proceedings or investigations,
pending or threatened, against or affecting Seller or the Assets, seeking to
enjoin, challenge or collect damages in connection with the transactions
contemplated under this Agreement or which could reasonably be expected to
materially affect the financial condition or operations of Seller with respect
to each of the Facilities or the Assets or the ability of Seller to carry out
the transactions contemplated hereunder.
4.6 No Violation. Except as set forth on Schedule 4.6 attached hereto,
the execution and delivery of this Agreement and the Closing Documents by
Seller, compliance with the provisions hereof and thereof and the consummation
of the transactions contemplated herein and therein will not result in (i) the
acceleration of any obligation of Seller with respect to any of the Assets,
(ii) the creation of any lien upon any of the Assets (other than pursuant to
this Agreement) or (iii) the breach or violation of (A) any law, statute, rule
or regulation of any court or governmental authority now in effect and
applicable to Seller or the Assets, (B)
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the articles of incorporation or bylaws of Seller, (C) any judgment, order or
decree of any court or governmental authority binding on Seller, (D) any
Contract, instrument or other agreement to which Seller is a party or by which
Seller is bound or (E) any License or Permit applicable to Seller or the
Assets.
4.7 The Facilities.
(a) Schedule 4.7 accurately describes all inspections by
licensure and health officials, fire authorities and insurance
inspectors of each of the Facilities in possession of Seller at the
time of Closing that have been conducted by or on behalf of Seller by
any governmental agency or any consultant since the last such
inspection completed by or on behalf of Seller, and includes all
matters that were noted by such governmental agency or consultant
requiring correction or requested or recommended modifications, and
the present status of each such noted matter.
(b) All Permits and Licenses required by applicable law
relating to the operation of each of the Facilities are held by or on
behalf of Seller and are valid and effective.
(c) All public utilities, including telephone, gas, electric
power, sanitary and storm sewer and water are available to Seller as
tenant under the Leases for each of the Facilities and, to the best of
Seller's knowledge, such utilities are and have been adequate for
Seller's operation of each of the Facilities.
(d) (i) Seller has not installed or caused to be installed
any underground tanks or allowed the presence or disposal of, or
caused to be allowed the presence or disposal of, any Hazardous
Substances (as hereinafter defined in Section 6.2) in, on, under,
from, over or related to any of the Facilities in violation of any
Environmental Laws; (ii) no enforcement, cleanup, removal or other
governmental or regulatory actions have been instituted against Seller
or, to the best of Seller's knowledge, threatened against Seller or
any of the Facilities; (iii) there is no current or, to the best of
Seller's knowledge, prior violation or state of noncompliance with the
Environmental Laws (as hereinafter defined in Section 6.2) by Seller
with respect to any of the Facilities; (iv) no claims have been made
against Seller, or to the best of Seller's knowledge, threatened
against Seller by any third party with respect to any of the
Facilities relating to damage, contribution, cost recovery,
compensation, loss or injury resulting from or related to any
Hazardous Substance and (v) to the best of Seller's knowledge, there
are no current, and have been no, businesses engaged in the storage,
treatment or disposal of Hazardous Substances on any property adjacent
to any of the Facilities.
(e) To the best of Seller's knowledge, there are no eminent
domain or condemnation proceedings pending or threatened against or
affecting any of the Facilities.
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Prior to the Closing Date unless otherwise specified, Buyer shall have made an
on-site physical and environmental investigation of each of the Facilities.
Buyer expressly acknowledges that Buyer has not relied on any warranties,
promises, understandings, or representations, express or implied, of Seller or
any agent of Seller relating to any of the Facilities which are not contained
in this Agreement, and that BUYER IS TAKING POSSESSION OF THE FACILITIES IN
THEIR PRESENT CONDITION AND STATE OF REPAIR, "As Is." Except as expressly set
forth in this Agreement, Buyer acknowledges that any and all engineering data
or other information regarding the physical and environmental condition of the
Facilities which Buyer has received or may receive from Seller or Seller's
agents is furnished without any warranty whatsoever. By closing the
transactions contemplated herein, Buyer will be deemed to have waived any and
all objections, claims or causes of action against Seller with respect to the
physical and environmental condition of the Facilities that are not based on,
or that do not arise out of, the warranties, promises, understandings or
representations of Seller specifically contained Paragraph 4.7 and Paragraph
4.11, including without limitation, any objections, claims or causes of action
pursuant to Paragraphs 2.2, 4.11, 12.1 of this Agreement.
4.8 Personal Property. Seller has good title to all of the Assets
consisting of personality to be conveyed to Buyer hereunder, free and clear of
all liens, claims, security interests and encumbrances whatsoever and, except
for the personalty set forth on Schedule 4.8:
(a) The Assets consisting of the personalty, together with
the property subject to the Leases, in the aggregate constitutes all
of the tangible personal property used in or related to the operation
of each of the Facilities as now operated by Seller.
(b) The Assets (including the Assets held under Leases which
are to be transferred to Buyer hereunder) constitute all of the
rights, properties and assets that Seller uses or holds to operate
each of the Facilities.
4.9. Financial Statements. Seller has provided Buyer with final,
audited income statements, detailed for each of the Facilities, for the fiscal
years ending December 31 for 1993 and 1994, together with a tentative year-end
income statement for 1995 (which statement indicates that the net operating
income of Seller, defined as net revenues less employee wages and benefits,
occupancy costs [including lease expense] and other operating expenses
[excluding depreciation and interest], but not including corporate
administrative expenses is at least Six Hundred Fifteen Thousand Dollars
($615,000.00)); and, in addition to the foregoing, Seller shall deliver to
Buyer a final financial statement for 1995, audited by a certified public
accountant acceptable to Buyer, as soon as the same become available to Seller
(collectively, the "Financial Statements"). The Financial Statements are, or
upon completion will be, (i) true, correct and complete in all material
respects, (ii) prepared in accordance with generally accepted accounting
principles and the books and records for each of the Facilities and (iii)
fairly and accurately present the financial condition of Seller and its
operation of each of the Facilities for the dates and periods covered thereby.
Since December 31, 1995:
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(a) There has not been any material adverse change from that
disclosed in the final, audited Financial Statements in the financial
condition of Seller with respect to any of the Facilities, the Assets
or the Assumed Liabilities, either individually or in the aggregate.
(b) Through the date of this Agreement, Seller has not
suffered any casualty loss (whether or not such loss or damage shall
have been covered by insurance) that affects the ability of Seller to
operate any of the Facilities.
(c) Seller has not incurred any liability or obligation of
any nature (whether absolute, accrued, contingent or otherwise) which
may become an Assumed Liability hereunder except in the ordinary and
regular course of Seller's operation of each of the Facilities.
(d) Seller has not made any capital expenditure or commitment
for additions to property, plant or equipment in excess of Five
Thousand Dollars ($5,000.00) for any of the Facilities.
(e) Seller has not paid any amount to any federal, state or
local government or authority or any other third party for any claim,
obligation, liability, loss, damage or expense, of whatever kind or
nature, incurred or imposed under any Environmental Law in connection
with any of the Facilities.
(f) There has not been any increase in the compensation or
benefits to any employee at any of the Facilities (except in the
ordinary course consistent with past practices).
(g) There has not been any transaction by Seller relating to
any of the Facilities or their operation outside the ordinary course
of business which materially and adversely affects the Assets or any
Assumed Liability, either individually or in the aggregate.
4.10 Insurance. A complete and accurate list of all insurance policies
(including a statement of policy limits and deductibles) held by Seller
relating to each of the Facilities now in force and effect, including, without
limitation, professional liability, public liability, property damage, business
interruption, product liability and workers' compensation or other coverage, is
contained on Schedule 4.10. There are no outstanding requirements or
recommendations that have been directed to Seller by any insurance company that
issued any such policy or by any Board of Fire Underwriters, governmental
authority or other similar body exercising similar functions that require or
recommend any changes in the operation of any of the Facilities, or any repairs
or other work to be done on or with respect to any of the Assets. Schedule 4.10
contains a letter from Seller's insurer certifying that Seller has maintained
continuous insurance coverage in appropriate amounts with respect to each of
the Facilities for the past three (3) years. There are no workers' compensation
claims (actual, threatened or pending) not covered by insurance.
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4.11 Compliance with Laws and Licenses. Seller has operated each of
the Facilities in accordance with all Department of Health and Social Services'
laws, regulations and orders except for minor deficiencies that have been
corrected or that have been noted on Schedule 4.11. Any deficiencies identified
by the Department of Health and Social Services licensure inspections that have
not been corrected by Closing and are a result of Seller's operation of the
Facilities shall be corrected at Seller's cost and expense or identified on
Schedule 2.3 as an accrued liability and deducted from the Price pursuant to
Paragraph 3.1(b). Seller holds all the Licenses and Permits required to be held
by it to operate each of the Facilities in compliance with all Department of
Health and Social Services' laws, regulations and orders. Schedule 1.1(d)
describes each License and Permit and a true and correct copy of each has
previously been delivered to Buyer by Seller. No notice from any authority in
respect to the revocation, termination, suspension or limitation of any License
or Permit has been issued or given to Seller, nor is Seller aware of the
proposed or threatened issuance of any such notice. Seller has or will give all
notices to the Wisconsin Department of Health and Social Services, the
appropriate human service agencies, the Facilities' residents and all other
governmental authorities or other third parties that are necessary to permit
the sale, transfer and conveyance of the Assets in accordance with the terms
and conditions of this Agreement and all Department of Health and Social
Services' laws, regulations and orders, all of which are or shall be in full
force and effect. Seller has previously delivered to Buyer true and complete
copies, if any, of each of the Facilities' most recent (i) survey report and
deficiency list, (ii) state licensing report and deficiency list and (iii)
life-safety inspection report and deficiency list. The Facilities are, and at
the Closing Date will be, licensed by the Wisconsin Department of Health and
Social Services for an aggregate of 158 community-based residential facility
beds.
4.12 Inventories. All items of Inventory of Seller to be on hand on
the Closing Date and included in the Price, consist and will consist, of items
of a quality usable or salable in the ordinary course of Seller's operation of
each of the Facilities. The quantities of all Inventory are reasonable and
justified under the normal operations of each of the Facilities.
4.13 Leases. Except as set forth on Schedule 1.1(b), neither Seller
nor any of the Facilities is a party to or subject to any other Lease relating
to the operation of each of the Facilities. Each Lease described on Schedule
1.1(b) is valid and in full force and effect. Except as set forth on Schedule
1.1(b), all of the Leases may be terminated by Seller or assigned to Buyer
without the consent of any other party thereto.
4.14 Employee Benefit Plans. Seller maintains only the benefit plan
(the "Benefit Plan") as set forth on Schedule 4.14. Except to the extent set
forth on Schedule 4.14, Seller does not maintain any of the following:
(a) Executive and Employee Arrangements. Any bonus, incentive
compensation, stock option, deferred compensation, commission,
severance, golden parachute or other executive compensation plan,
rabbi trust program, contract, arrangement or practice;
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(b) ERISA Plans. Any "employee benefit plan" (as defined in
Section 3(1) of ERISA, including, but not limited to, any
multi-employer plan (as defined in Section 3(37) and Section
4001(a)(3) of ERISA), defined benefit pension plan, profit sharing
plan, money purchase pension plan, savings or thrift plan, stock
bonus plan, employee stock ownership plan or any plan, fund, program,
arrangement of practice providing for medical (including
post-retirement medical), hospitalization, accident, sickness,
disability or life insurance benefits; and
(c) Other Employee Fringe Benefits. Any stock purchase,
scholarship, day care, prepaid legal services and severance pay.
4.15 Contracts. Except as set forth on Schedule 1.1(c), neither Seller
nor any of the Facilities is a party to or subject to any Contract relating to
the operation of each of the Facilities. Each Contract described on Schedule
1.1(c) is valid and in full force and effect and there are no existing defaults
by Seller thereunder. No event has occurred that (whether with notice, lapse of
time, or both) would constitute an existing default by Seller under any of the
Contracts. Except as set forth on Schedule 1.1(c), all of the Contracts may be
assigned to Buyer without the consent of any other party thereto.
4.16 Broker's and Finder's Fees. Neither Seller, nor anyone acting on
behalf of Seller, has dealt with any finder, real estate broker or other person
who is entitled to claim a fee or commission based upon the actions of Buyer,
except for Marcus and Millichap ("Broker"), and Seller shall pay Broker's fee
or commission and any other costs in connection therewith. If any other person
shall assert a claim to a finder's fee or broker's fee or commission or other
costs on account of any alleged employment as a finder or broker in connection
with the sale and purchase of the Assets, Seller shall defend, indemnify and
save the Buyer harmless from any such claim or proceeding thereon, and all
costs, expenses, and liabilities arising in connection therewith, including but
not limited to attorneys' fees and costs. The indemnity obligations of this
Paragraph shall survive termination or expiration of this Agreement and
Closing.
4.17 Tax Returns. Seller has filed all federal, state, local and other
tax returns, reports and statements required by whatsoever jurisdiction and for
whatsoever reason required to be filed on or before the Closing Date, and has
properly paid all taxes, assessments, fees, charges and other sums so reported
or otherwise due to any government or jurisdiction, or installments or
estimated payments thereof that are required to be paid on or before the
Closing Date, including but not limited to income taxes, capital stock taxes,
personal property taxes, unemployment compensation taxes, charges or
contributions, social security ("FICA") contributions, withholding and
employment taxes or similar amounts, sales and use taxes, real estate taxes,
workmen's compensation premiums or assessments and any and all interests,
additions and penalties thereon; none of Seller's federal or state income tax
returns, Wisconsin state sales/use tax returns or any other tax or similar
returns, reports or statements required by whatsoever jurisdiction have been
audited or are currently under audit by the Internal Revenue Service, the
Wisconsin Department of Revenue or any other governmental authority,
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jurisdiction, agency, department or instrumentality; no action has been taken,
no matter exists and no transaction has been completed or is pending that will
or may result in a deficiency for additional taxes, interest, additions or
penalties levied or imposed for any period prior to or ending as of the date of
this Agreement; there are no outstanding agreements or consents extending the
statutory period of limitations applicable to any federal, state or local tax
return, report or statement or the taxes reported thereon for any period ending
on or before the date of this Agreement and there are no tax petitions, tax
settlements, tax assessments or other tax claims or charges that have been, or
to the best of Seller's knowledge and information, may be or might be assessed
against Seller.
4.18 Survival of Representations and Warranties. The representations
and warranties of Seller set forth in this Section 4 shall survive the Closing.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF BUYER.
Buyer hereby represents and warrants to Seller as follows:
5.1 Corporate Organization; Good Standing. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, is duly qualified and authorized to do business in the Commonwealth
of Pennsylvania and has full power, authority and legal right to execute and
deliver and to perform and observe the provisions of this Agreement and the
Closing Documents to which it is a party and otherwise to carry out the
transactions contemplated hereunder and thereunder.
5.2 Authorization. The execution and delivery of this Agreement and
the Closing Documents by Buyer, the performance by Buyer of its obligations
hereunder and thereunder and the sale and purchase of the Assets have been duly
authorized by all necessary corporate action on the part of Buyer. This
Agreement has been, and on the Closing Date the Closing Documents executed by
Buyer hereunder will have been, duly executed and delivered by Buyer, and
constitute and will constitute the valid and binding obligations of Buyer
enforceable against Buyer in accordance with their respective terms.
5.3 No Violation. The execution and delivery of this Agreement and the
Closing Documents by Buyer, compliance with the provisions hereof and thereof
and the consummation of the transactions contemplated herein and therein will
not result in (i) the breach or violation of (A) any law, statute, rule or
regulation of any court or governmental authority now in effect applicable to
Buyer; (B) the articles of incorporation and bylaws of Buyer; (C) any judgment,
order or decree of any court or governmental authority binding on Buyer or (D)
any instrument, contract or other agreement to which Buyer is a party or by
which Buyer is bound.
5.4 Broker's and Finder's Fees. Neither Buyer, nor anyone acting on
behalf of Buyer, has done anything to cause or incur any liability for any
broker's or finder's fees or the like in connection with this Agreement or any
transaction contemplated hereby.
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5.6 Survival of Representations and Warranties. The representations
and warranties of Buyer set forth in this Section 5 shall survive the Closing.
SECTION 6. ENVIRONMENTAL INSPECTION.
6.1 Inspections. At any time on or before March 19, 1996, Buyer or
Buyer's agent may make one (1) or more inspections and tests of each of the
Facilities for the presence of or contamination by Hazardous Substances (as
that term is defined below). Buyer shall have the absolute right to choose and
determine who shall perform such inspections and tests and when they shall be
performed. Buyer shall be responsible for any cost or expense with regards to
any inspections and tests ordered by Buyer. If the result or results of Buyer's
inspections and/or tests show the presence of, or contamination by, Hazardous
Substances, or the need for any type of remediation at any of the Facilities,
Buyer may terminate this Agreement without any liability to Seller whatsoever
and receive a return of the Deposits previously made by Buyer in accordance
with the terms and conditions of the Escrow Agreement and this Agreement.
6.2 Definitions. Where used in this Agreement, the term "Hazardous
Substances" shall mean and include: (a) all hazardous or toxic substances,
wastes or materials, including but not limited to those as now or hereafter
defined by or designated in or pursuant to Environmental Laws (as hereinafter
defined), and further including without limitation petroleum and products and
derivatives thereof and other pollutants or contaminants, whether or not
naturally occurring, including but not limited to asbestos or asbestos
containing materials; (b) any activity now or hereafter undertaken, whether on,
at or off the premises of any of the Facilities, that would (i) cause any of
the Facilities to become a hazardous waste treatment, storage or disposal
facility under, or otherwise subject any of the Facilities to the provisions
of, the Resource Conservation and Recovery Act of 1976, as amended, 42 U.S.C.
Section 6901 et seq., (ii) cause a release or disposal of Hazardous Substances
on the premises of any of the Facilities under, or otherwise subject any of the
Facilities to, the provisions of the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section 9601 et
seq. or any similar state or local law or ordinance, (iii) cause the discharge
of pollutants, contaminants or effluents into any water source or system,
whether surface or subsurface, or of any emissions into the air, which would
require a permit under the Federal Water Pollution Control Act, 33 U.S.C.
Section 1251 et seq., or the Clean Air Act, 42 U.S.C. Section 7401 et seq. or
any similar state or local law or ordinance or (iv) cause any substances or
conditions in, on or under the premises of any of the Facilities which may
support a claim, charge or cause of action under any of the abovementioned laws
or any other federal, state or local environmental laws, ordinances, rules,
regulations, administrative or judicial orders, or any other environmental
requirements (collectively, the "Environmental Laws"), including without
limitation the presence of any underground storage tanks or underground
deposits located on the premises of any of the Facilities, or the presence of
asbestos or asbestos containing materials in any of the Facilities.
SECTION 7. COVENANTS AND AGREEMENTS.
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7.1 Pre-Closing Activities. With respect to each of the Facilities,
Seller shall, from the date of this Agreement to the Closing Date, except as
otherwise specifically agreed to in writing by Buyer:
(a) Make no borrowing or hypothecations that would encumber any of the
Assets as of the date of or after the Closing or incur or agree to incur any
liability or obligation of any material nature (absolute or contemplated) which
may become an Assumed Liability hereunder except in the ordinary course of
business;
(b) Not modify, amend or cancel any of the Contracts, Leases, Permits
or Licenses, or enter into any new contracts or leases with respect to any of
the Assets with any third party, except on account of a default by any party
(other than Seller) to the same or the normal expiration of the stated term
thereof;
(c) Not authorize or make any non-emergency capital expenditure that
would affect the Assets;
(d) Not increase the salary of any employee except in the ordinary
course of business, or pay or agree to pay any bonus to any employee or adopt
any other Benefit Plan, except in the ordinary course of business (and except
where required by law);
(e) Not sell, assign, lease or otherwise transfer or dispose of, or
enter into any agreement to sell, assign, lease or transfer, any of the Assets,
except in the ordinary course of business;
(f) Not merge or consolidate or agree to merge or consolidate with or
into any other entity;
(g) Make such repairs, restorations and replacements as may be
necessary or appropriate to keep and maintain the Assets in their present
physical condition and state of repair and operation as they exist and are
operated as of the date hereof, reasonable wear and tear excepted;
(h) Keep and maintain any and all insurance for the Assets in full
force and effect;
(i) Not enter into any agreements or other arrangements that will or
may incur obligations binding upon or against the Assets or Buyer subsequent to
the Closing Date;
(j) Comply with and cure all violations of laws, ordinances, rules,
regulations, orders, decrees or requirements, whether public or private,
affecting the Assets of which Seller has knowledge;
(k) Timely pay, satisfy and discharge any amount of principal,
interest, premium or penalty due or becoming due under any obligation with
respect to the Assets and all other bills, charges and sums due or becoming due
prior to the Closing Date with respect thereto or
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otherwise, including but not limited to the discharge of any liens,
encumbrances, judgments, taxes, charges, assessments, security interests or
chattel mortgages or any other claims now or hereafter imposed against the
Assets;
(l) Fully perform and observe all requirements, obligations and
provisions of the Contracts, Leases, Permits and Licenses and any other
agreements and arrangements for or relating to the Assets or operation,
occupancy or maintenance thereof and promptly cure any violation, default or
breach by Seller thereunder;
(m) Not undertake any courses of conduct or action, or fail to do so,
inconsistent with the requirements of this Agreement and Seller's obligations,
covenants, representations and warranties herein provided, or that may prevent
or hinder Buyer from satisfying its conditions precedent hereof, consummating
the purchase of the Assets hereunder or fully realizing the acquisition of the
Assets as hereby intended;
(n) Use Seller's best efforts to maintain present employees and
maintain Seller's relationship with suppliers, residents and others having
business relations with Seller;
(o) Upon Buyer's satisfaction or waiver in writing of the contingency
set forth in Section 10 having a satisfaction date of April 2, 1996 and with
Seller's prior consent, permit Buyer to contact any of Seller's personnel and
make offers of employment to work at each of the Facilities after the Closing,
which personnel shall be allowed to accept or reject such offers without
penalty from Seller;
(p) Upon Buyer's satisfaction or waiver in writing of the contingency
set forth in Section 10 having a satisfaction date of April 2, 1996 and with
Seller's prior consent, permit Buyer to contact any of Seller's residents and
make offers for continued residency after the Closing, which residents shall be
allowed to accept or reject such offers without penalty from Seller;
(q) Permit Buyer and its authorized representatives (including without
limitation, any attorneys or accountants designated by Buyer) to complete a
review and to have access upon prior notice to Seller, at reasonable times that
will allow Buyer to comply with the provisions of Section 10.1, to all
properties, records and documents with respect to the Assets for the purpose of
making such inspections and examinations as Buyer shall deem advisable, and
furnish to Buyer and such representatives financial and other information with
respect to the Assets as Buyer may from time to time request; provided,
however, Buyer shall not have access to documents pertaining to resident
records or operational policies, such as employee handbooks, procedure manuals
and forms, until all of Buyer's contingency set forth in Section 10 having a
satisfaction date of April 2, 1996 is satisfied or waived in writing by Buyer.
Buyer agrees not to indicate to any third party (except for financing purposes
or as required by law) the potential sale by Seller when obtaining any of the
foregoing information and in the event of termination of this Agreement, Buyer
shall return to Seller all such information and documents including copies
thereof made by Buyer;
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(r) Permit Buyer to conduct architectural and engineering inspections
of each of the Facilities, in the presence of Seller or Seller's agent, at
reasonable times that will allow Buyer to comply with the provisions of Section
10.2 and Section 10.3; and
(s) Permit Buyer to validate Seller's Inventory and if Buyer deems
necessary to conduct a physical inventory.
7.2 Pre-Closing Deliveries. Except as may otherwise be provided in
Section 7.1(q), within ten (10) days after the date hereof, Seller shall
deliver to Buyer the following instruments and documents, or true, correct and
complete copies thereof, which shall be satisfactory to Buyer both as to form
and substance:
(a) All Contracts or Leases and other instruments required or
appropriate for the use, occupancy, operation or maintenance of each
of the Facilities or any of the other Assets, including but not
limited to regulations on Community-Based Residential Facilities (as
that term is defined in the applicable sections of the Wisconsin
Statutes ("CBRF")).
(b) All real estate and personal property tax statements or
bills for or relating to each of the Facilities or any of the other
Assets for the applicable current tax year or years, and all tax
assessments or notices thereof upon which such taxes are based.
(c) All warranties, representations and guarantees made by
third parties with respect to any of the Assets that are currently in
possession of Seller.
(d) All pleadings, motions and related documents filed in any
pending litigation relating to or affecting any of the Assets.
(e) All building permits, zoning permits, subdivision plans,
surveys and appraisals prepared within thirty-six (36) months before
the date hereof, for or relating to any of the Facilities that are
currently in possession of Seller.
(f) All correspondence, communications or notices, including
but not limited to those asserting default, violation or breach or
declaring a cancellation or termination, relating to any of the
agreements, instruments, documents or other information identified or
set forth in this Section 7, or to any matters affecting the Assets.
(g) All Contracts, Leases, Permits and Licenses or other
instruments or arrangements relating to the ownership, operation, use,
occupancy or maintenance of the Assets currently being negotiated by
Seller or hereafter entered into by Seller (but only with the prior
written consent of Buyer).
(h) Copies of any instruments, documents or any other
information that
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varies or changes any of the agreements, instruments, documents or
information identified or set forth in this Agreement, or in the
Schedules hereto attached or in any of the Exhibits or other documents
or information to be supplied to Buyer by Seller as elsewhere herein
provided.
(i) A current statement regarding workers' compensation
claims made or threatened against Seller with respect to each of the
Facilities and the current experience rating therefor.
(j) All survey reports as provided for in Section 4.11.
(k) A list containing the names for all regular full-time and
part-time employees of Seller currently employed at each of the
Facilities.
7.3 Seller's Best Efforts. Seller covenants and agrees to use its best
and most diligent efforts to cause all of its covenants and agreements and all
conditions precedent to Seller's obligations to close hereunder to be
performed, satisfied and fulfilled.
7.4 Buyer's Best Efforts. Buyer covenants and agrees to use its best
and most diligent efforts to cause all of its covenants and agreements and all
conditions precedent to Buyer's obligations to close hereunder to be performed,
satisfied and fulfilled.
7.5 Preservation of Records. After the Closing, Buyer shall keep and
preserve all medical records and other records of each of the Facilities
existing as of the Closing and which are required to be kept and preserved (i)
by any applicable federal or state law or regulations or (ii) in connection
with any claim or controversy still pending involving Seller. After the
Closing, upon reasonable written notice by Seller to Buyer, Seller, at its own
cost and expense, shall be entitled, during regular business hours, to have
access to and make copies of all records pertaining to the operation of each of
the Facilities (other than medical records which shall be governed by the
provisions of Section 7.6) prior to the Closing for any lawful corporate
purpose.
7.6 Seller's Access to Resident Records. To the extent permitted by
law, Seller, at its own cost and expense, shall be entitled, after the Closing,
during the regular business hours of each of the Facilities, to have access to
and make copies of the resident records, including the medical records and
medical charts of any resident admitted to each of the Facilities on or before
the Closing. In addition, subject to the prior consent of Buyer, Seller shall
be entitled to copy and remove any such record or chart, but only for purposes
of pending litigation involving a resident to whom such record or chart refers,
as certified in writing prior to removal by an officer of Seller or counsel
retained by Seller in connection with such litigation.
7.7 Casualty. If any part of the Assets are damaged or destroyed in
whole or in part prior to the Closing, and the fair market value of such damage
or destruction is less than Two Hundred Fifty Thousand Dollars ($250,000.00),
Seller shall, at Buyer's option, either (i) reduce the Price by the fair market
value of the Assets damaged or destroyed, such value to be
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determined as of the date immediately prior to such damage or destruction and
Seller may keep the insurance proceeds or (ii) upon the Closing, transfer the
proceeds of the insurance (together with the amount of any deductible paid by
Seller) to Buyer, and Buyer may restore the damaged Assets. If any part of the
Assets are damaged or destroyed in whole or in part prior to Closing and the
fair market value of such damage is greater than Two Hundred Fifty Thousand
Dollars ($250,000.00), Buyer may elect either to (i) require Seller upon the
Closing to transfer the proceeds of the insurance to Buyer (together with the
amount of any deductible paid by Seller), and Buyer may restore the damaged
Assets or (ii) terminate this Agreement and receive a return of the Deposits
previously made by Buyer in accordance with the terms and conditions of the
Escrow Agreement and this Agreement. At the request of Buyer and at Buyer's
sole expense, the amount of insurance against fire and other casualties that,
at the date of this Agreement, Seller carries with respect to any of the Assets
shall be increased by an amount equal to the Price, provided that it is
feasible to obtain such insurance from Seller's current insurance carrier.
7.8 Seller's Insurance. After the Closing, Seller's liability for
professional liability claims relating to or arising from acts or omissions
prior to the Closing shall continue to be covered by Seller's insurance.
7.9 License Reissuance. As set forth in Paragraph 10.9, assurance to
Buyer of the intention of the Wisconsin Department of Health and Social
Services to issue the necessary Licenses and Permits for the operation of the
Facility upon and after Closing hereunder is a condition to Buyer's obligation
to close. Accordingly, Seller shall cooperate with Buyer's efforts to obtain
such assurance by taking all action reasonably required of Seller to assist
Buyer. Upon execution of this Agreement, Seller shall:
(a) Provide Buyer with copies of all Licenses and Permits;
(b) Notify the Wisconsin Department of Health and Social
Services of the pending change of ownership of the Facility (if
required by the Department of Health and Social Services); and
(c) Provide such other notices (if required by the Department
of Health and Social Services) including (i) notices to residents of
the Facility and (ii) notices to human service agencies. Prior to
sending any of the foregoing notices, Seller shall provide copies to
Buyer for review and approval, which approval shall not be
unreasonably withheld.
7.10 Wage Claims. Seller shall provide Buyer at Closing with notices,
if any, of existing claims against Seller as of the Closing Date (whether under
federal or state law, under any employment agreement or otherwise) on account
of or for wages, salary, insurance, paid time-off, holiday pay or bonuses of
any present or former employee.
7.11 Employment Matters. From the date hereof until the Closing Date,
with respect to each of the Facilities, Seller shall operate each of the
Facilities in compliance with all
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federal and state laws respecting employment and employment practices, terms and
conditions of employment and wages and hours, and shall not engage in any unfair
labor practice that may result in (A) an unfair labor practice complaint against
Seller before the National Labor Relations Board; (B) a labor strike, dispute,
slowdown or stoppage against or involving or affecting Seller or (C) a grievance
or any arbitration proceeding against or involving or affecting Seller.
SECTION 8. TERMINATION.
Anything else to the contrary notwithstanding in this Agreement, on or
prior to the specified date or the Closing Date, as the case may be, the
obligations of the parties hereunder may be terminated by written notice from
the terminating party to the non-terminating party, which written notice shall
contain a brief statement regarding the reason(s) for termination, as follows:
(a) By Buyer (i) in the event that the transactions
contemplated hereunder have been prohibited or enjoined by any reason
of any final judgment, decree or order entered or issued by a court of
competent jurisdiction in litigation or proceedings involving either
Buyer or Seller; (ii) in the event the conditions precedent to Buyer's
obligation to close are not satisfied and performed in full in
accordance with the terms of this Agreement; (iii) in the event Seller
breaches or violates any provision of this Agreement in any respect or
fails to perform any covenant or agreement to be performed by Seller
under the terms of this Agreement in any respect and if such failure
continues for ten (10) days after written notice is given by Buyer to
Seller regarding the breach or violation or the demand for the
performance of such covenant or agreement and such breach, violation
or failure is not waived in writing by Buyer after the applicable cure
period and prior to Closing. If the cure period extends beyond the
Closing Date, the Closing Date shall automatically be extended until
the first business day after expiration of the cure period.
(b) By Seller (i) in the event that the transactions
contemplated hereunder have been prohibited or enjoined by reason of
any final judgment, decree or order entered or issued by a court of
competent jurisdiction in litigation or proceedings involving either
Buyer or Seller; (ii) in the event the conditions precedent to
Seller's obligation to close are not satisfied and performed in full
in accordance with the terms of this Agreement; or (iii) in the event
Buyer breaches or violates any provision of this Agreement in any
respect or fails to perform any covenant or agreement to be performed
by Buyer under the terms of this Agreement in any respect and if such
failure continues for ten (10) days after written notice is given by
Seller to Buyer regarding the breach or violation or the demand for
the performance of such covenant or agreement and such breach,
violation or failure is not waived in writing by Buyer after the
applicable cure period and prior to Closing. If the cure period
extends beyond the Closing Date, the Closing Date shall automatically
be extended until the first business day after expiration of the cure
period.
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(c) By Buyer or Seller if the Closing hereunder shall not
have taken place by the Closing Date or such later date as shall be
agreed upon by an amendment to this Agreement, and any such
termination shall not affect the rights of the parties hereunder.
(d) By Seller and Buyer by mutual agreement.
In the event of termination by Buyer or Seller, as the case may be, under
Section 8(a)(i), 8(a)(iii) or 8(b)(i), Buyer shall be entitled to a return of
the Deposits. Disbursement of the Deposits to Buyer or Seller, as the case may
be, shall be made by Escrow Agent pursuant to the terms and conditions of the
Escrow Agreement and this Agreement.
SECTION 9. AMENDMENT OF AGREEMENT
At any time on or prior to the Closing Date, Buyer or Seller, may, by
written notice to the other (and without a written amendment signed by both
parties):
(a) Extend the time for performance by the other party of any
of the obligations or other actions of the parties hereto:
(b) Waive any inaccuracies in the representations and
warranties of the other party contained in this Agreement or in any
document delivered pursuant hereto; and
(c) Waive compliance by the other party with any of the
covenants or conditions contained in this Agreement (including,
without limitation, a condition precedent to its obligations to
close).
SECTION 10. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE.
The obligation of Buyer to consummate the transactions contemplated by
this Agreement is subject to and contingent upon the satisfaction on or before
the specified date or the Closing Date, as the case may be, of the following
express conditions precedent:
10.1 Initial Review. On or before February 18, 1996, Buyer shall have
completed its initial review of Seller's operations as contemplated in
Paragraphs 6 and 7 of the Letter of Intent, the results of which shall be
satisfactory to Buyer in its sole and absolute discretion.
10.2 Environmental Report. On or before March 19, 1996, at Buyer's
option and expense, Buyer shall have received a written report from a qualified
geotechnical or engineering firm, in a form and substance, satisfactory to
Buyer, concerning the presence, handling, treatment and disposal of Hazardous
Substances on, in or under any of the Facilities and disclosing (i) the results
of a review of prior uses of each of the Facilities disclosed by local public
records, including the chain of title, (ii) contacts with local officials to
determine whether any records exist with respect to the disposal of Hazardous
Substances at any of the Facilities, (iii) the necessity and nature of any soil
samples and groundwater samples that need
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to be taken consistent with good engineering practice and (iv) the necessity
and nature of any remedial action that need to be taken. The results of the
environmental inspection shall be satisfactory to Buyer in its sole and
absolute discretion.
10.3 Physical Inspection. On or before March 19, 1996, Buyer shall
have inspected the physical condition of each of the Facilities including the
improvements and the HVAC, electrical, plumbing and other systems, and, at
Buyer's option and expense, shall receive the written report in form and
substance satisfactory to Buyer from a qualified engineering firm approved by
Buyer or any engineer employed by Buyer to the effect that the improvements at
each of the Facilities have been constructed in compliance with, and currently
are in compliance with, all governmental requirements, including without
limitation the Americans With Disabilities Act, and with all restrictions of
record applicable thereto which materially affect the Buyer's intended use of
each of the Facilities. The results of the physical inspections shall be
satisfactory to Buyer in its sole and absolute discretion.
10.4 Financing Commitment. On or before April 2, 1996, Buyer shall
have received a written binding commitment from a real estate investment trust
or other financing source(s) to provide the necessary financing for Buyer's
acquisition of the Assets under this Agreement upon terms and conditions
satisfactory to Buyer in its sole and absolute discretion. .
10.5 Authorization. On or before March 19, 1996, Buyer shall have
received authorization by all necessary corporate action on the part of Buyer,
including but not limited to approval by its board of directors, of the
execution and delivery of this Agreement by Buyer, the performance by Buyer of
its obligations hereunder and the sale and purchase of the Assets.
10.6 Performance. Seller shall have performed each and every covenant
and obligation required to be performed by it on or prior to the Closing.
10.7 Representations and Warranties. Each and all of the
representations and warranties of Seller contained in this Agreement shall be
true and correct on and as of the Closing Date, as though given as of the
Closing Date, and Seller shall have delivered to Buyer officers' certificates
to that effect.
10.8 Proceedings. Buyer shall have reviewed and approved all
proceedings to be taken by Seller in connection with the transactions
contemplated hereunder and all documents and certificates incident thereto,
including Seller's articles of incorporation and bylaws, a good standing
certificate for Seller issued by the Secretary of the State of Wisconsin, dated
no more than thirty (30) days prior to the Closing, resolutions adopted by
Seller and its shareholders (if necessary), certified by the corporate
secretary of Seller, approving this Agreement and the transactions contemplated
hereby and such other documents and certificates as Buyer shall reasonably
request.
10.9 Governmental Concurrences. On or before March 31, 1996 (which
date shall automatically be extended until April 10, 1996 if Buyer has not
received the following), Buyer
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shall have received and approved evidence satisfactory to Buyer in its sole and
absolute discretion that (i) Seller has operated each of the Facilities in
accordance with all Department of Health and Social Services' laws, regulations
and orders, except for minor deficiencies that have been corrected or that have
been noted on Schedule 4.11, (ii) none of the Facilities are subject to, or to
the best of Seller's knowledge threatened with, any hold on admissions or other
sanction and there are no outstanding, or threatened, notices of deficiency
resulting from any inspection of any of the Facilities that have not been
provided for by Seller and (iii) Buyer shall be able to obtain all licenses,
permits, accreditations, authorizations and certifications required for the
operation of the Facilities by Buyer for its intended use thereof from all
applicable governmental authorities and other third parties upon and after
Closing.
10.10 Contracts and Leases. On or before March 31, 1996, Buyer shall
have received evidence satisfactory to Buyer that all of the Contracts and
Leases to be transferred hereunder will either be (i) validly assigned or (ii)
terminated and renegotiated on terms and conditions reasonably acceptable to
Buyer.
10.11 Notices. On or before March 31, 1996, Buyer shall have received
evidence satisfactory to Buyer that Seller has given all notices (if any)
required under Paragraph 7.9 in compliance with all Department of Health and
Social Services' laws, regulations and orders.
10.12 Litigation. No action or proceeding shall have been instituted
and no order, decree or judgment of any court, agency, commission or authority
shall be in affect questioning the validity of this Agreement or seeking to
restrain the consummation thereof which would in Buyer's good faith opinion
render it impossible or inadvisable to consummate the transactions provided for
in this Agreement.
10.13 Opinion of Counsel. Buyer shall have received an opinion of
counsel to Seller, reasonably acceptable to Buyer's Counsel, substantially in
the form as set forth in Section 3.4(h).
10.14 Schedules and Other Instruments. On or before March 31, 1996,
Buyer shall have reviewed and approved each Schedule to this Agreement to be
provided by Seller. Each Schedule to this Agreement shall be considered a part
hereof as if set forth herein in full. Any Schedules provided for herein that
are revised after March 31, 1996 and that indicate an additional obligation or
liability of Buyer arising on or after the Closing shall be subject to the
approval of Buyer.
If any of the foregoing express conditions precedent are not satisfied on or
before the specified date or the Closing Date, as the case may be, Buyer may,
in the exercise of its sole and absolute discretion, terminate this Agreement
without any liability to Seller whatsoever and receive a return of the Deposits
previously made by Buyer in accordance with the terms and conditions of the
Escrow Agreement and this Agreement. In the event Buyer fails to provide
written notice of termination pursuant to Section 8 or written notice of waiver
with respect to the foregoing conditions precedent, said conditions precedent
shall be deemed satisfied.
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SECTION 11. CONDITIONS PRECEDENT TO OBLIGATION OF SELLER TO CLOSE.
The obligation of Seller to consummate the transaction contemplated by
this Agreement is subject to and contingent upon the satisfaction on or before
the specified date or the Closing Date, as the case may be, of the following
express conditions precedent:
11.1 Contracts. On or before March 19, 1996, Seller shall have
received evidence satisfactory to Seller that, on and as of the Closing Date,
Seller's landlords under the Leases will either (i) release Seller from all
liability as tenant thereunder and consent to the assignment of said Leases to
Buyer as tenant or (ii) terminate the Leases with Seller and enter into new
leases with Buyer for each of the Facilities. If this condition precedent is
not satisfied or waived in writing by Seller, Seller may, in the exercise of
its sole and absolute discretion, terminate this Agreement and Buyer shall
receive a return of the Deposits previously made by Buyer in accordance with
the terms and conditions of the Escrow Agreement and this Agreement and Seller
shall have no other liability to Buyer.
11.2 Performance. Buyer shall have performed each and every covenant
and obligation required to be performed by it on or prior to the Closing. If
this condition precedent is not satisfied or waived in writing by Seller,
Seller may, in the exercise of its sole and absolute discretion, terminate this
Agreement and the Deposits previously made by Buyer shall be released in favor
of Seller in accordance with the terms and conditions of the Escrow Agreement
and this Agreement without any other liability to Buyer.
11.3 Representations and Warranties. Each and all of the
representations and warranties of Buyer contained in this Agreement shall be
true and correct on and as of the Closing Date, as though given as of the
Closing Date. If this condition precedent is not satisfied or waived in writing
by Seller, Seller may, in the exercise of its sole and absolute discretion,
terminate this Agreement and the Deposits previously made by Buyer shall be
released in favor of Seller in accordance with the terms and conditions of the
Escrow Agreement and this Agreement without any other liability to Buyer.
11.4 Opinion of Counsel. Seller shall have received an opinion of
counsel to Buyer, reasonably acceptable to Seller's counsel, substantially in
the form as set forth in Paragraph 3.4(l). If this condition precedent is not
satisfied or waived in writing by Seller, Seller may, in the exercise of its
sole and absolute discretion, terminate this Agreement and the Deposits
previously made by Buyer shall be released in favor of Seller in accordance
with the terms and conditions of the Escrow Agreement and this Agreement
without any other liability to Buyer. In the event Seller fails to provide
written notice of termination pursuant to Section 8 or written notice of waiver
with respect to the foregoing conditions precedent, said conditions precedent
shall be deemed satisfied.
SECTION 12. INDEMNIFICATION.
12.1 Indemnification by Seller.
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Subject to the limitations set forth in Paragraph 12.3, from and after
the Closing Date, Seller agrees to and does hereby indemnify and hold Buyer,
its successors and assigns, harmless at all times from and against and in
respect of any of the following, to the extent that they are in existence at
the Closing Date or arise after the Closing Date based upon facts,
circumstances or conditions existing prior to the Closing or on the Closing
Date (regardless of the date of discovery):
(a) Any and all damages, claims, deficiencies, liabilities,
losses or costs resulting from any Excluded Liability, or from any
breach of any representation or warranty of Seller or from any breach
of any covenant or agreement of Seller under this Agreement, or from
the ownership, lease, management, operations and interests of Seller
in or to the Assets prior to Closing, and from any act or omission of
Seller, its agents or employees prior to Closing.
(b) All demands, assessments, judgments, costs and legal or
other expenses (including attorneys' fees, penalties and interest)
incurred by Buyer arising from or in connection with any action, suit,
proceeding or claim incident to any of the matters set forth in (a)
above.
(c) Subject to the provisions of Paragraph 12.4 below, Buyer
shall be reimbursed on demand for loss, damage, cost or expense
suffered by it in connection with any action, suit, proceeding or
claim incident to any of the matters set forth in (a) or (b) above.
12.2 Indemnification by Buyer.
Subject to the limitations set forth in Paragraph 12.3, from and after
the Closing Date, Buyer agrees to and does hereby indemnify and hold Seller,
its successors and assigns, harmless at all time from and against and in
respect of any of the following, to the extent that they are in existence at
the Closing Date or arise after the Closing Date based upon facts,
circumstances or conditions arising prior to the Closing or on the Closing Date
the Closing Date (regardless of the date of discovery):
(a) Any and all damages, claims, deficiencies, liabilities,
losses or costs resulting from any Assumed Liability, or from any
breach of any representation or warranty of Buyer or agreement on the
part of Buyer under this Agreement, or from the ownership, lease,
management, operations and interests of Buyer in or to the Assets
after the Closing, and from any act or omission of Buyer, its agents
and employees, after the Closing.
(b) All demands, assessments, judgments, costs and legal or
other expenses (including attorneys' fees, penalties and interest)
incurred by Seller arising from or in connection with any action,
suit, proceeding or claim incident to any of the matters set forth in
(a) above.
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(c) Subject to the provisions of Paragraph 12.4 below, Seller
shall be reimbursed on demand for loss, damage, cost or expense
suffered by it in connection with any action, suit, proceeding or
claim incident to any of the matters set forth in (a) or (b) above.
12.3 Limitation of Liability. Notwithstanding the foregoing, Seller's
and Buyer's indemnification obligations set forth in Paragraphs 12.1
and 12.2, respectively, shall be subject to the following limitations:
(a) Except as set forth in Subparagraph (c) below,
no indemnification shall be made under Paragraph 12.1 or
Paragraph 12.2 until the aggregate amount of the indemnified
parties' claims thereunder exceeds the amount of Ten Thousand
Dollars ($10,000.00), but if the aggregate amount of the
claims thereunder exceeds the amount of Ten Thousand Dollars
($10,000.00), indemnification shall be made by the
indemnifying party thereunder to the full extent of the
damages.
(b) Except as set forth in Subparagraph (c) below,
the indemnifying party shall be obligated to indemnify the
indemnified party by virtue of Paragraph 12.1 or Paragraph
12.2 only for those claims as to which the indemnifying party
has received written notice thereof from the indemnified
party within two (2) years after the Closing Date; provided,
however, that with respect to any claim relating to an
Assumed Liability or Excluded Liability, the indemnifying
party's liability under Paragraph 12.1 or Paragraph 12.2, as
the case may be, shall not be limited as to time or amount.
(c) The indemnifying party's liability under
Paragraph 12.1 and 12.2, as the case may be, shall not be
limited as to time or amount with respect to any claim
relating to an Assumed Liability or an Excluded Liability.
(d) The limitations set forth herein shall not apply
to claims arising out of (i) fraud or (ii) the breach of any
representation or warranty contained herein or pursuant
hereto if such representation or warranty was made with
actual knowledge that it contained an untrue statement of a
fact or omitted to state a fact necessary to make the
statement of fact contained therein not misleading.
12.4. Third Party Claims. The indemnified party shall have the right
to conduct and control, through counsel of its choosing, the defense
of any third party claim, action or suit, and the indemnified party
may compromise or settle the same; provided, that the indemnified
party shall give the indemnifying party advance notice of any proposed
compromise or settlement. The indemnified party shall permit the
indemnifying party to participate in the defense of any such action or
suit through counsel chosen by the indemnifying party, provided that
the fees and expenses of such counsel shall be borne by the
indemnifying party to undertake, conduct and control the conduct and
settlement of such action or suit, (iv) the indemnifying party shall
not thereby permit to exist any encumbrance upon any asset of the
indemnified party; (v) the indemnifying party shall
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not consent to any settlement that does not include as an
unconditional term thereof the giving of a complete release form
liability with respect to such action or suit to the indemnified
party; (vi) the indemnifying party shall permit the indemnified party
to participate in such conduct or settlement through counsel chosen by
the indemnified party and (vii) the indemnifying party shall agree
promptly to reimburse the indemnified party for the full amount of any
damages including fees and expenses of counsel for the indemnified
party incurred after giving the foregoing notice to the indemnifying
party and prior to the assumption of the conduct and control of such
action or suit by the indemnifying party.
12.5 Covenant-Not-To Compete and Not-To Solicit.
(a) For a period of five (5) years after the Closing, neither
Seller, nor any entity controlled by Seller, directly or indirectly,
shall own, operate, manage, provide consulting services to, finance or
invest in any CBRF or other related business or operation within a
radius of ten (10) miles from any of the Facilities.
(b) For a period of two (2) years after the Closing, neither
Seller, nor any entity controlled by Seller, directly or indirectly,
shall, (i) on a full-time or part-time basis, employ or contract with
employee retained by Buyer on and as of the Closing Date who provides,
or who has provided, services to any of the Facilities or (ii)
otherwise induce any employee or contractor to terminate his or her
relationship with Buyer.
(c) Other than the Facilities' employees employed by Buyer on
and as of the Closing Date, for a period of two (2) years after the
Closing, neither Buyer, nor any entity controlled by Buyer, directly
or indirectly, shall, (i) on a full-time or part-time basis, employ or
contract with any of Seller's employees or (ii) otherwise induce any
employee or contractor to terminate his or her relationship with
Seller, unless authorized in advance by Seller (specifically by
Xxxxxxx X. Xxxxxxx, President) in the exercise of its sole and
absolute discretion.
The restrictive covenants set forth in this Paragraph 12.5 shall be
specifically enforceable by a preliminary and/or permanent injunction issued by
a court sitting in equity, in addition to all other remedies that may be
available for its violation; it being acknowledged, understood and agreed that
the violation of such covenants will cause immediate and irreparable harm and
injury to Buyer and/or Seller, as the case may be.
SECTION 13. DEFAULT
13.1 Seller's Default. If Seller defaults under any of the terms or
provisions of this Agreement or in the observance or performance of any of
Seller's obligations hereunder after any applicable cure period, Buyer shall be
entitled to pursue and enforce any and all of Buyer's rights and remedies,
whether at law, in equity or otherwise, including without limitation for a
decree of specific performance or appropriate injunctive relief, as Buyer in
its
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sole discretion may determine.
13.2 Buyer's Default. If Buyer defaults under any of the terms or
provisions of this Agreement or in the observance or performance of any of
Buyer's obligations hereunder after any applicable cure period in accordance
with the terms and conditions of this Agreement (other than the conditions
precedent to Buyer's obligation to close set forth in Section 10), Seller shall
be entitled to demand, receive and retain the Deposits previously made by Buyer
as liquidated damages in accordance with the terms of the Escrow Agreement and
this Agreement, and shall have no other remedy, right or recourse against Buyer
for such default.
SECTION 14. ASSIGNMENT
Neither this Agreement nor any of the rights, interests or obligations
herein shall be transferred or assigned by either party without the prior
written consent of the other party (not to be unreasonably withheld). The
preceding sentence shall not apply to or limit Buyer's right to assign this
Agreement to any entity which is (i) controlled by Buyer or (ii) a real estate
investment trust which will provide the financing for Buyer to acquire and take
title to the Assets hereunder. Nothing expressed or referred to in this
Agreement is intended or shall be construed to give any person other than the
parties to this Agreement or their respective successors or permitted assigns
any legal or equitable right, benefit, remedy or claim under or in respect of
this Agreement or any provision contained herein.
SECTION 15. NOTICE.
All notices given under or with respect to the provisions of this
Agreement shall be sent either by certified or registered mail, with return
receipt requested and postage prepaid, or by independent courier service, in
either case properly addressed to the intended party as follows and shall be
deemed to have been given as of the date received:
If to Seller: Senior Care of Wisconsin, Inc.
000 Xxxxxxx Xxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx,
Chief Financial Officer
Phone: (000) 000-0000
Fax: (000) 000-0000
With a copy to: Xxxxx Xxxxxxxxx
Manchester Place
2 East Mifflin Street
P.O. Box 1767
Attn: Xxxxx X. Xxxxx, Esq.
Xxxxxxx, XX 00000-0000
Phone: (000) 000-0000
Fax: (000) 000-0000
If to Buyer: Balanced Care Corporation
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0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
Attn: Xxxx Xxxxxxxxx, President
and CEO
Phone: (000) 000-0000
Fax: (000) 000-0000
With a copy to:
Balanced Care Corporation
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxxx, Esq.
Phone: (000) 000-0000
Fax: (000) 000-0000
SECTION 16. COOPERATION.
Each of the parties hereto shall cooperate fully with the other party,
both before and after the Closing, in performing their respective obligations
and consummating the sale and purchase of the Assets, including but not limited
to supplying any additional information or documents reasonably requested by
the other party, and the execution, acknowledgment, delivery, filing and
recording of statements, certificates, memoranda, instruments and other
documents as may be necessary or appropriate to evidence or perfect Buyer's
purchase and ownership of the Assets and carry out the provisions of this
Agreement.
SECTION 17. PAYMENT OF EXPENSES.
Legal, accountings and other expenses incident to this Agreement
incurred by Seller shall be paid by Seller; legal, accounting and other
expenses incurred by Buyer shall be paid by Buyer.
SECTION 18. PUBLIC ANNOUNCEMENTS.
Except as may otherwise be provided herein, Seller and Buyer mutually
agree that no party hereto shall make any release, publish or otherwise make
available to the public in any manner whatsoever any announcement regarding the
transactions herein contemplated without the prior written consent of Seller
and Buyer, except for information reasonably necessary to be directed to
governmental agencies to fully and lawfully effect the transactions herein
contemplated.
SECTION 19. CONSTRUCTION.
This Agreement constitutes and is the complete and final integration
embodying the entire agreement between the parties hereto, and no promise,
representation, agreement, condition or term not herein expressly set forth
shall be deemed or permitted to vary, modify
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or otherwise change any of the provisions hereof unless made in writing after
the date hereof and signed by both of the parties hereto. Nothing in this
Agreement shall be construed to be or create an employment agreement between
Buyer and any employee of Buyer after this Closing. The terms and provisions of
the Letter of Intent between Seller and Buyer are incorporated herein by
reference. The waiver by either party of breach or violation of any provision
of this Agreement shall not operate as, or be construed to be, a waiver of any
subsequent breach of the same or other provision hereof. The captions of the
several paragraphs herein contained are inserted solely for the purpose of
convenience, and shall not limit, influence or affect the meaning or
construction of any of the provisions hereof. Where herein used, the words
"hereof", "hereunder", "hereto", and other similar compounds of the word "here"
shall refer to this entire Agreement, unless the context otherwise clearly
requires, and the singular shall include the plural and vice versa. This
Agreement and each provision hereof shall be construed under and enforced in
accordance with the laws of the Commonwealth of Pennsylvania, and shall be
binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors and assigns.
[THE NEXT PAGE IS THE SIGNATURE PAGE]
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IN WITNESS WHEREOF, Seller and Buyer, each intending to be legally
bound hereby, have duly executed this Agreement on this day, month and year
first above written.
SELLER:
WITNESS/ATTEST: SENIOR CARE OF WISCONSIN, INC.
[Illegible] By: /s/ Xxxxxxx X. Xxxxxxx
------------------------ ----------------------------------
Xxxxxxx X. Xxxxxxx, President
BUYER:
WITNESS/ATTEST: BALANCED CARE CORPORATION
/s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxx, Xx.
------------------------ ----------------------------------
Xxxxxx X. Xxxxxx, Xx. Vice President
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